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REVITALIZING RURAL AMERICA 

FIELD HEARING 

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

NOVEMBER 23, 2009 

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry 

( 

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

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

BLANCHE L. LINCOLN, Arkansas, Chairman 

PATRICK J. LEAHY, Vermont 

TOM HARKIN, Iowa 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

DEBBIE STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

SHERROD BROWN, Ohio 

ROBERT CASEY, Jr., Pennsylvania 

AMY KLOBUCHAR, Minnesota 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

SAXBY CHAMBLISS, Georgia 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

MIKE JOHANNS, Nebraska 

CHARLES GRASSLEY, Iowa 

JOHN THUNE, South Dakota 

JOHN CORNYN, Texas 

ROBERT HOLIFIELD, Majority Staff Director 

JESSICA L. WILLIAMS, Chief Clerk 

MARTHA SCOTT POINDEXTER, Minority Staff Director 

ANNE C. HAZLETT, Minority Chief Counsel 

(II) 

(III) 

C O N T E N T S 

Page 

FIELD HEARING(S): 

Revitalizing Rural America ..................................................................................... 1 

Monday, November 23, 2009 

STATEMENTS PRESENTED BY SENATORS 

Lincoln, Hon. Blanche L., U.S. Senator from the State of Arkansas, Chairman, Committee on Agriculture, Nutrition, and Forestry ................................ 1 

Panel I 

Bedell, Allen, Chairman, Arkansas Forestry Commission, Hot Springs, Arkansas .......................................................................................................................... 9

Gillam, Jeremy, Specialty Crop Producer, Gillam Farms, Judsonia, Arkansas . 11 

Jones, Michael, President, Merchants and Farmers Bank, Dumas, Arkansas .. 13 

Jones, Tom, Livestock Producer, and Member, Arkansas Farm Bureau Board 

of Directors, Pottsville, Arkansas ....................................................................... 7 

Veach, Randy, President, Arkansas Farm Bureau, Manila, Arkansas ............... 5 

Panel II 

Gardner, Teddy L., President/Executive Director, South Arkansas Community 

Development, Arkadelphia, Arkansas ................................................................ 28 

Mccullough, Lawrence, State Director, Rural Development, U.S. Department 

of Agriculture, Little Rock, Arkansas ................................................................. 21 

Sternberg, Dennis, Executive Director, Arkansas Rural Water Association, 

Lonoke, Arkansas ................................................................................................. 25 

Walls, Sam, Chief Executive Officer, Arkansas Capital Corporation, Little 

Rock, Arkansas ..................................................................................................... 23 

Panel III 

Cole, Robert L., Private Consultant, East Arkansas Enterprise Community, 

and Program Coordinator, University of Arkansas At Pine Bluff, National 

Water Management Center ................................................................................. 40 

King, Calvin R., President, Arkansas Land and Farm Development Corporation, Brinkley, Arkansas ...................................................................................... 43 

Pagan, Annett, Director, U.S. Programs, Winrock International, Little Rock, 

Arkansas ............................................................................................................... 39 

Squires, John, Chief Executive Officer, Community Resource Group, Fayetteville, Arkansas ...................................................................................................... 47 

APPENDIX 

PREPARED STATEMENTS: 

Bedell, Allen ...................................................................................................... 58 

Cole, Robert L. .................................................................................................. 60 

Gardner, Teddy L. ............................................................................................ 70 

Gillam, Jeremy ................................................................................................. 74 

Jones, Michael .................................................................................................. 76 

Jones, Tom ........................................................................................................ 78 

Page

IV 

PREPARED STATEMENTS—Continued 

King, Calvin R. ................................................................................................. 80 

Mccullough, Lawrence ...................................................................................... 85 

Pagan, G. Annett .............................................................................................. 93 

Squires, John .................................................................................................... 97 

Sternberg, Dennis ............................................................................................. 105 

Veach, Randy .................................................................................................... 117 

Walls, C. Sam ................................................................................................... 120 

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Housing Assistance Council, prepared statement ......................................... 128 

Delta Studies Center, Arkansas State University-Jonesboro, prepared 

statement ....................................................................................................... 129 

(1) 

REVITALIZING RURAL AMERICA 

Monday, November 23, 2009 

UNITED STATES SENATE, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, Little Rock, Arkansas 

The Committee met, pursuant to notice, at 1:00 p.m., in the William J. Clinton Presidential Library, 1200 Clinton Avenue, Little 

Rock, Arkansas, Hon. Blanche L. Lincoln, Chairman of the Committee, presiding. 

Present: Senator Lincoln. 

Also Present: Skip Rutherford. 

Mr. RUTHERFORD. Good afternoon, ladies and gentlemen. My 

name is Skip Rutherford. I am Dean of the University of Arkansas 

Clinton School of Public Service, and we are honored to host this 

hearing today at the Clinton Library. So on behalf of the students, 

faculty, and staff at the world’s only college to provide a master’s 

in public service, we hope you enjoy this public service. 

It is my pleasure to introduce someone who needs no introduction to the people in this room, but to say that this is a historic 

occasion because this is the first field hearing being held for the 

new Chairman of the Senate Agriculture Committee, her first field 

hearing. And in the 184-year history of the Senate Ag Committee, 

Senator Blanche Lincoln becomes not only the first Arkansan to 

chair that Committee, but the first woman to chair that Committee. So we are honored that she has chosen here for this hearing. 

In 1998, she became the youngest woman ever elected to the 

United States Senator, and she has served our State with honor 

and distinction, not only the Agriculture Committee but on the Finance Committee and other positions in 

Washington, DC A former Congresswoman from the 1st Congressional District, the mother of twin sons, and the wife of a physician, would you please welcome the distinguished Senator from the 

State of Arkansas, the Honorable Blanche Lincoln. 

[Applause.] 

STATEMENT OF HON. BLANCHE L. LINCOLN, U.S. SENATOR 

FROM THE STATE OF ARKANSAS, CHAIRMAN, COMMITTEE 

ON AGRICULTURE, NUTRITION, AND FORESTRY 

Chairman LINCOLN. Thank you. Well, thank you all for being 

here today. Now, there are plenty of seats up front in case anybody 

cannot see or hear. So I do not want this to be the church service 

that everybody say in the back. But we want to say welcome to you 

all and good afternoon, 

2 

and welcome from the U.S. Senate Agriculture, Nutrition, and 

Forestry Committee and the field hearing that we are having here 

today. I am very excited that this is our first official field hearing 

that I am holding as Chairman of the Senate Agriculture Committee. It is extremely meaningful to me not only because it is here 

in my home State, but it is also on an issue that I am passionate 

about. 

As we look towards the future of what we have to do in this 

great country, it is to put our economy back on track, it is to create 

jobs. And as we move forward in this hearing, I think its timing 

is important because with the new year I think you will see an 

added effort. Many of us have been clamoring in Washington to 

focus on jobs and to focus on the economy, and this hearing will 

provide us great information, great resources, both questions as 

well as ideas of how we can really get the ball rolling in terms of 

job creation in wonderful areas of our Nation in rural America. So 

I am very pleased. 

I also want to say a very special thanks to Skip for those kind 

remarks, but I also want to thank Skip for his leadership here and 

the Clinton School of Public Service for hosting our hearing. We are 

so proud, very proud in Arkansas to have the only graduate school 

in the Nation offering a master’s in public service right here in Little Rock. And I want to thank the members of the Arkansas State 

Legislature. I saw a few of them when I came in. I know there are 

some that are here. I am very grateful that they are here with us 

today, and I continue to look forward to working with them. I know 

that they hear as much as I do, if not more, with boots on the 

ground as they are, certainly the dilemma in rural America, and 

particularly with production agriculture right now. So I am grateful to them for their friendship and the hard work that they do. 

I also want to thank—there are some mayors here and county 

judges who are in attendance. I know they also hear and see an 

awful lot firsthand, and I am grateful for the working relationship 

we have with them and want to continue that working relationship 

to benefit all of our constituents. 

And, finally, I want to thank everyone else who is here. This is 

an issue that we all must tackle. Building our economy in this 

country is critical and making sure that the rest of our Nation understands the important role that rural America has to play in 

that, the good ideas, the challenges that we face, but without a 

doubt, the stamina that we have and the perseverance that we 

have to make sure that we are a part of the solution and not a part 

of the problem. And I hear and see that enthusiasm every time I 

visit rural America, whether it is here or in other parts of our Nation. 

Today, we are very fortunate to have three panels of distinguished witnesses to discuss Arkansas’ rural economy, and I really 

look forward to hearing their testimony, as I know you do as well. 

For those of you in the audience who will not be testifying, we hope 

that you will take the opportunity to fill out the cards that were 

given to you as you entered today to let us know your questions 

and concerns, feedback on all of the issues discussed here today. 

There are also several members of my staff here, so I encourage 

you to visit with them about how you can share your thoughts with 

3 

the Committee. This is an official Committee event, and so it will 

go on the record, and these will be great ideas and certainly great 

concerns that we take back to my colleagues in Washington on the 

Senate Agriculture Committee. 

I am honored to be the first Arkansan to serve as the Chairman 

of the Senate Agriculture Committee and excited about the opportunities this presents for Arkansas to elevate our voice in Washington on issues critical to the economic well-being of our State and 

all of rural America. This first official field hearing provides an opportunity for Arkansans to begin a new dialogue with the Senate 

Agriculture Committee that will help shape our agenda moving forward in the Committee. 

Creating jobs, putting our economy back on the right track, is my 

number one priority. With over 100,000 Arkansans now unemployed, families across our State are struggling to make ends meet. 

Together with your help and input, we will use this chairmanship 

to put people back to work and reverse the devastating effects our 

ailing economy has had on Arkansas and other rural areas of our 

Nation. 

When our Nation faces difficult economic times, rural Americans 

are often the very first to feel the impact and the last to recover. 

With 48 percent of our State’s population living in rural areas, it 

is absolutely critical that this Committee focus on providing our 

rural communities with the tools they need to strengthen and grow 

their economies. 

An issue of particular importance to our State’s economy right 

now is the hardships many of our agricultural producers are seeing 

as a result of recent excessive rainfall and flooding. According to 

the National Oceanic and Atmospheric Administration, 2009 has 

been our wettest year in 115 years of recordkeeping. Last week, the 

University of Arkansas’s Division of Agriculture released a report 

on the State’s crop losses due to the flooding and the poor weather 

conditions. The report estimated the crop loss for the 2009 harvest 

has risen to more than $300 million, and this does not even factor 

in the lost wages of agriculture-related jobs of more than $80 million. 

And that is why I have joined forces with Senator Thad Cochran, 

the highest ranking Republican on the Senate Appropriations Committee—and, remember, that is the Committee that controls the 

money—to introduce legislation to provide additional direct payments to producers in counties where there is a USDA-declared 

disaster. To date, over half of Arkansas’ counties have received a 

disaster declaration. Obviously, there is never a good time for us 

to suffer these kinds of losses, especially in an industry that is the 

economic engine of rural Arkansas. 

However, given the current recession, it is difficult to imagine 

this flooding occurring at a worse time. In our Nation’s history, the 

economics that we face right now are treacherous. As Chairman of 

this Committee, I will continue to be a strong advocate for supporting the thousands of jobs and hundreds of rural small businesses in Arkansas that production agriculture provides. 

In addition, I know that improving our rural infrastructure is 

also critical for our farms and rural communities to thrive. Fostering the development of key infrastructure provides new opportuVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
4 

nities to support our rural economy and spur new job creation. Providing accessible, affordable broadband to rural communities is one 

of my top priorities. Broadband Internet service is quickly becoming a requirement for many businesses when they consider where 

to locate, and rural Arkansas will not be able to compete with the 

rest of the country without it. 

Much like broadband, many rural Americans lack access to safe 

and reliable sources of water. There are rural communities right 

here in Arkansas that are struggling with this issue, and helping 

them to provide clean water to their citizens will continue to be a 

priority for me. I have worked on it since I was first elected in 1992 

and will continue to make this a priority. 

Through the 2008 farm bill and economic stimulus bill, there are 

USDA programs to help. In fact, just last week, I worked with 

USDA to secure over $4 million for Arkansas to put people to work 

and help provide clean water resources. However, there is clearly 

more to be done, as we will hear from the witnesses today. But I 

have to say that when I was first elected in 1992, it was unbelievable to witness the installation of a new water system out in western Arkansas. And I was amazed. A woman came up to me, and 

she looked at me and she, just with tears in her eyes, was so grateful to finally have good, clean water in her home. And she looked 

at me and she said, ‘‘Yes, ma’am, I am so proud.’’ She said, ‘‘And 

I got to tell you, I had colored sheets long before colored sheets was 

popular.’’ She said, ‘‘I am so glad to be able to have this clean 

water.’’ 

Some of us take that for granted. We should never, and we 

should be doing everything we can to ensure that all Americans 

enjoy safe, clean water. 

Affordable housing is another important issue for Arkansans. In 

2008, an estimated 48 percent of Arkansas renters could not afford 

two-bedroom housing. In some regions of the State, that number is 

over 50 percent. Homeownership is essential to building economic 

wealth in a community as well as safety, and we must do more to 

help Arkansas families achieve the dream of owning their own 

home. 

Finally, we are blessed in Arkansas to have a number of community development organizations in our rural communities, encouraging entrepreneurship and helping Arkansans find ways to improve their quality of life. I look forward to hearing about successful community and economic development initiatives and discussing how we can replicate these successes over our State and 

Nation. 

We have an impressive set of witnesses here today, and I look 

forward to their testimony on these critical issues. This will be a 

productive hearing for the Committee, and it will help us ensure 

that the economic needs and the strengths of various sectors of Arkansas’ economy as well as all of America’s rural economy will be 

guiding me and the other members of our Committee as we move 

forward in constructing the Committee’s agenda. While there are 

many pressing issues facing our Nation and our State, none are 

more important to me than fixing our economy and helping Arkansans get a good job. 

5 

So now I would like to move to our panelists, and I would like 

to introduce our first panel of witnesses who will come and join us 

here at the witness table. 

Our first witness today will be Randy Veach. In December of 

2008, Mr. Veach was elected president of the Arkansas Farm Bureau. He previously served 5 years as the organization’s vice president and has been on the State Board of Directors since December 

of 1999. He is a third-generation farmer. He produces cotton, rice, 

soybeans, wheat, and corn on farmland cleared by his grandfather 

and his father. 

We will also hear from Mr. Tom Jones. Tom is a third-generation 

farmer from Pottsville who raises beef cattle and grows hay. Mr. 

Jones is a member of the Arkansas Farm Bureau Board of Directors. 

We are also fortunate to have Allen Bedell with us. Mr. Bedell 

is the Chairman of the Arkansas Forestry Commission. He is also 

a board member of the Arkansas Agriculture Department. He previously served as president of the Arkansas Timber Producers Association and the Arkansas Forestry Association. 

Then we will hear from Mr. Jeremy Gillam. Mr. Gillam, owner 

of Gillam Farms in Judsonia, is a specialty crop producer. He currently serves as the horticulture chairman of the Arkansas Farm 

Bureau and is also a member of the Southern Region Small Fruit 

Consortium Board of Directors. And I have actually visited up 

there with Jeremy and been enormously impressed with their operation. 

Finally, we have Mr. Michael Jones with us today. Mr. Jones has 

served as president of Merchants and Farmers Bank in Dumas for 

20 years. He is active in local and county economic development efforts and has served as a board member for the Winthrop Rockefeller Foundation, Arkansas Community Foundation, and Arkansas 

Historic Preservation Program’s State Review Board. 

Welcome to all of you all. Thank you, gentlemen, for joining us 

today. Please know that all of your written testimony will be made 

a part of the official Senate record. And with that, we will begin. 

Mr. Veach, if you will provide us your testimony. 

STATEMENT OF RANDY VEACH, PRESIDENT, ARKANSAS FARM 

BUREAU, MANILA, ARKANSAS 

Mr. VEACH. Good afternoon, Senator Lincoln, and thank you so 

much for this privilege that we have to be with you this afternoon. 

I want to really thank you especially for scheduling this field hearing that we have the opportunity to come before you and this Committee to express problems that we have suffered in agriculture 

this year and how those affect rural communities in rural Arkansas. And I just want to thank you for the opportunity that have 

given us to testify today. 

You know—and you and I have talked several times— Arkansas 

is a rural State, and rural Arkansas and all of rural America depends on agriculture, and agriculture depends on our rural communities in all of rural America. 

Arkansas agriculture is so important to the structure of these 

rural communities, keeping them stable and making them financially sound. The Arkansas Farm Bureau is a general farm organiVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
6 

zation, and as president of that organization, we are interested and 

understand the impact of the weather-related disasters that have 

been on all of agriculture. Not just certain segments of agriculture 

but all agriculture has suffered from these weather disasters that 

we have had over the year of 2009. 

Any disaster program assistance that is considered needs to 

cover the full spectrum of all agriculture, whether it is row crops 

to livestock, dairy, forestry, poultry growers, fruit and vegetable 

producers. They all have had an impact from the weather in this 

past year of 2009. 

We have had timber losses. We have had poultry plant closings 

with the Pilgrim’s Pride bankruptcy, and two plants in Arkansas 

in particular were closed down, and those producers are hurting. 

We have had the impact of the heavy rains on our row crop and 

hay production. 

The 2009 weather disasters started with the ice storms at the beginning of the year, and they have just continued to compound 

upon agriculture with horrendous amounts of rain that fell all 

across our State, with any areas receiving up 2 feet more than normal rainfall. And at times, it was very devastating to production 

agriculture in times of planting and also in times of harvesting. 

The impact that the weather has had on Arkansas farms and 

ranches has been significant and, at the very least, challenging to 

us over this past year. This impact will be felt throughout the Arkansas economy, and especially in rural Arkansas. The Arkansas 

Farm Bureau has, in fact, projected the total economic loss in Arkansas could reach over $650 million. A lot of those figures are not 

able to be put together yet because we are still harvesting in the 

State. 

Now, this is in a State that the largest industry in our State is 

agriculture. Our State’s economy is tied directly to our agriculture. 

It is the foundation, agriculture is the foundation of our economy, 

and, you know, Senator, Lincoln, you and I have talked times before about it is also the foundation of our country and the economy 

of our country. Without assistance, these losses will reduce the 

ability to provide food, fiber, and shelter not only for Arkansas and 

not only just for our Nation, but also for the world, because that 

is how important agriculture is in our country to the other parts 

of the world. Many nations depends on us to feed their hungry people. 

In Arkansas, Arkansas contributes more than 270,000 jobs in our 

State from agriculture. Agriculture contributes that many jobs. 

Workers receive $9.1 billion in wages and salaries each year; 16 

percent of our State’s total labor income is derived from agriculture. Agriculture contributes 18 percent to all value-added in 

Arkansas, amounting to almost $16 billion. 

Arkansas ranks number 11 nationally in total farm receipts, with 

46,500 farms and ranches in our State; 14.3 million acres is in production, including ranches. Arkansas is number 4 in timber production, with 18 million acres in time production, 32.3 million acres in 

agricultural production in our State. 

Our State ranks near the top producers in many areas of agriculture: we are number 1 in rice, we are number 2 in cotton, number 5 in grain sorghum, and number 10 in soybeans. 

7 

Impact of weather on Arkansas agriculture, to date, as calculated 

by the University of Arkansas Division of Agriculture, which you 

alluded to a little while ago, with all of it ground in together, about 

$471.2 million. That accounts for about $115 million in cotton, $127 

million in soybeans, and $50 million in rice. And we know that in 

my case, for instance, in Mississippi County where I farm, that we 

planted many of our crops three times. We planted cotton three 

times, we planted soybeans three times, and this made the crop 

much later in that area. And with a light crop, your production 

goes down and your yields go down. And then compounded on top 

of that, the rains that came during harvest and as the crop was 

maturing. So we have not only had yield reduction but a lot of reduction in quality in our agricultural products. 

We have lost almost 3,000 jobs due to weather; lost wages total $83 million; loss of more than $27 million in rice, corn, and sorghum, over $8.3 million lost in jobs in cotton ginning. And we know 

that once those gins go out, we lose that infrastructure in cotton. 

Our cotton production in the State is going to continue to bottom 

out. We could lose a lot of cotton production because of those 

issues. 

We anticipate many more losses. These fields are in terrible condition, and we will have to reshape those soils and get those fields 

ready for planting; and not only that, but we also probably will see 

in the quality issue in a lot of our seed that our seed quality is not 

going to be as good, and we probably will have a shortage of quality 

seed, planting seed, which translates to a higher cost to us in agriculture as well at that time. 

The SURE program, the regulations have not been released yet, 

but we do not feel like that is going to be of a benefit to us in the 

interim, but especially not as soon as we need the help in agriculture, that we need that help right away, because we are going 

to start making loans for the next crop production, and without 

some help immediately, we are going to lose some producers in our 

State of agriculture products. 

If we want to continue to have stable rural communities, protect 

the largest industry in our State, while providing an abundant, affordable, safe food supply for this State, for this Nation, and for the 

world, we will need some assistance in agriculture. 

I want to thank you for your time this afternoon. I also want to 

thank you for your commitment to American agriculture and for 

your commitment especially to the men and women who make 

their living in agriculture. 

Thank you. 

[The prepared statement of Mr. Veach can be found on page 117 

in the appendix.] 

Chairman LINCOLN. Thank you, Mr. Veach. 

Mr. Jones. 

STATEMENT OF TOM JONES, LIVESTOCK PRODUCER, AND 

MEMBER, ARKANSAS FARM BUREAU BOARD OF DIRECTORS, 

POTTSVILLE, ARKANSAS 

Mr. Tom Jones. Thank you, Senator, and I also want to echo welcoming you back to our home State, the great State of Arkansas. 

Chairman LINCOLN. Absolutely. I am glad to be home. 

8 

Mr. Tom Jones. My comments today will be on behalf of livestock 

producers, a segment of agriculture that is a target for some, but 

a godsend to a greater number of people. 

I have the privilege not only of serving with the Farm Bureau 

but also on the Cattlemen’s Beef Board, and that has given me the 

opportunity to tell a lot of cattle producers in this country what we 

have gone through in Arkansas. They cannot believe what we have 

had this year, so it has been a tough year. 

We certainly have had some definable losses in livestock agriculture, not to the point that the row crop producers have had at 

this point. We think our losses will be felt over the next several 

months. So we do not know exactly how bad our losses are at this 

point. 

We do know this: When there are troubles in the grain markets, 

those of us in livestock agriculture are certainly impacted by that, 

because agriculture works best when we are all profitable and moving forward. 

I would like to say that of the animal agriculture in Arkansas, 

it provides about half of the income for agriculture in the State of 

Arkansas: some $3.1 billion in poultry and eggs; $611 million in 

beef and swine; $41 million in dairy—a number that is declining, 

and you are fully aware of that; and then $185 million in other 

livestock. And just like Mr. Veach pointed out where we are in 

some of the grains, I would point out that we are number 1 in 

baitfish, number 2 in catfish, number 2 in broilers, number 4 in 

turkeys, number 8 in eggs, and 11th in the very vast cattle industry in this country. 

The losses that livestock has experienced so far this year, and 

will continue to, are not only in the amount of our forage but also 

in the quality of it, and that is, again, where we just do not know 

where those losses are going to come out at the end because we 

just will not know until the end of the feeding season how that 

goes. 

I do want to specifically address the situation with our poultry 

growers. We have had the loss of a major integrator, the loss of a 

complex in Clinton and in El Dorado, some 140-plus growers in the 

Clinton area, 290 in the El Dorado area. The vast number of these 

producers were unable to get contracts with other growers. This 

has led to a lot of farm debt that is just sitting there without any 

income to handle that. That certainly is going to see a rise in bankruptcies, and especially with our younger producers who may not 

have as many assets. 

I will bring up one name, Terry Laster, down in the El Dorado 

complex, a 7-year payout from right now on his poultry complex, 

but he cannot get a contract. He has 160 acres and a home, and 

he is not sure that he will have any of that when this is over. So 

we do talk about the industry, but we need to talk about some people. 

Certainly in our swine industry, we do not have as much swine 

industry as we used to have, but those that are still in production 

matter. They are good, hardworking people in vital parts of their 

community. Again, a major integrator left. We are down to less 

than 1,200 swine operations in the State, and that number is still 

declining. 

9 

Our dairies obviously are through a period of tough economic 

times with sluggish prices, market interruptions. They are still underwater and they need our assistance. 

And I think all of this has to be brought into everybody’s mind 

in the time when animal agriculture is really under attack. We 

know there are people who would tell all of us in this audience and 

tell you on a daily basis that we just do not need animal agriculture anymore, we are not doing it right. 

Senator, we are doing our best to provide that safe, healthy, 

abundant food system that President Veach spoke about. We also 

are contributing to our rural communities. But livestock agriculture, I would submit to you, is in desperate need of rural development. A lot of livestock producers do depend on off-farm income, 

and those off-farm jobs in those small communities are what allow 

those producers to stay in business. So rural economic development 

is vitally important. 

I think the thing that I would say to you is if we can do rural 

development and if we can open up some markets to our products, 

Senator, we have to open up some markets to our products. If we 

can do that, we can accomplish what we need to do in livestock agriculture, which is explain to people that we do it right, we do work 

hard at what we do, and we can provide that food system to the 

world. 

So I want to thank you again for the opportunity to visit with 

you today, and if you are ever up around Pottsville, come see us 

at Jones Cattle Company 

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

78 in the appendix.] 

Chairman LINCOLN. I will take you up on that. Thank you, Mr. 

Jones. 

Mr. Bedell. 

STATEMENT OF ALLEN BEDELL, CHAIRMAN, ARKANSAS 

FORESTRY COMMISSION, HOT SPRINGS, ARKANSAS 

Mr. BEDELL. Thank you, Madam Chairman, and welcome home. 

My comments today will concern the part that forestry plays in the 

rural economy. First, I know that you are all aware of the obvious 

fact that most, if not all, of the forests and the harvesting of forest 

products occur in rural Arkansas and rural America. Chain saws 

are seldom heard in the city, and most harvesting in urban areas 

occurs only when forested land is being removed from productivity 

in favor of shopping malls or housing developments. 

The prolonged downturn in housing construction has devastated 

the ‘‘solid wood’’ sector of the forest products industry. The downturn in the global economy has certainly affected the pulp and 

paper industries. Employment numbers are certainly a moving target, with mills in Arkansas and across the Nation announcing temporary shutdowns and permanent closures almost on a weekly 

basis. International Paper Company recently announced the permanent closure of two mills and a reduction in capacity at another 

with the resulting layoff of 1,700 workers. In Arkansas, recent closures of sawmills or plywood plants have been announced by Potlatch, Georgia-Pacific, and Weyerhaueser Corporations, and several 

other mills are operating on severely restricted schedules. 

10 

Each mill shutdown or closure asserts tremendously negative impacts on supporting businesses, such as logging contractors, equipment dealers, repair facilities, local hardware stores, automobile 

dealers, and even mom-and-pop stores. In Arkansas alone, approximately 30 businesses in the Mechanized Logger Program have shut 

down in 2009, probably never to return. Once forest products facilities are closed and logging contractors cease operations, these jobs 

are difficult to recover. The industry is highly capital intensive, and 

labor lost to other industries is difficult if not impossible to re-attract and put back to work. 

Each mill closure devastates local economies, not only the logging 

contractors but tax-supported entities are affected, including school 

systems and State, local, and county governments. In Arkansas, 

our Forestry Commission is supported in large part by the collection of ‘‘severance’’ taxes. The Commission staff estimates a net 

loss of $1.2 million over the next year because of decreased tax revenue generated from the downward trend of harvesting of forest 

products. 

I will not continue to attempt to impress on you the seriousness 

of the plight of the forest products industry, but I will attempt to 

make you aware of its importance in the rural agricultural regions 

of our State and the United States. For too long the timber industry has been a ‘‘step-child’’ in the agricultural field, whatever the 

reasons. This industry provided the materials for our homes and 

the paper products that we use daily. Even today we furnish 50 

percent of the energy needs in our manufacturing plants by burning otherwise waste materials. 

Let us focus on some other realities. Recent weather occurrences 

in Arkansas have caused major problems in the agricultural fields. 

Flooding was at major levels and continues to cause problems. The 

State is some 25 inches above the annual rainfall, as has been 

mentioned before. But rain falls in the forests just as it does on the 

fields. Just as flooding wreaks havoc with production and harvesting of crops, so it does with timber. Retrieving timber from the 

forests becomes much more difficult and expensive, if not totally 

impossible. The rural timber access roads and county roads deteriorate and suffer increased damage. Tracts offered for sale are often 

much farther from the normal base of operations, resulting in increased logistical problems and costs, especially for fuel. 

Meetings with Federal, State, and local officials are ongoing. I 

am especially appreciative of your staff for providing audience to 

the timber industry representatives that have been in contact with 

that office. In addition, Representative Mike Ross of the Fourth 

Congressional District and Governor Mike Beebe have listened attentively to our concerns. 

Some ideas that surfaced from these meetings are: possible involvement of the Small Business Administration on financial matters; possibilities of legislation, i.e. ‘‘cash-for-boards,’’ tax breaks for 

housing purchase, anything that puts housing construction back on 

track; recognition of forestry/timber issues when considering agriculture relief legislation; continue the efforts to look responsibly at 

biomass energy programs that are economically feasible and provide value to the American citizen; serious consideration of proVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
11 

posed legislation to increase GVW limits on highways with the addition of a sixth axle. 

In closing, I must tell you that in the 49 years I have spent working in the forests of Arkansas, with some 35 years of that time 

being actively engaged in the logging business, things have never 

been this bad. Forests and harvesting have always been a great 

part of the American landscape, and I honor the time and experiences that I have been privileged to spend in this arena. I can define a logger as a timber harvesting professional who is fiercely 

competitive, independent, and hard working, that goes about the 

daily process of delivering wood fiber to manufacturing facilities regardless of the pitfalls confronting all of agribusiness, including 

weather, government-and industry-imposed regulations, and they 

are always aware of the financial restraints confronting them. 

Loggers are the ‘‘sharecroppers’’ of modern agriculture. 

I urge you to consider ways to help preserve an industry that is 

a vital part of the fabric of rural America. 

Thank you again. 

[The prepared statement of Mr. Bedell can be found on page 58 

in the appendix.] 

Chairman LINCOLN. Thank you, Mr. Bedell. 

Mr. Gillam. 

STATEMENT OF JEREMY GILLAM, SPECIALTY CROP 

PRODUCER, GILLAM FARMS, JUDSONIA, ARKANSAS 

Mr. GILLAM. I would like to echo the appreciation of my colleagues on just the opportunity to be here today. When word got 

out that I had been invited to participate with this, I had several 

phone calls, as you could imagine, come in from producers and 

growers from around the State who were very distraught in their 

conditions and what has happened not only this year, but the 

compounding effect that has occurred over the last 2 or 3 years, between freezes like we all experienced in 2007, the market and rain 

and things, conditions again, and then 2008, and then on to this 

year with the excessive flooding. Their biggest concern was surviving the short term, but also coming up with some game plans 

on the long term. 

We have been growing here in Arkansas with the fruits and vegetable segment of the agriculture industry here at really, really 

good paces here the last several years. We have made great strides 

and have brought new growers, young growers such as myself, so 

they are all very concerned at this moment on where to go forward. 

One of the biggest things that was relayed to me was with the 

insurance programs that are available right now to the fruits and 

vegetable growers, especially here in Arkansas. Many are turned 

away from these programs due to the nature of their businesses. 

The insurance a lot of times is considered to be volatile of a risk. 

And so access is something that has been prevalent on the minds 

of many of the fruits and vegetable growers, and improving that is 

something that they have hoped that this example of what has 

happened this year would be able to maybe foster some growth in 

that area as well. 

When talking with some of the grape producers in northwest Arkansas, they were relaying to me that in 2007, for instance, total 

12 

crop loss year they had a payout of 1 percent to come back to them 

on their crop insurance. The tomato growers that I have talked to 

that are experiencing problems this year have relayed to me that 

many of them have still not received any payments at all and are 

lost in bureaucracy. 

And so one of the things that is my hope that will come out of 

some of these events and that we might be able to move forward 

on through these difficulties is improving that system for our fruits 

and vegetable growers, that they would be able to survive and 

move on to other years and continue to grow. 

Mr. Jones mentioned the young producers and the problems that 

they have. Many of the young farmers that we are attracting in to 

the agriculture industry right now are doing so through fruits and 

vegetables, and they have not had the chance to build up their reserves and their assets. So having years like we have had in the 

last two or three are forcing many of them to make some tough 

calls. We are very hopeful that maybe there might be some aid that 

can come on the short term that would help them bridge that gap 

and survive and continue to grow this industry and segment because, as we push forward to be a healthier Nation, fruits and 

vegetables are going to play a vital role in that, and especially here 

in Arkansas with the growth that we have seen. 

Also, one of the things that was mentioned to me quite a bit was 

the impact that it had on the rural communities this year. I spoke 

to several of our pumpkin growers throughout the State and was 

told in great detail of the loss of a lot of the fall festivities that 

were unable to happen this year because of the rain and everything 

and the impact that it had on the communities and their way of 

life and the enjoyment factor that goes into being a part of our 

rural communities. And so I had several that mentioned to me the 

impact that occurred there. 

One thing that I think was mentioned and alluded to in President Veach’s comments, too, was the impact on our rural infrastructure that has occurred with these rains, and, of course, a lot 

of that are roads that we all take in agriculture in order to be able 

to transport our crops and our harvest. So the road damages that 

occurred through this has also had a domino effect not only just 

with the roads and the general traffic, but also impacting our agriculture as well. And that domino effect is something that has been 

of great concern not only for me but for several of my colleagues 

that I have spoken to because the fruits and vegetable industry, especially in grapes, blackberries as well like I raise, they are not a 

crop that you plant ever year. You have waited several years in 

order to get to that point, and then you have problems. And so the 

impact that it is going to have on the future years is something 

that I appreciate the opportunity to address with you today. 

Thank you. 

[The prepared statement of Mr. Gillam can be found on page 74 

in the appendix.] 

Chairman LINCOLN. Thank you. 

Mr. Jones. 

13 

STATEMENT OF MICHAEL JONES, PRESIDENT, MERCHANTS 

AND FARMERS BANK, DUMAS, ARKANSAS 

Mr. Michael Jones. Senator, thank you for including a banker 

from a row crop county on your panel today. You know from growing up in Helena that weather is a constant topic of conversation 

in farm families and bankers who lend to farmers. 2009 was the 

year we quit talking about the weather in the Delta because it was 

so bad. We might mutter about it under our breath, but it was that 

severe. 

As has already been mentioned, the flooding in the spring was 

devastating from the standpoint of replanting. The flooding in the 

summer actually might have been okay had everything else worked 

out. It cut down on irrigation costs, one little bright spot. But when 

harvest came, if you did not have an early crop, you suffered loss. 

The bank I serve has been there for 100 years, and I have seen 

30 of those, and this is as bad as we have ever seen it from the 

standpoint of excess water, and never have we seen this kind of 

water at harvest. We have encountered hurricanes and their damage, but it blows through and it blows away. In October of this 

year, we had 4 days that it did not rain in Desha County. 

I made a lot of calls, preparing to come to see you today, to producers and other lenders, and in southeast Arkansas—and I would 

venture to say it is no different from Mississippi County to Chicot 

County; it is just some spots are a little worse than others. Out of 

the portfolio of agricultural loans we have, we do not have a single 

producer who is not seriously hurt by the weather factors of this 

year. 

Our borrowers will fall into three categories. We have one small 

group that will make a little money. They had early rice or they 

got an early corn crop out, maybe did not plant any cotton. Then 

we have another group that I doubt there is anything you or I can 

do to help them, and thankfully, that is a small group. But the 

group I would ask you to focus on is the group that is hanging in 

the balance, and that is the largest group, where if they pay out, 

they will not have anything left for their other expenses, whether 

they are equipment payments or payments to the local chemical 

houses or just a way to get through the wintertime until next 

year’s crop furnish. 

I also asked the producers that I visited with to talk about what 

they would like to see in the way of help, if it could come, and I 

am delighted to tell you that the proposal that you and Senator 

Cochran have put forward was far and away the most popular way 

to address the problem, and that is, another single direct payment 

to those in the disaster areas. 

Crop insurance is something that a lot of our producers make use 

of if they are in soybeans or other grains, but they do not feel that 

it works for them in cotton and rice, and perhaps that is something 

you and your Committee could focus attention on, is how to make 

that seem fairer to those producers going forward. And I know you 

are very familiar with these issues. 

Emergency loans at low interest are of interest perhaps to the 

younger farmers or to those who are thinly capitalized, but for a 

lot of people it will bring help, but maybe not soon enough, and 

14 

that is the other thing I would make a plea for and, that is, timely 

action. 

That brings me to talk about FSA and the role it plays both in 

administering payments and loan programs. Those offices often are 

not fully staffed, or if they are staffed, things are not always able 

to be done as quickly as the producers or their lenders need. I do 

not mean to sound harshly critical there. It is just a fact. And the 

delays can really hurt in a crisis year. 

We really appreciate knowing, have always, that we have a Senator who really understands row crop issues from firsthand experience, and in your position as Chair of this Committee, it is just a 

monumental moment for the farmers of my section of Arkansas, 

and we appreciate all that you do. 

[The prepared statement of Mr. Michael Jones can be found on 

page 76 in the appendix.] 

Chairman LINCOLN. Well, thank you, Mr. Jones, and we look forward to working with you and all of you all on the panel with so 

many of these challenges that we face. 

Before I go to some questions, I would like to also recognize that 

we do not do this job alone. We have wonderful staff that works 

with us. Certainly our Senate Agriculture Committee staff are 

here. I would like to especially recognize Martha Scott Poindexter 

and Jane Anna Harris who are here of Senator Chambliss’ staff on 

the Committee, and they do a tremendous job. They are both unbelievably brilliant women, but they also are kind of native to the 

area a little bit. They at least speak our language, both being, I 

think, natives of Mississippi, which is wonderful for us because we 

do get to work together closely. But they are tremendous and do 

a wonderful job for the Committee, and I am very grateful to both 

of them especially for being here today. 

We also have other great Committee staff that are here with us 

today, and I will let you introduce yourself to them if you do not 

already know them. Robert Holifield is our new Committee staff director, and he is joined by Brandon McBride, both of whom are Arkansans, and the real test goes to both Ashlee and Jessie who put 

this hearing together. I do not know where those ladies are, but 

they are the ones that made it happen, so I am grateful to all of 

them. 

Just briefly, I want to touch on some questions for you gentlemen. I will try to be cognizant of the time so we can get to our 

other panels and I do not keep all of you all afternoon and into the 

evening because I have not prepared dinner for you. So I am going 

to get busy. 

[Laughter.] 

Chairman LINCOLN. Mr. Veach, I just want to make sure—your 

statement is very compelling. There is clear action that is needed, 

and it needs to happen soon to keep our producers from suffering 

from some devastating weather that we have all experienced this 

year. Some of them have had a double whammy. Some of them 

have had a triple whammy. But can you kind of go into greater detail about the Farm Bureau’s concerns particularly in regard to the 

SURE program, the Supplemental Revenue Assistance program 

that is in the farm bill. I have my own significant concerns about 

the program and certainly the timeline the Department of AgriVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
15 

culture is proposing for this implementation and what that is going 

to mean to these growers if, in fact, they do not see their assistance 

until January of 2011. 

Mr. CRAVENS. Well, that is too late for the assistance that we 

need, obviously, to start off with. The SURE program in southern 

Arkansas—of course, the regulations have not even been published 

yet, and so that is another big problem that we have. FSA did 

promise us on a visit to Washington that they would be out in November, but November is drawing quickly to a close, and we do not 

have them yet. 

But we are concerned about the relief that we could possibly get 

there and the fact that most of our producers have mitigated a lot 

of their losses primarily through irrigation, which most of the time 

we have drought issues that create these losses, but this year it is 

a different situation. It is a particular situation in that it is too 

much rain. 

We have also had a big, big hit in quality. There have been producers that had to actually dump some of their soybean production 

because they would not take it at a granary because of the low 

quality of it. And we have had a lot of quality issues in cotton. We 

do not think it can address those issues as it should, and SURE 

is going to be way late, and with the type of agriculture and the 

crop production that we have in Arkansas and in Southern agriculture, it is also very—we usually pretty well are a different situation especially when it comes to Federal crop insurance because of 

the way that we are structured. You may have a loss on half of a 

farm, but the other half you do not, so that is going to put you 

above that 50-percent damage. And we all realize that we operate 

on such a narrow margin that if we have got a 50-percent damage, 

we are definitely in big trouble, and to get down to that before it 

triggers any help is not enough. 

We have got to have some help for producers that do not have 

that big a loss because what loss they do have, especially in quality, could take them right out of business. 

Chairman LINCOLN. Well, and I know we are inquiring, because 

the understanding is that the rule might—they were hoping to 

have completed by November, but I am not sure if that did not just 

affect the 2008 payment that people are still waiting on or if that 

would, in fact, cover the assistance they need from the loss of the 

2009 crop year. So we are investigating that as well, and certainly 

we will make sure that they understand that we cannot wait until 

2011 because the banker at the end of the table down there is 

going to have a real hard time helping them start their next crop 

year. 

But we would like for your to consider specifically from the Farm 

Bureau’s standpoint any ways that you think we could fix the program, and we look forward to working with you on that and hope 

that you will help provide us some of those suggestions. 

Mr. VEACH. We would love to. 

Chairman LINCOLN. And I very much appreciated your comments 

on seed and making sure that the seed are there for us in the future. These disasters do not just affect our income for the year, but 

they also affect future crops as well. 

16 

Mr. Jones, you talked about something that I spent a lot of time 

on, and that is trade, and I have worked extremely hard, cosponsored legislation in the Senate that would go a long way to loosening up the existing restrictions on agricultural trade with Cuba, 

and have been in constant contact with the new U.S. Trade Report 

Ron Kirk, along with working to ensure from Secretary Vilsack 

that agriculture and USDA will be actively engaged in trade negotiations, realizing how critically important—if there is one thing 

my Dad taught me, he said, ‘‘Darlin’, we cannot circle our wagons 

and just sell our widgets, gadgets, and hamburgers to each other. 

It is going to be a global economy, and we have got to be engaged 

in it.’’ 

So I appreciate you bringing it up. What would that expanded 

trade to Cuba mean for livestock producers in Arkansas? 

Mr. Tom Jones. Well, certainly it would make a great deal of difference to the poultry sector. I think Cuba is one of those areas 

that would really matter. And, also, any opening of a market to a 

country like Cuba that would boost grain production and send 

those products over there would just be beneficial to all. 

I will have to at least bring up another country, if I might. We 

have really got to get back into Japan with beef. We have just got 

to. And if we cannot completely get in there now, just moving them 

from 20 to 30 months would be a boon to the beef producers of this 

country that could just be a very important thing. 

So, you know, there are a lot of people who say, no, it should be 

fully open, and I think that is where we all would like to get to. 

But I sure wish we could get part of the way there and then get 

the rest of the way there if that is what it has to be. 

Chairman LINCOLN. Well, all of Asia, certainly there are opportunities, Korea and other places as well, and we want to stay focused 

on that. 

I was interested—you mentioned that we were fourth in turkeys, 

and I stood up to the plate in Washington the other day and mentioned that to one of my colleagues who was claiming to be one or 

two. And one of the interesting facts that came out of that to me 

was that of all the turkeys that are produced in this country, over 

60 percent of them are consumed between October through December, which is amazing. So if you have an effect on those crop and 

you have got such a limited window of when you are marketing 

and selling that product, you have got a real problem that you have 

to consider. So that is important. 

The last thing I would bring up is your comments about being 

respectful of livestock and meat products and how important it is 

to maintain them out there, and I just hesitate to mention this, but 

I do think it is important that we are cognizant in some efforts— 

I know in one of the—I was asked by the press not too long ago 

about a meatless Monday in the school lunch program, and I think 

it is so important to be respectful for all of the diversity that exists 

and all of our priorities that we have. But it is also important to 

have that variety, and you can do that without being disrespectful 

to people. So I hope that we will keep that in mind as well. So 

thank you very much. 

Mr. Bedell, I toot the horn of forestry all the time, and we are 

glad that you are here. As you know, I have championed legislation 

17 

to ensure the tax rate on timber gains is and remains low for our 

growers. The TREE Act is going to provide that cap gains rate. We 

want to create and extend and expand the homebuyer’s tax credit 

because we know what that means to our forestry and lumber business, getting our housing market moving, fighting to ensure that 

our timber products and manufacturers have the opportunity to 

take part in the green energy economy, as you mentioned, through 

utilization of renewable tax incentives, because under the current 

law—folks may not know that, but the current tax law, biomass 

does not far as well as some of our other types of renewable energy 

sources. So we want to work hard to make sure that both on-site 

is the use of biomass for renewable electricity, that there is a tax 

credit there under Section 45 that is comparable to what others 

have, and then also that biomass receive the same value in Section 

45 credits as all the other renewable sources. And those are important tools for us, and I think we will stay focused on that. 

But I just want to make sure you know that we do not consider 

forestry a stepchild, particularly here in Arkansas, but neither do 

we on the Committee, and we will definitely stay focused. 

I do want to compliment the Arkansas forestry industry. You set 

a good example in terms of best management practices and the fact 

that everyone in the forest and the wood forest products industry 

as well as the forestry, the Arkansas State forestry, as well as the 

U.S. Forest Service and others work together to build a best management practice that really makes sense and is very well respected nationally. So I appreciate that. 

Any ideas that you have regarding additional ways that we could 

be working to ensure whether it is providing useful tax incentives 

that help our domestic industry as it fights to really regain its competitiveness and keep those jobs that we have got left, but bring 

some of them back? 

Mr. BEDELL. What we urgently need is something that is quick, 

and most all the legislation and things are items that are down the 

road. But our industry has been—we were in the doldrums long before a lot of the rest of the economy were, and it has been a long, 

long battle, and some of our people are right at the end of the rope, 

as all of our economy is. We need jobs. If people had jobs, they 

could buy houses, they could put our industry back to work. What 

we need is something that is urgently quick. 

Chairman LINCOLN. Well, and that is a point well taken and one 

I have tried to bring up with my colleagues as we talk and hopefully move ourselves to focusing on the economy, and that is predictability. The timber tax expired in June. We were promised that 

we would be able to get that done sooner than later, and our hope 

is now that it will be a part of the extenders package that we do 

next month. But any industry cannot operate without better predictability in terms of where it is going to be able to manage its 

resources and not knowing what you can depend on there. So we 

will continue to fight hard not only for that, but also the predictability that the industry needs. 

And just so you know, we are working hard. We have recently sent a letter to President Obama requesting a $57 million increase 

in the 2011 budget, particularly for forestry, focused on forestry, 

and then also an increase of $4 million for the fiscal year 2010 in 

18 

the National Forest Timber Management Account for the Washtaw 

and the Ozark. We know—all you have to do is talk to anybody in 

the forest industry or in the Federal Treasury to know—that for 

every dollar we spend there, we return a huge payback to the 

Treasury. And it is done in an incredibly productive and respectful 

way to the environment, and it is a good thing to be doing, and it 

helps us manage our forest as well. So we appreciate that. Hopefully that will be some of the more immediate, but we are also 

going to work to be more predictable as we go through there. 

Any suggestions you have, the relationship between the national 

forests and our timber industry, in terms of maintaining vibrant 

forests and a vibrant timber industry? You all do a good job. I have 

been to your meetings down in Glenwood. 

Mr. BEDELL. Nothing off the top of my head, but we will certainly be in touch. 

Chairman LINCOLN. I hope you will, and I hope you will keep in 

mind and keep the Committee informed of what are those good relationships between our timber industry, our national forests and 

others on how we can do a better job there. 

Mr. BEDELL. Thank you. 

Chairman LINCOLN. Mr. Gillam, we are all so excited about the 

opportunities particularly with specialty crops. I attended last week 

over at the Heifer International Center just across the street there 

the Farm-to-School program that is kind of beginning to have a little bit of momentum behind it, looking at how we can work with 

local growers, particularly specialty crop growers, and reinforcing 

locally grown fruits and vegetables into the school program so that 

we give our children a sense of where agriculture—how important 

it is and where it comes from but, more importantly, also help to 

create a vibrant industry and economy for those young farmers you 

talk about, which it is enormously difficult in this environment, 

this economic environment. So any suggestions you may have to us 

about young farmers and what we can do, maybe any of the different programs like Farm-to-School or others that might be helpful. 

And the other thing you mentioned that I would like you to just 

briefly comment on is the agrotourism industry when you talk 

about our pumpkin patches and our pumpkin growers. I know I enjoyed it as much as my children did when they were small, getting 

out there and being an event for the school children, for the whole 

community to participate in, and when we see those kind of things 

destroyed as well, the impact it has on our communities. Maybe 

you can touch on either of those two. 

Mr. GILLAM. I believe when discussing the food programs that 

have really become very popular here lately, that is one of the 

strongest, I think, initiatives to help attract farmers to the fruits 

and vegetable industry. I think the biggest thing that they have 

done is that they give some hope and some structure to different 

market outputs and different ways that they can go. 

The one thing that we have found over the years in trying to attract younger farmers into agriculture as a whole is they want to 

know that there is a future there for them, and they want to also 

be able to be a part of something that is important. And being a 

part of the nutrition push and helping our children eat healthier 

19 

is something that they have responded to very well, and it is one 

of my hopes that the programs like discussed last week in a meeting here at the Heifer International Center will gain popularity, 

and through that we will be able to help form a foundation that 

will hopefully attract more and more people into our segment, but 

not just from row crop or other industries but new farmers that are 

going to get in and make a difference. 

In relation to the pumpkin festivals and the agrotourism industry, that is one of the strongest sectors of growth that we have seen 

in Arkansas over the last several years, not just with pumpkin festivals but there are other functions as well, farmers having duck 

hunts and other various things. It is something that has continued 

to see a lot of growth. Of course, the weather directly impacted 

pretty much all of those events, whether they were spring events 

or mid-summer or even the fall events that we have seen. And that 

is one of the things that I have heard the most about in the last 

2 or 3 months from people, was just the impact that it had, not just 

economic impact but the sense of community that you derive from 

being able to attend those events. And people see that as a way to 

bring their communities together and to form that unity that is 

necessary as we continue to move forward and facing the problems 

that we have in rural development. 

So that is one of the things I have been most disheartened about 

with the rain, how it has affected everything. But I do think that 

we are going to see that continue to grow and hopefully rebound 

after this year and we can get back on track with that. 

Chairman LINCOLN. That is great. Well, I know when I was in 

East Arkansas about 6 or 7 months ago, there was a group of Japanese touring, and there are a couple of farms over there, particularly rice farms, that do ecotourism and had them out and showing 

them how we grow rice and what a great product we produce. So 

agrotourism has got great potential, and we will look forward to 

working with all of you on that. 

Of course, you mentioned predictability for those young farmers, 

which we were just bemoaning with Mr. Bedell, and I am sure, Mr. 

Jones, you may have a thing or two to say about predictability. We 

would love to hear again your concerns. But you mentioned the importance of FSA lending programs for growers and rural communities. Maybe you can give the Committee a sense of how your 

business would be impacted without these programs, and then also 

give us a real-world example of how producers utilize those FSA 

lending programs. 

Mr. Michael Jones. Sure. Senator, in our bank through the years, 

the FSA guarantee program has been critically important to young 

farmers certainly, but also to farmers who have been battered and 

banged either by past weather patterns, the drought of 1980 being 

kind of another landmark year, the opposite extreme of this one; 

but in between these 30 years, there have just been any number 

of times that it has made the difference. 

I would guess that if you surveyed banks up and down the Delta, 

at times as much as 20 percent of a bank’s portfolio would have 

guaranteed programs of some sort. We use the guarantees in our 

crop production lending where it fits. We also have a good number 

of equipment loans that are guaranteed through FSA. 

20 

Chairman LINCOLN. You said 20 to 30 percent? Is that what you 

said, in your portfolio? 

Mr. Michael Jones. As high as that at times. I would not say that 

it is that way all the time or in every shop. But it is that important. And the efficient administration of those programs is just as 

critical as a banker’s decision as to whether the farmer can go forward or not. 

You had a second question there. Would you repeat it for me? 

Chairman LINCOLN. Well, I was actually asking you about what 

would business be like without them. 

Mr. Michael Jones. We would lose those farmers. I hate to put 

it that bluntly, but in crop production especially. We might be able 

to find a way to limp through on the equipment loans where the 

collateralization and cash flow fit. But for a lot of farmers with crop 

production issues where they are thin on equity or do not have a 

strong payment history, that guarantee makes all the difference in 

the survival. And as you and these other panelists have already 

discussed, the loss of jobs in the rural areas is profound, and so 

many of those jobs connect agriculture. The old truism is when 

farmers suffer in the Delta, we all suffer. And that is still the 

truth. 

Chairman LINCOLN. Well, I thank you, and I know that it was 

several years ago when we were going through one other disaster, 

and we actually had a panel of bankers that came to the Committee, and they made a tremendous impression when they started 

listing the concerns and the problems they had in what was going 

to be able to be possible and what was not. And it was abundantly 

clear that without those resources and without you there in the 

community, farmers could not make it. So that was difficult. 

Well, I want to thank all of the panel here today. Thank you so 

much for being with us and offering the Committee such good suggestions and ideas, certainly presenting your concerns, and, more 

importantly, we look forward to working with you in the future to 

address so many of those concerns and make sure that we continue 

to see the input into rural America that can revitalize it and then 

in turn allow it to be a part of revitalizing our country. So thank 

you all very much. 

[Applause.] 

Chairman LINCOLN. Now I would like to introduce our second 

panel. Our first witness on this panel will be Lawrence 

McCullough. Lawrence is the State Director for USDA Rural Development here in Arkansas. He has worked for Rural Development 

for more than 38 years, and he is going to give us an overview of 

how the agency’s programs work for our communities. 

Then we will also hear from Sam Walls. I know Sam is here because I saw him. Mr. Walls is the CEO of Arkansas Capital Corporation. Connect Arkansas is an affiliate of the Arkansas Capital 

Corporation. It has been a lending advocate for the preparation and 

education of Arkansas regarding the benefits of broadband use as 

well as for the facilitation of broadband to every Arkansas home 

and business. He will update us on the State’s efforts to accomplish 

these goals. 

After Mr. Walls, Dennis Sternberg, who is the Executive Director 

of Arkansas Rural Water Association, will update us on his organiVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
21 

zation’s efforts to ensure that our rural communities have safe 

drinking water. 

And then, finally, we will hear from Ms. Teddy Gardner. Ms. 

Gardener is the Executive Director of South Arkansas Community 

Development. Her organization provides housing assistance to families working to achieve homeownership. 

So I would like to welcome all of you. Thank you very much for 

joining us today. Please know that all of your written testimony 

will be made part of the official Committee record, and we again 

appreciate you adding your voices to today’s hearing on what we 

can do for rural America. 

So, Mr. McCullough, we will let you start. 

STATEMENT OF LAWRENCE MCCULLOUGH, STATE DIRECTOR, 

RURAL DEVELOPMENT, U.S. DEPARTMENT OF AGRICULTURE, LITTLE ROCK, ARKANSAS 

Mr. MCCULLOUGH. Thank you, Senator Lincoln, for the opportunity to be here today. On behalf of Agriculture Secretary Tom 

Vilsack, Under Secretary for Rural Development Dallas Tonsager, 

and all of us at USDA Rural Development, I want to express our 

appreciation for your commitment to rural America and your leadership on rural issues. 

Rebuilding and revitalizing rural America is a high priority of 

the Obama administration and is the mission of USDA Rural Development. I am honored to have been chosen as a member of the 

President’s team, and I look forward to working with you to ensure 

that Arkansas is among the leaders in building a new and stronger 

rural economy in the years ahead. 

The subject of today’s hearing, ‘‘Investing in Rural America,’’ addresses directly the mission at USDA Rural Development. Rural 

Development administers and manages over 40 housing, business, 

and community infrastructure and facility programs as laid out by 

Congress through a network of 6,100 employees located in approximately 500 national, State, and area offices. We are among the 

most decentralized of Federal agencies. You do not have to come to 

Washington, DC, to do business with us. We make house calls. 

[Laughter.] 

In Arkansas, you will find us not just in Little Rock, which is our 

State headquarters, but also in Harrison, Jonesboro, Forrest City, 

Hope, Monticello, and Fort Smith as well. As a long-time career 

employee before being named State Director, I knew every one of 

the 124 dedicated men and women who make up our Arkansas 

staff. We live in the communities we serve. We are your friends 

and neighbors, and we will go the extra mile to deliver the services 

rural Arkansas needs to thrive and grow. 

We do face challenges. We are not immune from the economic 

downturn. Many Arkansas communities and businesses have been 

hard hit. We cover a lot of territory. As many of you have said, 

most of Arkansas is rural. There are areas of persistent poverty, 

and we are making a concerted effort to step up our outreach to 

the neediest communities. There are also areas that are dynamic 

and growing, and we will help these rural communities build on 

their success. 

22 

Our staff has a wealth of experience. I am proud of them personally and proud of the work they do. Nearly half of our staff will 

reach retirement eligibility within the next 3 years. They do a 

great job, and they will be hard to replace. Continuity planning is 

a priority. 

Rural Development in recent years has steadily increased investment in rural America while reducing staff and consolidating many 

offices across the country. We are doing more with less. In that 

context, I am appreciative of the authority the Congress provided 

in the Recovery Act to use up to 3 percent of appropriated funds 

for administrative purposes. We need that flexibility, and I want to 

thank you and the Congress for making this possible. 

But the bottom line is, we are here to help. Rural Development 

is the one agency in Government that can build an entire community from the ground up. Last year, using both regular program 

funds and additional funds made available by the American Recovery and Reinvestment Act, or ARRA: 

We provided over 5,000 guaranteed and direct single-family housing loans totaling over $480 million, to put more than 5,000 

rural Arkansas families into new homes. 

We provided over $3.8 million to 20 multi-family housing developments providing affordable rental housing in rural communities 

across the State. 

We assisted 16 rural businesses with loans and grants totaling over $3.3 million, creating jobs and strengthening the rural economy. We invested over $15 million in essential community facilities, more than $22 million in telecommunications infrastructure, and 

over $132 million in modernizing and extending the rural electric 

grid. 

Last but not least, we assisted 58 rural Arkansas communities 

with more than $31 million in loans and grants for water and 

wastewater projects. 

But the numbers do not tell the whole story. Many of the projects 

in which we are involved are community-led. Partnerships are a 

key element. A good example is the new Phillips County Library 

in Helena. Although this is a persistent poverty area, several community organizations led the effort and provided a significant local 

cost share. Rural Development provided $200,000 to assist with the 

cost of renovating an existing building, a 13,000-square-foot structure—formerly a grocery store—which is owned by the county with 

a total estimated project cost of some $1.5 million. 

In Dermott, Rural Development helped Dermott Day Service 

Center with a B&I guaranteed loan in the amount of $650,000 to 

purchase and renovate an existing building to house eight classrooms, offices, kitchen, cafeteria, and a multifunctional auditorium. 

This facility will allow for future growth and enhance the overall 

environment for the children and staff. The Center is a nonprofit 

organization that provides early childhood education and clinical 

services for children ages 6 months to 5 years old. The service area 

includes four counties in southeast Arkansas. This one project will 

save 28 jobs and create 5 jobs in Chicot County. 

And just a few weeks ago, we announced a major regional water 

initiative with the Ozark Mountain Regional Public Water AuthorVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
23 

ity. They received $55.728 million in water loan and grant funds 

to be used to construct an intake structure and water treatment 

plant on Bull Shoals Lake as well as five water storage tanks and 

over 100 miles of transmission line extending from northern Boone 

County to Newton County and Searcy County in Arkansas. The 

new system will provide a dependable supply of quality water to 19 

rural water systems of which many of them are facing water quality and/or quantity problems with existing wells. These 19 systems 

serve around 7,500 users with a population of some 21,000. 

It is examples like these that make Rural Development an exciting place to work and a great place for the communities we serve. 

I am grateful for the opportunity to serve as State Director and 

grateful for the partnership and support of our partners in the private sector, the local government, and the not-for-profit community. 

We have a job to do, and I know we can count on your continuing 

support as we move ahead. 

Thank you. 

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

page 85 in the appendix.] 

Chairman LINCOLN. Thank you, Mr. McCullough. 

Mr. Walls. 

STATEMENT OF C. SAM WALLS, CHIEF EXECUTIVE OFFICER, 

ARKANSAS CAPITAL CORPORATION, LITTLE ROCK, ARKANSAS 

Mr. WALLS. Thank you, Senator. If I may, the other day I had 

an opportunity to observe our Senator, our Chairman. I have to tell 

you, as an Arkansan, it was a great source of pride to see my fellow 

Arkansan’s leadership ability and the high regard in which she is 

held by her colleagues, and especially her genuine concern for the 

people. 

Chairman LINCOLN. We appreciate you showing up. That was a 

great opportunity. 

Mr. WALLS. It was a very proud moment, and thank you for allowing me to participate. 

Chairman LINCOLN. We were pleased to have you there for the 

rural outreach meeting. 

Mr. WALLS. I am today here in my capacity as the president of 

Connect Arkansas. We became active in August 2007, and we are 

a 501(c)(3) nonprofit. We have an inclusive board that is representative of many interests— public, private, and education—and including providers representative of the various types of broadband 

technologies. 

The Connect Arkansas initiative is characterized by a commitment to a collaborative approach among all our partners. It is an 

initiative whose members are Arkansans who understand that in 

order for Connect to meet its objectives, we must all work together 

for the betterment of our people. 

To date, this overriding philosophical basis has enabled us to be 

ahead of the curve when compared to other States in this most important activity. We are most pleased to now include the Federal 

Government through the United States Department of Agriculture 

and the Department of Commerce as partners in this endeavor. We 

were particularly pleased that Connect Arkansas was one of the 

first entities to receive mapping funds made available through the 

24 

stimulus act, which we believe validates the work that Connect has 

done to date. 

While the estimates of broadband’s impact may vary, there have 

been numerous reports and studies over the past few years stressing that by increasing broadband use in our State, there will be a 

positive impact on the economy, create and save jobs, and improve 

the lives of our citizens. Whether you are the trademark attorney 

who lives in Eudora, Arkansas, or the high-end boutique located in 

Magnolia, Arkansas, that caters to New Yorkers, one cannot underestimate the opportunity and quality of life that broadband enables 

for our rural areas. 

According to the 2008 State New Economy Index, Arkansas was 

ranked 47th in deployment of broadband communications. In Arkansas, although 87 percent of our population has access to 

broadband services in the home, only 49 percent of our households 

actually subscribe. These statistics illustrate the need to not just 

provide access, but to also ensure that our people use it. 

As a result of this, we focus on three areas. The first area is 

mapping, and to better focus our efforts, we first created an understanding of local needs by working with providers to develop a 

first-generation broadband map that shows where access is and 

where it is not and at what speeds it operates. 

To enhance our mapping efforts, we were awarded in October a $1.58 million grant made possible through the Federal stimulus 

program and administered by the National Telecommunications 

and Information Association, or NTIA. We are now working to develop an enhanced and substantially complete map by the first 

quarter of 2010. 

The second effort is public education. When addressing Internet 

connectivity, it is not enough to just provide access. Our survey results indicate that approximately one in three Arkansans are not 

interested in the Internet. National studies have shown that in 

order to address this group, you must make the Internet relevant 

to them. In order to do that, you have to teach your communities 

how to use it. 

Of paramount importance is the need to increase the number of 

Arkansans that are getting online. It is safe to say that as more 

Arkansans get online, the service providers will continue to expand 

and enhance their coverage. It makes good business sense to do so. 

We currently have initiated pilot information technology strategic 

plan programs in four counties throughout the State, and more recently, in addition to the NTIA funding that was awarded for mapping, we received an award of $500,000 to deploy a regional rollout 

of the IT strategic planning program for Arkansas. 

The third area is implementation of the developed plan. Along 

with assisting communities in developing their broadband strategies, Connect will continue to work with each community to implement their vision. There will inevitably be those that may have 

limited resources with which to afford a computer or access, and 

we will work with service providers, State leaders, and private 

foundations to address this issue. 

There is absolutely no question that broadband access and use is 

of paramount importance to our Nation to ensure that our global 

dominance is maintained through this new century. Regardless of 

25 

whether people live in urban or rural areas, we must get more of 

our citizens online. Unfortunately, in order to do that, we have to 

change the way our people think, and that is rarely a simple task. 

It is fitting that we are in the Clinton Presidential Library today 

because just the other evening I heard him speak at an event, and 

he talked about how we must think of new ways for our citizens 

to create and build wealth. And it occurred to me, as he was saying 

that, that the Internet is an indispensable part of any new economy. 

For our rural areas the need is even greater. We are here today 

because we are trying to address the special issues that rural 

America is dealing with. Education, health care, economic development, as well as a myriad of other quality-of-life issues are particularly difficult to address in our rural areas because often these 

communities lack the critical mass that is necessary to make capital investments in them. 

Quality Internet access and usage in these communities is going 

to be a fundamental component of any solution we develop. We all 

believe in the potential of our rural State. Addressing broadband 

Internet usage is an opportunity for Arkansas to take a huge step 

forward to invest in our people. Addressing broadband nationally 

is an opportunity for our Nation to ensure that our country, and 

especially our rural areas, can remain globally competitive. 

Thank you, Senator. 

[The prepared statement of Mr. Walls can be found on page 120 

in the appendix.] 

Chairman LINCOLN. Thank you, Mr. Walls. 

Mr. Sternberg. 

STATEMENT OF DENNIS STERNBERG, EXECUTIVE DIRECTOR, 

ARKANSAS RURAL WATER ASSOCIATION, LONOKE, ARKANSAS 

Mr. STERNBERG. Thank you, Chairman Lincoln, for this opportunity to testify today. I speak to you on behalf of the Arkansas 

Rural Water Association, which is one of a nonprofit federation of 

State rural water associations that operate in all 50 States. 

Madam Chair, it is an honor to testify before you and this Committee today on the important topic of safe drinking water. Before 

I get started, I would be remiss if I did not also recognize that you 

are the first person in the history of Arkansas to become Chair of 

the Senate Agriculture Committee. And with your strong rural 

roots, I do not need to tell you of the many of the barriers our rural 

communities face every day. And I do not have to tell you that, in 

spite of these barriers, these are some of the best places in the 

world to live. This is why we are proud and honored that you hold 

this position, and we can firmly say rural American is well represented. 

The importance of safe, clean water and why we must continue 

and strengthen the efforts to make sure our citizens have it cannot 

be stressed enough. Simply put, water is life. However, far too 

many of us take it granted that the water we need to keep us 

healthy and our economy strong will always be there as soon as we 

want it. Every day, millions of your constituents count on the very 

first drop of water that comes out of their kitchen faucet to make 

that first pot of coffee or their breakfast. And when they do, they 

26 

expect that water to be safe for themselves and their families. We 

must not forget that it takes a great deal of effort to make that 

first clean drop of water your constituents count on each and every 

day possible. It takes positive programs and well-trained personnel 

to make this happen. This is why I am proud to talk about the 

strong USDA programs that make it possible to have the facilities 

and trained people who can make sure that the clean water we 

must have will be here in the future. 

The current water and waste disposal grant and loan programs 

operated by the Department of Agriculture’s Rural Utilities Service 

have a long, successful history of providing critical infrastructure 

assistance to meet one of the most basic needs in rural America— 

providing safe and affordable water and wastewater assistance to 

low-and moderate-income communities. This is one of the highest 

rated Government programs in history and one with a default rate 

that is almost nonexistent, and the delinquency rate is currently 

0.6 percent nationally. Arkansas Rural Water helps these communities not only access these funds, but help to ensure that these 

funds are used efficiently to protect the community and the Government’s investment. 

Rural Development also has the unique advantage over other 

Federal agencies by having a field structure with experience staff 

with community development expertise scattered throughout smalltown Arkansas and throughout rural America. Without this assistance, many of these communities could not survive or compete in 

the global economy. As you are aware, the economic downturn has 

also disproportionally impacted many of these small rural communities more than our urban counterparts. Small rural communities 

are also faced with the additional burden of reduced tax revenues 

that impact their ability of providing essential services like water 

and wastewater. 

Arkansas Rural Water is there to provide on-site assistance to 

these small rural communities in Arkansas. Many of these communities lack the staff, capacity, funding, or expertise to address technical water and wastewater issues. I hear daily from rural communities in need of assistance, whether it is to design or construct a 

new system, repair an existing system, or respond to a pending 

emergency, we are always there. Our mission is simple: we are 

there to restore and improve the public health, environment, and 

sustainability of these small communities or, in other words, to 

give them a level playing field with our urban counterparts so individuals and small communities can prosper in this global competitive environment. 

We are able to accomplish this important mission because of the 

help we get from the Rural Development NRWA Circuit Rider Program and Wastewater Technician Program. This program provides 

technical assistance to eligible systems to meet the real-world challenges of bringing safe, clean water to the people. These challenges 

are real, and so are the solutions we provide because of the Circuit 

Rider Program. This program succeeds because of the high-quality 

circuit rider technicians that serve the water utilities in our State. 

These technicians work with the local operators that have the responsibility of keeping the safe water flowing on a wide variety of 

issues to include: operations and maintenance, treatment, compliVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
27 

ance, construction, financial management, general management, 

and board training. 

The primary objective of this program is for the circuit rider and 

wastewater technician to work alongside the rural system officials 

and operators to show them how to solve their problems. The onsite system personnel must participate in the corrective actions 

taken during the visit. Technical assistance services will be 

prioritized as necessary to ensure the most efficient operation of 

the program. I have placed in the record of my remarks some letters from local operators that were reprinted in our ARWA Water 

Insight magazine. Please take a moment to look at them. Their 

words tell the story why this program is important, and they come 

from every single part of Arkansas. 

In Arkansas, we have trained over 1,900 water and wastewater 

system personnel a year for over two decades and provided over 

2,400 technical assistance visits a year. Over 65 groundwater protection plans have been implemented in local communities like the 

Highway 63 Water Association near Rison, and others are in the 

process of being adopted. We are on the front lines every day ensuring water is safe and available each time someone in rural Arkansas turns on the tap. When the northern half of Arkansas was 

hit with a major ice storm in January, ARWA was called on to provide emergency assistance with generators to scores of smaller 

community water and wastewater systems throughout the areas 

hit by the storm. Our technical staff made a difference in the lives 

of Arkansans who needed water more than ever during a tough 

time. 

We conduct this work though three USDA programs that are currently authorized in the 2008 farm bill. 

First is the Rural Development Circuit Rider Program. Since 

1980, circuit riders have produced on-site assistance to small communities in all States for water infrastructure development, compliance, training, certification, operations, management, rates, disaster response, public health protection—all necessary to encourage 

local responsibility and local solutions for protecting and enhancing 

water resources. This mission is simple— grassroots assistance to 

communities in need by providing safe, affordable, and sustainable 

water and wastewater services. 

Second is the Farm Service Agency Grassroots Source Water Protection Initiative. This is the only statewide initiative ensuring environmentally progressive local hands-on use for local elected officials, landowners, agricultural producers, and other interested parties. 

Third is the Waste Water Technical Assistance program. This 

initiative provides on-the-ground technical assistance directly to 

communities for wastewater treatment facilities. Assistance includes design and upgrade recommendations, daily operations and 

maintenance, assisting with renewal of permits, and helping these 

systems meet compliance requirement from State and Federal regulations. 

These programs are essential for the long-term health and vitality of these communities. Thank you, Madam Chair for your continued support. I must also thank you for your leadership and support 

in the passage of the American Reinvestment and Recovery Act, 

28 

ARRA, and I would like to briefly discuss the impact of that legislation thus far in Arkansas. 

ARRA provided $3.778 billion in water and wastewater loans and 

grants which represented the largest single infusion in the USDA 

water and wastewater programs in history, enough funds to completely eliminate the backlog of existing projects at the time this 

bill was passed. The department has spent about half of their recovery money to date. The only concern is the new backlog for assistance has actually increased to $5.9 billion. 

Let me bring it home to Arkansas. As Mr. McCullough mentioned, the Ozark Mountain Regional Public Water Authority recently received a loan of $19,365,000, $36 million in a grant for this 

needed project. This project would have never been possible without the large influx of these funds made available in this bill. It 

is also worthy to note that 76 percent of the users for this system 

fall in the persistent poverty range for income. 

In closing, NASA scientists recently announced that they have 

discovered water on the moon. This was widely reported in the 

media as a major news story. It made me think: There has never 

been a news flash when an Arkansan turns on their faucet to get 

a safe, clean water. I would like to keep it that way. And with this 

Committee’s support of the outstanding USDA programs we have, 

this is one headline we should never have to see. 

Thank you, Madam Chairman. 

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

105 in the appendix.] 

Chairman LINCOLN. Thank you, Dennis. 

Ms. Gardner. 

STATEMENT OF TEDDY L. GARDNER, PRESIDENT/EXECUTIVE 

DIRECTOR, SOUTH ARKANSAS COMMUNITY DEVELOPMENT, 

ARKADELPHIA, ARKANSAS 

Ms. GARDNER. Thank you, Chairman Lincoln. I am always not 

sure if it is ‘‘Chairman’’ or ‘‘Senator,’’ but I guess it is both. 

[Laughter.] 

Chairman LINCOLN. That is right. 

Ms. GARDNER. I get to come to you today to talk to you about 

something that is very, very dear to my heart, and I work very 

closely with Mr. McCullough, and have for many years, in assisting 

families that do not make enough money to have decent living conditions and that would otherwise never have the dream of homeownership without these programs. Without a doubt, in my opinion, the USDA Rural Development Mutual Self-Help Housing Program is absolutely the greatest program there is. I am prejudiced 

here. It does so much for so many families that other programs do 

not. It is the only program that is out there that actually works in 

just rural Arkansas—or rural America. 

Also, I have had the privilege to be the National Rural Self-Help 

Housing Association president for 2 years, and that was quite a 

honor, and I got to work with organizations all over the Nation in 

doing this program. And so I have heard all the stories—well, not 

all the stories but a lot of the stories, and everyone agrees that this 

is the absolute greatest program there is. It is also the most difficult to run, but all good things are hard. 

29 

Our organization works with many other organizations as well, 

and it is the leveraging that is very important. We work with the 

Housing Assistance Council out of Washington, DC, from land acquisition, and that enables us to be able to buy properties to hold 

for families so that we can get them at a discount and then re-sell 

it to the families. And by doing that, we only have to pay back 10 

to 20 percent of the funds, and then the other 80 to 90 percent 

stays in-house for us to either grant to the families to make their 

mortgage payments even lower or to reinvest into more properties 

to help more people. None of those funds are used for operation, 

just strictly for land acquisition. 

We are also a HUD counseling agency, which is very important. 

I cannot stress enough the need for counseling for the families that 

go through these programs—not just through these programs. I 

would have all families go through some type of counseling before 

they go into homeownership. It helps to get them more sustainable. 

It helps them understand the responsibilities of homeownership. It 

helps them to understand how to maintain their home, the financial benefits of homeownership, how to prevent foreclosure. It could 

have helped in many ways to prevent some of the activities that 

have happened here recently. I cannot recommend strongly enough 

for those programs. 

I would also like today to talk to you about the difference in the 

families, some of the families that I have had the opportunity to 

work with. The list is so long, so I will not even begin to try and 

go through all of them. But we have helped the disabled families. 

We have helped the single moms, the single dads, the elderly. We 

had an 83-, 84-year-old couple that came in. He had a great job 

whenever he was working, and he retired and they were going to 

live happily ever after. And he got sick and was in the hospital for 

2 months. He was a very proud man. He did not want to file bankruptcy. He did not want to do all of those things. He paid his bills. 

He cashed in his retirement, sold everything that he owned. He got 

them all paid, and their living conditions were incredibly bad. 

Their house was so clean whenever I went to visit them. It was just 

immaculate. But you had to be careful where you walked because 

you might fall through the floors. It was just—it was something. 

And they went several different places. Nobody could help them. 

And they came in, and I went, ‘‘I can.’’ I was so excited. And they 

got into a beautiful new home, decent housing, energy efficient. We 

do Energy Star, all of those things. Utility bills are less than $100 

a month. You know, I am very proud, you can tell. I am very proud 

of what we do and how I get to work with all of these families 

hands-on. 

We are a grassroots operation. We have five employees. And we 

have done over 135 houses. We have now got another grant to do 

another 25 houses. It is very exciting. It is very exciting. You have 

those families that touch your heart, and it carries with you from 

now on. 

We had a family that he came in and his wife was in a hospital 

bed, and she had MS. He worked at McDonald’s, and they did everything they could. They were able to keep their bills paid—or satisfied, not paid. Satisfied. So they were able to get in our program. 

They lived in a 800-square-foot apartment, three children, wife and 

30 

husband, one bath, and she was in a hospital bed, and so the hospital bed would not fit in the bedroom, so it had to be in the living 

room. They came to us, and it was, like, ‘‘I know you cannot help 

me, but I am going to tell you my situation, anyway.’’ And when 

I got to call him—4 days before Christmas—to tell him he was approved, I thought the man was going to die. He was screaming, he 

was so excited. Now they have a four-bedroom house. Her health 

has taken a turn for the worse, but, I mean, this story, it just— 

I cannot even begin to tell you how great this program is and what 

an honor it is for me to get to work with all of these families. 

I cannot even begin to tell you how much I am so proud of you 

and what you are doing and how much it means to me that you 

are here today and listening to what is going on and the need for 

so much more of this throughout the Nation. 

Like I said, I have worked with organizations throughout the Nation. They need your help. They need your guidance. There is a lot 

more that we can do, but we have come a whole long way. 

Thank you. 

[The prepared statement of Ms. Gardner can be found on page 

70 in the appendix.] 

Chairman LINCOLN. Thank you, Ms. Gardner. 

Well, that is a big part of what we have to do. Someone made 

the comment to me the other day that knowledge speaks but wisdom listens, and we do need to become wiser in this country about 

what we can do and how we can make a difference in people’s lives, 

and certainly listening here today and throughout the Committee’s 

effort is what we need to do to better understand the programs 

that exist, the good ones that are working, those that need the assistance or the motivation to improve our systems or the programs 

that exist out there. So we look forward to working with you for 

sure. But I want to thank all of you all for your testimony and just 

ask a couple of questions, if I may. 

Director McCullough, there have been many occasions when I or 

my staff have called on USDA Rural Development staff on behalf 

of our constituents here in Arkansas, and I have always found our 

staff here in Arkansas to be so very helpful. And I just wanted to 

take a moment here, if you have any of your staff that might be 

here today, to recognize them because they do a tremendous job 

and we appreciate so much in our office, when constituents come 

to us, to have such capable folks to call on. Do you have any of your 

staff with you? 

Mr. MCCULLOUGH. We sure do. 

Chairman LINCOLN. Would you all stand? I just want to thank 

you all. 

[Applause.] 

Chairman LINCOLN. We just wanted to take a moment to acknowledge them and thank them. 

Mr. MCCULLOUGH. They do a great job. 

Chairman LINCOLN. They definitely do. I know from my staff 

they are called upon frequently, and there is always assistance on 

the other end of the line. 

Director McCullough, many times Arkansans contact me because 

they are unable to identify, just as Ms. Gardner mentioned, the resources they need to improve the local infrastructure in this inVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
31 

stance or provide services to their communities. And I always tell 

people that it is not my job to dream their dream; it is my job to 

help make their dream become a reality. So I take the responsibility of helping Arkansans find the resources available to them 

very seriously, and your office has always been helpful. 

You mentioned the Ozark Mountain Water Project, which is phenomenal, but it is important to note that we would have never been 

able to have started that project without the recovery dollars. It 

was a voluminous project. It included a lot of people that it was 

going to serve, but it was difficult terrain and just a difficult 

project to get started. And without those recovery dollars, it would 

have been virtually impossible, I think, or it would have taken us 

generations of people’s lifetimes to get that done. 

You mentioned in your testimony the number of field offices that 

USDA has around the State, but aside from having those field offices in several communities, what are some of the other of the 

agencies’ outreach initiatives? And how do you ensure that people 

know that you are there and that you are able to help? Are there 

other programs of outreach that you all use? 

Mr. MCCULLOUGH. That is a real good point, and I am glad you 

are bringing that up. One of the things that came with the ARRA 

financing was 3 percent of the funding was available to us for administrative. That enabled us to actually bring on board some employees, some additional employees. These employees are being 

channeled to these areas of persistent poverty, working—and, of 

course, we have talked about the housing program and the impact 

that it has had, $482 million in obligations, 5,000 loans. So ARRA 

has helped us. 

We recognize that with the closure of some of the offices, it is 

going to be necessary that we do a lot more in the way of outreach 

and meetings, and going to these areas where we know need exists 

and making ourselves available, talking about our programs, and 

being very visible. 

Also, through enhancing our performance goals, this is a means 

by which we can channel the attention of offices to those persistent 

poverty areas, and the national office has been involved also, utilizing again some of the ARRA administrative funding to make personnel available from a national level to actually come to Arkansas 

and to blitz the State, and we help them recognize areas that we 

need some help in. 

So there are a number of things, and we realize that, you know, 

we have got to do more, and we will. 

Chairman LINCOLN. Well, we look forward to working with you 

on that. We bug you enough as it is, but, nonetheless, we certainly 

want to look collaboratively in ways that we can be more helpful 

in getting that word out. 

One last thing. One of my priorities as a Member of 

the United States Senate is to ensure that whatever we are funding in terms of initiatives, that it provides the greatest return on 

investment. And maybe from your perspective you could let us 

know which of the rural development programs would you say provides the greatest return on investment in Arkansas. Which one of 

those programs providing that greatest return maybe needs the 

most funding? Or maybe those are two different things. 

32 

Mr. MCCULLOUGH. That is a real good question, and I have to 

be very careful how I answer it. 

[Laughter.] 

Mr. MCCULLOUGH. We have got three program directors that are 

here. 

I have got a granddaughter who comes and visits me often, and 

her grandmother and I, we do something that we know we should 

not do. When she was 3 years old, we asked that question: Which 

one of us do you like best? 

[Laughter.] 

Mr. MCCULLOUGH. I know you should never do that, but at that 

very early age, the granddaughter would answer it very diplomatically by saying, ‘‘I like both of you the same.’’ 

We need all of the programs that we administer, as the testimony here has validated, and I think each of them we have, if the 

question is how many—which programs probably focuses more on 

dollars obligated, we would be talking about the housing program. 

It reaches a lot of people. But without water and sewer, you do not 

need housing. Without businesses, business loans and businesses, 

you do not need— you know, so it is a catch-22. We need all of 

them. 

Chairman LINCOLN. Well, they are all interconnected, and we appreciate that, so we will not make you choose between any of your 

children. 

Mr. Walls, in your testimony, you state that Arkansas ranks almost last in deployment of broadband telecommunications, and 

even though 87 percent of our population has access to broadband 

services in the home, only 49 percent subscribe. I would love for 

you to expand on that in terms of what role does affordability play 

in accessing broadband for rural communities. Is affordability the 

only factor? What can we do really to ensure that Arkansans have 

not only access but they can afford it, but they also understand 

what it can do for them? Is there ever any—I have to say, my husband, Steve, and I work really hard to make sure that our children 

are—that they are not just on the Internet. You know, we have 

specific times and how much time they can spend on it and where 

they can do it in the house, only in certain areas where we are 

close by so that we can kind of keep a watch on it, because obviously it provides great opportunity, but it can also be harmful if it 

is not used properly. 

But what about the interaction, the intergenerational— my kids 

are the ones that teach me. You know, it is amazing. I will be 

thinking, ‘‘How do I do this?’’ And they will say, ‘‘Well, Mom, you 

can just go on the Internet here and do that.’’ Do we ever think 

about using the intergenerational opportunity there to really educate people about the value and the opportunity that exists so that 

maybe they will want it, if we can make it affordable? 

Mr. WALLS. Well, first of all, Senator, I would like to say that 

my colleague Mr. McCullough here has got a great second career 

in the Diplomatic Corps. That was a good move on your part. 

[Laughter.] 

Mr. WALLS. I admire the talent. 

That is an issue, and one of the examples that I use about relevancy is I have an 82-year-old father-in-law who, as you know 

33 

from his age, was far removed from this kind of technology. And 

I said earlier in my comments about finding the relevance of the 

Internet to you in your life. 

Somewhere along the line—it was not from me, and it was not 

from either of his two grandsons—he got exposed to the Internet, 

and he went from an individual who spent virtually all of his time 

alone in his home to a prolific user of the Internet for the social 

quality that it brings. He has his buddies on the Internet, and he 

had the working background, and so he found—he was able to connect with people who had common interests with him. 

So for those of us who were not necessarily raised in this kind 

of environment, it really is about getting exposed to it one way or 

the other. Sometimes it is through our children. I am president of 

Connect Arkansas. My granddaughter is the one who put me on 

Facebook, and I refuse to be a Twitterer. 

[Laughter.] 

Mr. WALLS. Maybe I am not the right guy for the job. But when 

it comes to the young people and what is important about them— 

and we talk about investment. We talk about return on investment. 

The easiest positive return on investment is the young people. In 

many respects, this is about them, and it is about seeing to it that 

in our schools at a minimum they are exposed to the technology, 

they have ready access to the technology and the knowledge that 

goes with it, and part of that should be the teaching of the ethics 

or the appropriate use of the equipment. 

It is my understanding—and I have struggled with this ever 

since we have taken this task on—getting a clear answer to where 

do we stand in our school system about the availability of the 

equipment and the availability of the instruction available to our 

children on this subject, that is something that we should not miss. 

But it is about the relevancy of it. It is about exposure of people 

to it. It is the sort of thing that I think that the individual has to 

find themselves. What we are in the business of doing in our additional application through the BTOP program is about public access and public adoption. It is about exposing people to the tool. 

And through their interaction with the tool, they will find the relevancy for themselves in the use of the products, and that is where 

we think the return on investment will come from. 

Chairman LINCOLN. Well, it is true, and we have worked with a 

lot of our schools across the State to help them get some equipment 

that is helpful in expanding the children’s access to computers and 

their knowledge of it. And there is no doubt that is important. 

I noticed a group of college kids talking the other day who were 

a little bit angry that the older people had taken over Facebook. 

[Laughter.] 

Chairman LINCOLN. It was no longer hip because their parents 

were communicating with old military buddies and, you know, 

catching up with their kindergarten class from 50 years ago. They 

thought that it had been taken over by the older crowd, so I do not 

know. Maybe exposure is good, and we just keep creating things. 

But I do think it is important that intergenerational mix, the 

schools is a critical component of that exposure, and really seeing 

what you can do with it. 

34 

It is also a great tool for our kids, and one of our objectives in 

so many ways is to provide an economy that our children can stay 

here, that they do not have to leave our small rural communities. 

I know that was my Mom’s first plea to me when I was first elected 

in 1992, is please, please, please, help us in our small communities 

to create an environment, a community, you know, the economics 

where our children will want to stay there and not leave. And with 

the Internet, that is a perfect tool to keep them connected with the 

outside world, to help them to be productive economically, without 

a doubt. 

One last thing I would just ask. What have you learned from 

other States with Connect Arkansas? What is the next step for you 

all, and what have you learned from other States? 

Mr. WALLS. One of the things that I mentioned in my comments 

was the collaborative nature of the Connect Arkansas philosophy. 

We at Connect understood early on that, as I said, for us to be successful—and, that is, the immersion of our people into this technology—it was going to have to be a very cooperative, very collaborative effort. 

Some other States, for whatever reason, do not have that kind 

of environment. One of the States that has, frankly, been at this 

for several years before we came along and has shared a great deal 

of their knowledge with us—and we are great partners with them, 

and I am a great admirer of them, but they have an adversarial 

relationship with their providers, and I have never been able to understand that. It does not make any sense. But they do. 

And so what I am very proud of here in Arkansas is that everybody who is involved with this Connect project, including the providers, it has been very collaborative, very supportive. And I said 

earlier in my comments we are ahead of the curve. We are ahead 

of the curve, and, quite frankly, with all candor, we have not put 

a lot of money in this. But we have gotten there because people 

have worked together. And these deadlines for this map that I told 

you about, the Federal Government has a definition of the kind of 

map they want to see, and we have a deadline of February the 1st 

in order to be ‘‘substantially complete,’’ and I believe it is March 

the 1st to be ‘‘complete.’’ And it is a formidable task. We will meet 

the deadline, and we will meet the deadline because the providers 

here in Arkansas are supportive and help us in what we do. And 

as Arkansans, you should be very proud of that. 

Chairman LINCOLN. That is great. Thank you. 

Mr. Sternberg, in your testimony, you state that the Arkansas 

Rural Water Association has trained more than 1,900 water and 

wastewater system personnel a year for over two decades, which is 

just absolutely amazing, and provided over 2,400 on-site technical 

assistance visits a year. 

Right now, what would you say are the biggest challenges for 

water system managers in rural water? 

Mr. STERNBERG. That is a good question, and I think Mr. 

McCullough is going to agree with me and his staff probably will, 

too. Management of these utilities is getting harder and harder for 

just the simple fact of the infrastructure. The existing information 

is probably 30 to 40 years old now—the aging distribution lines, 

35 

the aging infrastructure of the collection systems, the treatment 

plants. That is the big issue on the infrastructure. 

Then you have the aging workforce in the water industry. We are 

going to have such a turnover in the industry of licensed, qualified 

operators coming before us that we have got to do a better job 

training and have money to do that, to educate and do more training of personnel. 

AWWA, American Water Works, and the National Rural Water 

Association have both done surveys showing that the aging workforce in the water industry is approaching this in the next 10 

years, we almost turn over. 

Chairman LINCOLN. That is critical because we have got—and, of 

course, that is job creation. 

Mr. STERNBERG. Yes, job creation. 

Chairman LINCOLN. If we can train the folks that we need to 

come in—— 

Mr. STERNBERG. And that is the trouble with a lot of the small 

and rural communities, is hiring qualified licensed operators as 

some of these retire, because if you do not have good jobs, goodpaying jobs in the rural community and have the infrastructure, 

most of the younger people are going to larger urban areas to try 

to find work. 

Chairman LINCOLN. That is true. 

Mr. STERNBERG. It is important to keep that infrastructure. 

Chairman LINCOLN. What was interesting, I was traveling over 

in northwest Arkansas with a couple of the water guys, and one 

of them saw—there was a woman who had four children, and he 

said, ‘‘Come here, I want to show you.’’ So we pulled up behind her, 

and she had her pick-up truck, and she had two of those huge plastic—she was filling up water. I mean, we turn our tap on, and we 

get nice clean, safe water. And to think that with four kids she was 

filling up those tanks in the back of that pick-up truck at least 

every other day just to have water in her home, to wash her dishes 

and wash her clothes, but to provide drinking water and cooking 

and everything else. I mean, it just seems unheard of in this day 

and age, but it still exists in our State. It is amazing. 

When Dennis mentioned the fact that the money that came 

through attempted to take care of the backlog, then all of a sudden 

a new backlog appeared, and the reason being is that there are so 

many people out there that had given up hope that something was 

going to ever happen, and then all of a sudden when we apparently 

were trying, you know, to eliminate that backlog, all of those people that had lost hope began to put those applications back in. And 

so then we really got a true sense of what the need is that exists 

out there. So we appreciate what you all do. 

Mr. STERNBERG. Can I add something to that? 

Chairman LINCOLN. Sure. 

Mr. STERNBERG. Talking about the need for additional funding, 

you know, USDA has done a tremendous job with their staff and 

what they do in rural Arkansas. But with applying a lot of times 

for funding, you have to deal with the regulations and the low-to 

moderate-income level issue. I truly think—you know, we rank in 

Arkansas, according to my list, 46th in the Nation. We need to look 

at that range— and possibly the Senate Ag Committee can look at 

36 

that—on how we can benefit and help our communities qualify 

easier for some of the funding that we need to make some of these 

big projects work. 

Chairman LINCOLN. I have heard that same thing from some 

communities, that the current median household income requirements has just really limited their ability, so I think you are right. 

It is accurate to look at that and see how accurate it is. I think 

we actually rate third, the third lowest median income in the country, and if it does not fit us, then who does it fit? So that is a good 

point. But thank you, and thanks for all your hard work, and the 

years of working with you have been tremendously great, so I 

thank you. 

Mr. STERNBERG. Thank you. 

Chairman LINCOLN. Ms. Gardner, as Chair of the National Rural 

Self-Help Housing Association from 2004 to 2006, we are extremely 

proud that you have had that experience, and it is bound to have 

given you opportunity to work with nonprofits from across the 

country. Were there any lessons that just stick out in your mind 

that you learn from organizations outside of our State that you 

have been able to replicate here, any best practices for community 

development organizations that you can share with us? 

Ms. GARDNER. Well, a lot of the building techniques, making our 

houses more energy efficient, and Mr. McCullough has also brought 

speakers in to talk to us about different methods and different 

ideas, not staying with the same— looking outside the box. How is 

that? Also, yes, I was the president there, but I also wanted to 

mention that I am also the president of the Arkansas Coalition of 

Housing—I have to read it—and Neighborhood Growth for Empowerment. It is a long time. And so that works more directly with 

the organizations here in Arkansas, and the needs of those organizations here are tremendous as well. And that is not all just rural 

development because now we are talking the urban areas also. 

It would be wonderful—and I do not know that this is possible— 

if we could spread some of these programs into more of the urban 

areas for housing, because they need these programs just as badly. 

I thought I would throw that out. 

Chairman LINCOLN. Well, I do not know if she is in the room, 

but Martha Jane Murray I know in our State working with the 

Clinton Foundation has done a tremendous amount in terms of energy efficiency. She went down to New Orleans after Katrina and 

worked there about how to work in energy efficiency in all types 

of different housing, low-income housing and others. And it was an 

initiative we worked on. I remember working back in 1992 over in 

East Arkansas in some of the subsidized housing of greater energy 

efficiency because the one biggest issue of losing people out of that 

housing was their utility bills. 

Ms. GARDNER. Right. 

Chairman LINCOLN. So making sure that it is affordable, and 

with all the great new technologies we have, I hope that energy efficiency will be a big issue that we draw into and incentivize in 

some of these things. 

You mentioned counseling as well, which I think is really important. One of the big issues that I try to spearhead whenever I get 

the opportunity is financial literacy and really better underVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
37 

standing what an important role that plays. Maybe your involvement in counseling gives you a greater opportunity to expand on 

the real need for financial literacy and when we need to start that. 

If we started it earlier, it might be a little bit more helpful for your 

clients. 

Ms. GARDNER. We have been working very, very closely trying to 

get into the colleges and trying to break in there, but really at that 

point, that is whenever your kids are going in and they are getting 

their first credit cards. But it even is happening in high school 

now, perhaps even as low as junior high, so that they can be more 

prepared. 

There is an old saying that whenever you teach your child to 

drive a car, you teach them. But whenever you give them a checkbook, there is nothing. When you give them a credit card, it is just 

open. You just expect them to know it. They do not know. And so 

if we could start at an earlier age to teach them about finances and 

that type of thing, then perhaps we would not have some of the 

problems that we have today. 

Chairman LINCOLN. Well, I remember vividly getting the lesson 

on reconciling my checking account when I got it from my father. 

But it is a critical step in really providing them the ability to be 

able to manage finances and to see all the things that are an opportunity to them if they manage that well, so it is important. 

Just a last thing. You talked about land acquisition. Do you ever 

run into any problem with clearing titles? 

Ms. GARDNER. Well, we just try not to buy that piece of property, 

is how we deal with that, because we do not have the time frame— 

our time is a 2-year program through Rural Development, and a 

1-year program with 3 years to get the completion done with the 

Housing Assistance Council. So we really do not have the time to 

work on those kind of issue. 

Chairman LINCOLN. It is a bigger issue in the more metropolitan 

areas, but it is one that we have run across in trying to help people 

with, you know, property that is abandoned and other things and 

really trying to get it back into profitable housing, which helps the 

neighborhood. But it is usually the clear title that is a problem. 

Just a last question. How do you get the word out about your organization and encourage folks to work with you? 

Ms. GARDNER. Mainly word of mouth, dropping our brochures, 

just kind of whenever you are eating at a restaurant, just kind of 

leave one. 

Chairman LINCOLN. Conveniently. 

Ms. GARDNER. We just kind of think of all different kinds of 

ways. We do advertising on Channel 9 because that is free. We are 

a nonprofit. We do not have enough money. Any money that you 

can get, all grantees will tell you they need it. 

We do advertising in the newspapers. We will go and talk on the 

radio. Sometimes things work and sometimes they do not. It is 

amazing to me, with all the recruitment that we do, trying to get 

our word out, that we will have somebody come in and say, ‘‘Gosh, 

I wish I would have known you were here.’’ It is like, ‘‘Ah, we are 

still not’’—and so I wish that there was some way that perhaps 

Rural Development could work with trying to get the word out that 

there are organizations throughout the country that are there to 

38 

assist them and then direct them, because it is needed, especially 

with the foreclosures and the bankruptcies. You know, I wish that 

we could make it mandatory that everybody that was going into 

bankruptcy had to go through counseling first, anybody that was 

going through a foreclosure, you have to do these steps before we 

are going to let you do this, because I think it could make a tremendous difference. 

Chairman LINCOLN. Well, I want to thank all of you all on the 

panel for being here today and sharing with us and, more importantly, for the incredible work you have done over the years. I am 

certainly grateful to have had the opportunity to work with you, 

and I look forward to doing more of that. Thank you all very much. 

[Applause.] 

Chairman LINCOLN. Now we are going to turn to our third and 

final panel for the day, and thank you all for your patience. I think 

it is good information for the Committee to have, and I am grateful 

to you for being here. 

First, we are fortunate to have Annett Pagan with Winrock 

International here with us. She is program director for U.S. Programs at Winrock. There she is. Annett is going to share with us 

how her organization has utilized USDA Rural Development programs to implement successful community development initiatives 

here in Arkansas, and I just know, having worked with Annett, she 

really does think outside the box, and it is a great opportunity for 

us in Arkansas. 

Our next panelist will be Dr. Robert Cole. Dr. Cole has 30 years 

of Federal experience, including some time at USDA. He is now the 

director of East Arkansas Enterprise Community. He will address 

some of the challenges he sees for rural communities in accessing 

rural development funding. Dr. Cole has been a long-time friend 

and somebody I have learned a great deal from, and I am grateful 

that he is here today. 

Then we will also hear from Dr. Calvin King. Dr. King is the executive director of Arkansas Land and Farm Development Corporation. He is going to share with us the difficulties he sees for limited 

resource farmers. Again, Dr. King has been a longstanding advocate in East Arkansas and somebody I met years ago, and I am 

grateful for his assistance and help in me better understanding 

some of these programs early on, and we appreciate him being 

here. 

Our final panelist is Doctor—I mean, Mr. John Squires, the CEO 

of Community Resource Group. Community Resource Group works 

with rural communities in seven States. Mr. Squires is going to discuss the challenges he sees for rural communities as they work to 

improve their infrastructure and generate economic growth. 

So welcome to all of you all. Thank you for joining us today. We 

very much appreciate you being with us. All of your written testimony will be made a part of the official record of the Committee, 

and, Ms. Pagan, we will let you proceed with your testimony. 

39 

STATEMENT OF G. ANNETT PAGAN, DIRECTOR, U.S. PROGRAMS, WINROCK INTERNATIONAL, LITTLE ROCK, ARKANSAS 

Ms. PAGAN. Thank you, Chairman Lincoln, and thank you for 

having us all here today. I am the director of Winrock International’s U.S. Programs. Winrock is a large nonprofit organization 

based in Little Rock, Arkansas, that works with people around the 

world and in the United States particularly to empower the disadvantaged, increase economic opportunity, and sustain natural resources. I am pleased to be here today to discuss USDA Rural Development’s programs and the benefits they provide to rural Arkansans and to sit on a panel with my colleagues who are my partners 

most of the time on these projects. 

Winrock’s U.S. Programs has implemented grants and cooperative agreements funded by USDA for more than 15 years. In this 

time frame, we have been awarded more than $4.8 million to complete 27 rural development projects. From community and economic development to value-chain agriculture, Winrock’s U.S. Programs has used USDA Rural Development funding to improve the 

lives of rural Arkansas. 

Winrock has implemented projects funded by the Rural Community Development Initiative, Rural Business Enterprise Grant, 

Rural Business Opportunity Grants, and Rural Cooperative Development Grants, as well as many other USDA programs outside 

Rural Development. We believe it is imperative that Rural Development programs remain committed to rural projects for increased 

success in small communities. 

Winrock International’s Nonprofit Improvement Program, funded 

by USDA’s Rural Community Development Initiative, has proven 

vital to the success and growth of Arkansas’ small municipalities 

and rural nonprofit organizations. 

Winrock has been awarded this funding for this important 

project for 6 of the past 7 years. Winrock’s Nonprofit Improvement 

Program began in 2003 with seven nonprofit organizations receiving technical assistance, allowing those nonprofits to build their capacity to take on larger and more complex projects within their 

communities. 

The Nonprofit Improvement Program now includes 45 rural municipalities and nonprofits who participate in activities provided by 

Winrock’s community development experts. Winrock has been 

awarded $1.3 million in grant funding for this program. But the 

program participants have used the tools learned in this program 

to bring home to Arkansas more than $20.3 million in Federal, 

State, and private funding. 

Winrock’s has long been involved with the Rural Cooperative Development Grant Program. The Arkansas Rural Enterprise Center 

was established in 1992 and has received approximately $1.9 million in funding from that program. Those projects always include 

assistance to minority and socially disadvantaged groups. Our activities in 2008 and 2009 focused on working with Poultry Partners, Incorporated, which is made up of more than 400 poultry producers in rural areas of northwest Arkansas, northeast Oklahoma, 

and southwest Missouri. Many of these producers employ minoriVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
40 

ties; approximately 20 percent of those poultry producers are 

Hmong. 

Other 2008–09 project activities included providing support to 

minority and limited-resource farmers who grow sweet potatoes in 

eastern Arkansas, and that 25-member Arkansas Delta Produce 

Marketing Association is 100 percent minority. This area of rural 

Arkansas is among the most impoverished in the State, with consistent high unemployment and low per capita income rates. 

Winrock has also received funding from the Rural Business Enterprise Grant and the Rural Business Opportunities Grants, 

which are vital to working with new rural businesses. However, reduced funding for these programs means projects are limited in 

scope. For example, the Rural Business Opportunities Grant 

awards now only can fund a $50,000 grant for a one-State project 

or merely $150,000 for a three-State project. This funding amount 

is, unfortunately, inadequate to support the types of replicable 

projects necessary to reduce the risk of investors and bolster opportunities for building new industries in rural areas. To fully support 

regional projects, award amounts must be increased. 

We are pleased that Congress has supported a funding increase 

for the Rural Cooperative Development Grant in 2010. The current 

appropriation is $7,924,000, or more than double the 2009 program 

funding. We appreciate your support on that, and I know that you 

remember when there was only about $1.9 million in that program. 

Chairman Lincoln, I appreciate this opportunity to make this 

presentation today. I am happy to answer any questions and 

thanks again for a great woman, a great Arkansan, who is now the 

Chairman of the Senate Ag Committee. 

[The prepared statement of Ms. Pagan can be found on page 93 

in the appendix.] 

Senator LINCOLN. Thank you. 

Dr. Cole. 

STATEMENT OF ROBERT L. COLE, PRIVATE CONSULTANT, 

EAST ARKANSAS ENTERPRISE COMMUNITY, AND PROGRAM 

COORDINATOR, UNIVERSITY OF ARKANSAS AT PINE BLUFF, 

NATIONAL WATER MANAGEMENT CENTER 

Mr. COLE. Chairperson Lincoln, thanks so very much for allowing me to have the opportunity to make a statement, testify at this 

hearing. From a child to a young man, to now young senior citizen, 

I have pretty well dedicated my life to ‘‘Revitalizing Rural America.’’ I appreciate having worked with you and having known you 

when I was employed for 30 years in USDA Rural Development, 

and since I have been retired for 15 years, I have continued to 

work closely with Rural Development and have appreciated your 

support since then. 

As a native of Crittenden County and a resident of eastern Arkansas most of my life, I have seen the United States changed; I 

have seen the East Arkansas Delta change. That is where I spent 

most of my life. But whereas much has been done, there is still 

much to be done. During my 30 years at the U.S. Department of 

Agriculture, I served at all levels and retired in Washington and 

saw people go from the outhouse to the White House. 

41 

Part of this testimony was obtained through working and calling 

friends and co-workers throughout the State, and, of course, 

Eldridge and I work close together in rural development, so we felt 

that we would talk about rural development, and I want to say 

that sitting here between Annett Pagan and Dr. King, having 

worked together with both of them for years, they will kick me on 

the ankle when I say something that I should not say. 

Lawrence McCullough, we are very proud to see you where you 

are, and although we are going to talk about rural development, 

you know, a lot of times, Senator, when you are on the payroll and 

an employee, there are certain things that you see and think but 

you cannot say them. But once you get retired, there are certain 

things that you think and you see and you can say them. And I 

do not know how to say anything but to be frank. 

First, I will have to say rural development, that is where my love 

is, that is where my heart is. From Farmers Home Administration, 

Farm Security Administration, Farmers Home Administration, and 

now Rural Development, watching those changes, at some times we 

had administrators that would come in, and they would tell us, 

‘‘You are the biggest banker in the county.’’ And then when the administration changed, that administrator would come in and say, 

‘‘You are not a banker.’’ And working with that agency and that organization, I would like to commend that panel before us, because 

all of the great things that they were saying about rural development, self-help housing, and having to see Lawrence McCullough 

not answer your question, that just made me kind of like a father 

seeing a son saying, ‘‘Ditto, and I trained him well.’’ 

[Laughter.] 

Mr. COLE. But back in to rural development, there are some 

things that when I was in DC and under President Clinton rural 

development was being reorganized, you know, you can—there is a 

way to reorganize something or to make changes without totally 

tearing it down. I was one of those that did not feel like it was broken as bad as some people felt like it was broken. But, nevertheless, I had enough time in to retire, and I left, and they just tore 

rural development up. 

A lot of the changes were for the good, and some of the good was 

merging the old rural development, Farmers Home, and then 

changing the name to Rural Development, and closing some offices. 

We know that the cost/benefit analysis dictated that there needed 

to be some offices closed. But you know what? What we also know 

is that there is something wrong when a little old lady from Gillette, Arkansas, has to travel 225 miles round trip to talk about— 

to get information about a 504 loan or grant. We know there is 

something wrong. 

Of course, Lawrence and I have kind of had some visits about 

things like this, and since he has not been there long but those 

were some things that I—being in Forrest City, I get calls from 

people in Clarendon, Arkansas, about a housing loan. They called 

me because they knew I was a former housing chief. But they want 

to sit down and talk with somebody, and they cannot talk to them 

one on one because many of them—I think Ricky Carter says that 

rural development forces people—Ricky, I am not telling off on 

you—forces people to drive uncertainty. In other words, people 

42 

have to drive and go places that they would not usually go or they 

might be too old to actually travel. 

A lot of that I think can be done by re-evaluating situations 

where people drive from Jonesboro to Newport or from Batesville 

to—yeah, from Osceola to Jonesboro or from Newport to Batesville. 

Those are pretty long distances, and my sensitivity has to do here 

with primarily the single-family homeowner who has to do all of 

this driving. And I think that some of this probably could be—that 

Rural Development ought to relook at those situations such as 

that, and maybe look at having some satellite offices somewhere. 

I know they have a few in the State, but having more satellites 

possibly. Now, FSA and NRCS, they still have offices in all the 

counties. Work out something where they can go and spend a day 

a week so those low-income families can go to them and not have 

to drive 200 miles round trip. But I know that can be done, but 

somebody just has to look at it and utilize nonprofits such as 

ALFDC, the enterprise community, get them to help you do some 

of that outreach. 

I do not know how much of that administrative money with the 

stimulus that Lawrence kept talking about, but maybe you can get 

some of these nonprofits to help you, or somebody like in the rural 

water, that outreach for those towns. That is just great. But these 

little single-family housing borrowers, they do not have that kind 

of help. The self-help is one thing, but that is talking about in a 

certain geographical area. I am talking about the total State of Arkansas. 

U.S. Rural Development has many excellent opportunities for 

housing and community facilities. However, a certain part of the 

population do not have the knowledge, skills, and abilities complete 

the paperwork. Some of the paperwork that is simple to us every 

day is not simple to complete by these low-income families. And 

they have to have some of that one-on-one technical assistance. 

They cannot afford to hire a technical assistance provider or a consultant to help them. It has to come from somebody from rural development or somebody that is helping rural development to do this 

outreach. 

Small towns and infrastructure, we have heard quite a bit of talk 

about small towns and infrastructure. On infrastructure, definitely 

you have to have infrastructure if a small town is going to do anything. But many of the small towns do not have infrastructure 

plans, and if you do not have an infrastructure plan, then you cannot go and talk to anybody about helping you with infrastructure. 

They cannot afford to hire an engineer to help them to do that. 

So now I am going to talk a little bit about the East Arkansas 

Enterprise Community. In 1995, there were three et zones and 30 

enterprise communities approved in the United States nationwide. 

The enterprise zones got $40 million each. Now, I am talking about 

the rural enterprise zones in rural enterprise communities because 

there were urban ones. The enterprise communities got $3 million 

each. After the administrative fee was cut off the top, it was $2.9 

million. 

Now, all of the towns in the enterprise communities— there were 

two in eastern Arkansas, but all of them and the one in Forrest 

City, East Arkansas Enterprise Community, all of those towns got 

43 

infrastructure plans. Not only do they have infrastructure plans, 

they have preliminary engineer costs and estimates on all of their 

needs. Eleven towns and communities in the East Arkansas Enterprise Community have $74 million worth of infrastructure needs 

identified and in a place. They have $13 million which are shovel 

ready and meet all the requirements of the stimulus funds. We 

have plans, preliminary plans on those, and they are shovel ready 

and ready to go. But I heard someone else talking about they cannot afford the 25-percent match or the 40-percent match based on 

this income. So they are just sitting there. 

Now, we do have a collaborating agreement with the Corps of Engineers where they have approved $20 million for infrastructure 

for this enterprise community. The water bill also authorized that 

Federal funds can be used to match funds, but you have got $20 

million authorize, but no appropriation to go with it. Now, the Corps asked for $500,000 in 2009. That did not happen. 

They told us to get the match. We went to the Governor. We ended 

up with $3-point-something million in match, but we did not get 

the $500,000. So we are going to be able to do some projects without the Corps money. But the Corps money did not materialize. We 

could do a lot more projects. This year, they said that they could use $6 million, and we told 

them that we can get that match. We know that we can. But the 

Corps tells us that they stand ready to go when Congress appropriates the funds. There is the authorization. 

I know all the information about no new construction and all of 

that, but we have got to figure out something, some kind of way 

in 2010 to get some of this $20 million that is out there so that 

we can leverage this money that USDA got and also leverage 

money from the State. Now, the enterprise community took that $2.9 million and lever- aged $25.6 million during that certification. Community, human, 

and economic development is where those dollars went. 

Chairman LINCOLN. We will work with you, Dr. Cole. I appreciate it. 

Mr. COLE. We need your help on that. 

[The prepared statement of Mr. Cole can be found on page 60 in 

the appendix.] 

Chairman LINCOLN. Okay. Thank you. 

Dr. King. 

STATEMENT OF CALVIN R. KING, PRESIDENT, ARKANSAS 

LAND AND FARM DEVELOPMENT CORPORATION, BRINKLEY, 

ARKANSAS 

Mr. KING. Thank you, Senator Lincoln. It is indeed a pleasure to 

have this opportunity to present to you today, and, of course, you 

have received my written testimony. I want to speak first in reference to the Arkansas Land and Farm Development Corporation. 

As you know, we have been around for some 29 years, and we have 

virtually basically three programmatic areas: that is, in agriculture 

and rural community development and our housing program and 

our youth program. 

I am also happy to say here today that also our chairman, Dr. 

Brian Cornelius, is one of our program graduates from our Youth 

44 

Program, so we have what we consider as being a major achievement in that area, and where he is now president, he has returned 

to eastern Arkansas after finishing his doctorate at the University 

of Arkansas at Fayetteville and working for a major corporate, you 

know, C corporation in the Delta. Part of that contribution from a 

future workforce development that I consider as a major accomplishment for Arkansas Land and Farm Development Corporation. 

Let me say also in our work as it relates to the limited-resource 

small farmers, we have some very serious challenges before us. 

One, we have a continued decline in the loss of black-owned land 

in the U.S. As you know, in 1910, African Americans owned roughly some 15 million acres of land. That has declined roughly to some 

4 million or less acres in this country today, and there are major 

factors contributing to that. 

I must say one of the factors that we have right now has to do 

with some of the policies that are being implemented by the Farm 

Service Agency that have proven to be detrimental in this area, not 

just to minority farmers but also to limited-resource small farmers 

in general, but particularly things that are occurring now with the 

farming community and with our small farmers is payment offsets. 

There should be a moratorium on payment offsets, on program payment offsets for small farmers and particularly for minority farmers in some of the crisis situations they are facing at this point. 

We have situations now and issues, as we talk about providing 

stimulus, we are doing just the opposite for both families and 

households in this particular segment of the population in this 

community. The Farm Service Agency is offsetting Social Security 

payments, people’s retirement where they have worked for a number of years in the farming arena, and have been forced out of that 

arena. As you well know, they have been some of the first to feel 

the pinch of the crisis some years ago. And as we move into what 

has now become a downfall type of economy for a much broader 

segment of our society, it is becoming a devastating process and application of policy for this segment of our society. 

But the offset payments from both program services for families 

and farmers is very detrimental as well as the offset payments for 

those individuals where there are now accelerating programmatic 

and policy initiatives toward foreclosures. 

I say that, Senator, to say that while that is an existing policy, 

there are alternatives. And I do not think we should be operating 

in a society today and implementing policies that are detrimental 

when there are alternative approaches to what is taking place with 

the small farmers and, in particular, with the minority farm segment of the population. 

While we have worked to address the issue of small family farm 

decline, we realize also that we would not be able to do our work 

if we were not receiving the support from USDA, in particular from 

what has been the 2501 program over the years. And I urge you, 

Senator, to continue to support that program, its efforts, which is 

now with the Office of Civil Rights, actually under Mr. Purdue 

Reed and his administration and the work that he is seeking to do 

as it relates to both the 2501 program but also understanding what 

the issues are and what the needs are as it relates to limited-resource and minority farmers. And I think you would probably be 

45 

very sensitive to—it is very sensitive to some of the policy issues 

that are being faced right now in this segment of our community, 

particularly to the extent that, as I understand it, there are efforts 

taking place where the Farm Service Agency is being assessed on 

the part of USDA or the Federal Government itself to look at not 

just the Farm Service Agency but all USDA agencies, the type of 

program of service delivery that has been provided and to what extent it has been provided and how well it is being provided in today’s time. 

Another area that I want to talk about is our housing program. 

Over the years, both in partnership with USDA Rural Development 

under RCDI, the Rural Community Development Initiative, we 

have been able to both implement some housing development program initiatives by using the tax credit program. And, of course, 

you know, the tax program comes through Arkansas Development 

Finance Authority. 

I must say while it has proven to be very beneficial to the State 

of Arkansas as well as the housing industry, along with the HOME 

program dollars, there is a need for more and changes in some of 

the existing areas right now, because along with the downfall, with 

the housing economy, as you know, so went the tax credits as far 

as purchase and marketability of those credits in a way where it 

was as attractive to both the banking industry and private industry 

as other segments were. 

But as a result of some of the outreach—but the funding is limited, and I will say for Mr. McCullough, there is more funding need 

for rural community development issues and outreach for rural development, and I agree with Dr. Cole as well on that. 

But from the housing development perspective, we were successful in the Lee County, Marianna area, where we by way of tax 

credits and HOME dollars, we built some 35 homes, a subdivision; 

there was equally some $2.6 million in housing development that 

was a result of tax credits and private investment dollars that took 

place in that. And that is what outreach can do. 

We have also in the four-city area been in partnership with the 

private sector to develop over $16 million in housing development 

that also is—this is in a multi-family type of housing development 

initiative, along with some in the El Dorado area. We presently 

have—which is pending now. And, again, understanding what is 

occurring in our economy—and these are basically low-income 

Delta region minority communities in the counties in which we 

have been working and other areas that we have worked in as well. 

We have pending right now with tax credit approval at the State 

level, Department of Ag—I mean Arkansas Development Finance 

Sty roughly $3.6 million for housing development that is drastically 

needed in the Helena-West Helena area. But, again, there are some 

issues around the tax credit issues itself as well as the availability 

for the other type of dollars for the State of Arkansas, some that 

was made available as a result of the stimulus package, but definitely there is a need for more, and in the HOME program. 

Now, what the HOME program does and how it has worked and 

been beneficial for the low-income communities in our area, it has 

been both for the renovation program as well as for the new housing construction program. As a result of, again, outreach and RCBI, 

46 

we are working with roughly some seven communities right now 

through the RCBI program. We have been able to provide the assistance to these small towns to put together the packages that 

would allow them to get the financing—these are the cities, Helena-West Helena being one, Marianna being another, and other 

towns we are working in to get the necessary funding to go in and 

renovate homes up to $25,000 in grant dollars through the HOME 

program, and up to $90,000 in new home construction, and, of 

course, it creates affordability by way of only having half of that 

being an obligation in repayment funding through the HOME program with the Arkansas Development Finance Authority funding 

program. 

Now, that particular program, again, that is by way of HUD that 

comes into the Arkansas Development Finance Authority, and 

more funding is needed for that, and it is very beneficial not just 

for the housing industry but particularly for low-income communities. 

The other area I want to speak to is on the youth. Now, youth 

we consider as being our future workforce and next generation, and 

I think there should be a lot more emphasis and more outreach 

support for a community-based organization at this as we seek to 

work with you in understanding the need to both encourage them 

and continue their education. High schools need all the partnership 

that they can get in a lot of our areas, but both to encourage them 

and to prepare them more in a fashion where they are ready for 

the workforce, but more than anything, I think it is important that 

we also have programs that encourage our youth to focus on and 

have a better understanding of agriculture. 

There is an approach now as we talk about know your farmer, 

know your food, and as a part of that knowing your farmer and 

knowing your food, you know, I think that the education process 

for our young people is even more essential, both know your farmer, know your food, but also understand and know the structure of 

agriculture and the contribution that agriculture makes in our society and in our local community. And that is equally as important. 

Now, my primary focus area, as you will see from the position 

paper, the testimony that we submitted, is around alternative crops 

or vegetable crops. We firmly believe that this particular approach 

at this is one particular area—and Ms. Pagan gave reference to 

that as well in some of the work that has been done, and we have 

partnered in doing some of that work and working with farmers to 

create what we call cooperative limited liability corporation type 

initiatives in this arena with added-value processing, but particularly vegetable crop production, that it can provide opportunities 

for both new business enterprise as well as a diversified approach 

for the retention both of minority farmers and for family farmers. 

I think also in doing so, not should we just look at the focal point 

of the funding and the necessary funding in that area and that 

area, but that should be priority and possibly additional program 

diversity in that area as far as the farmers are concerned, be it by 

way of those individuals who become entry level into vegetable 

crops, that the Farm Service Agency can, by way of either its existing policy or new policy, be able to provide a certain forgiveness of 

debt that creates the flexibility for this segment of farmers to be 

47 

able to diversify their farms where they have a strong economic 

survivability in that area. 

My final point, I think also along with that—and I commend 

what was recently announced with the dollars that went to the 

University of Arkansas at Pine Bluff for the establishment of a 

Foundation of Sweet Potato Plants for the State of Arkansas. But 

I would encourage more. I would strongly encourage more funding 

support for the University of Arkansas at Pine Bluff particularly as 

it relates to alternative crops and working in this particular area, 

this arena, from the added-value perspective as well as from the 

certification process in working with farmers and with communities 

and with organizations. 

We were the organization to certify the first black farmers in the 

State of Arkansas, some of the first farmers in the State of Arkansas, to be certified for good agricultural handling practices. And as 

we all know, that is a barrier point to expanding new market opportunity because it is a requirement in the marketplace. 

Again, I know my time is out. I am going to close at this juncture 

and say again, thank you, Senator Lincoln, for your support, and 

we look forward to that continuation. 

[The prepared statement of Mr. King can be found on page 80 

in the appendix.] 

Senator LINCOLN. Thank you, Dr. King. 

Mr. Squires. 

STATEMENT OF JOHN SQUIRES, CHIEF EXECUTIVE OFFICER, 

COMMUNITY RESOURCE GROUP, FAYETTEVILLE, ARKANSAS 

Mr. SQUIRES. Senator Lincoln, congratulations on earning your 

title, and thank you very much for trying to bestow the title of Doctor on me. 

[Laughter.] 

Mr. SQUIRES. I appreciate that very much, though I think most 

of the people that know me, that is not the first thing that would 

come to mind as far as what to call me. 

Before I start my remarks, I think I would be remiss if I did not 

acknowledge that the work that I have done for the last 34 years 

and that my organization has done would not have happened had 

it not been for another person with a title that he earned after the 

fact, and that is Judge Olly Neal. 

Back in 1976, Olly was administering the Lee County Cooperative Clinic, and as I understand the story, he would see people coming into the clinic every month, and they would be having gastrointestinal problems, and they would be back the next month. And 

it did not take him very long to realize that it was because they 

were drinking contaminated water from shallow wells, and with 

that hooked up with the National Demonstration Water Project, 

and pretty soon he was trying to peddle this need for water all over 

the State of Arkansas and came up to northwest Arkansas back in 

1976, and the rest is history. Thank you very much, Judge Olly 

Neal. 

My name is John Squires, and I am the founder and CEO of 

Community Resource Group based in Fayetteville, Arkansas. We 

are multi-State nonprofit rural development corporation with a 34- 

year history of helping people in the rural South build a future in 

48 

their own hometown. We work on issues that define quality of life 

in rural areas such as water and wastewater infrastructure, transportation, affordable housing, and access to capital. 

When you consider that three-quarters of the 1.2 million small 

businesses in rural America have less than 20 employees, it is easy 

to see why small business is so important to a rural State like Arkansas. Surveys indicate that small firms in rural areas are more 

likely to provide community leadership, invest in the local community, and are less likely to relocate. The challenge is to find ways 

to strengthen and help grow small businesses because in finding 

that, we find ways to strengthen and grow rural Arkansas’ economy. 

The Center for the Study of Rural America at the Federal Reserve Bank of Kansas City identified three major challenges to the 

growth of entrepreneurial activity in rural America: labor, capital, 

and infrastructure. How do we invest in the small businesses and 

entrepreneurs in rural communities to help them grow and prosper, thus creating the good-paying jobs that will attract the skilled 

labor necessary to take rural Arkansas businesses to the next level 

and further improve the vitality of our rural communities? 

Thirty years as a rural development practitioner, including 6 

years on the board of Alt Consulting, a nonprofit business consulting firm based in the Arkansas Delta, has convinced me of 

three things. 

We need to focus our finite resources and efforts on businesses 

that have real growth potential. Before extending credit to small 

businesses, we need to provide high-quality, on-site, capacity-building assistance that is affordable but not free. 

We need to find alternatives to traditional collateral-based lending. Small businesses located in low-income areas typically lack the 

assets to qualify for the loans they need to grow their businesses. 

Community Resource Group supports rural businesses by providing on-sit assistance and capital to improve rural community 

water and wastewater infrastructure. Thirty years ago, we started 

helping rural communities across the Ozarks Mountains to plan, finance, construct, and manage community public water systems 

that provided first-time services to hundreds of families that had 

previously relied on shallow wells and springs for water. 

Incidentally, these are the very community systems that we 

helped build that are now being connected to the regional system, 

and we are delighted. 

Today, CRG provides on-site assistance to approximately 500 

rural communities across seven States to ensure that public water 

and wastewater systems that are needed by the residents and business alike are operating properly. 

Since launching our infrastructure loan fund in 1992, CRG has 

closed over 300 loans to water and wastewater systems totaling 

more than $20 million. But it is the USDA’s water and wastewater 

disposal loan and grant program that does the heavy lifting in 

rural America in providing major funding to rural water and 

wastewater needs of rural communities. 

This long-running program works well and has contributed 

mightily to the viability and vitality of so many rural communities. 

This program works. It simply needs an increased appropriation if 

49 

it is to meet more of the backlog that we are discovering every day 

in order to provide safe water in our rural communities so that everyone can take it for granted. 

Like small private sector businesses, nonprofits providing technical and financial assistance to rural communities and small businesses are also challenged by the lack of access to adequate capital, 

especially for re-lending. The rural development programs, such as 

the Intermediary Relending Program, or IRP, represent an important source of financial support for nonprofits working on the front 

lines of rural development. However, in fiscal year 2009, the appropriation for the IRP program was $33.3 million, or just $660,000 

per State, if divided equally. Funding for the IRP program needs 

desperately to be increased. 

While not perfect, USDA’s Rural Development programs work. I 

would urge the Committee to build on what works and expand 

those USDA programs that are already successfully investing in 

rural America. 

In conclusion, for most of the 60 million residents of rural America, Rural Development at USDA is a primary source of Federal financial support for community economic development efforts. We 

appreciate the hard work and the responsiveness of the staff here 

in Arkansas and their hard work on behalf of rural communities 

across the State—even if the director cannot choose among his children. 

[Laughter.] 

Mr. SQUIRES. The American Recovery and Reinvestment Act this 

year provided a very welcome influx of funds for rural development 

programs and is providing a significant but one-time shot in the 

arm. We hope the important work of rebuilding essential community infrastructure that began in 2009 will not be forgotten in 2010 

and beyond. 

We do understand that the Federal deficit is growing and that 

securing increased appropriation for rural programs will not be 

easy. But rural has never been easy, but it has always been worth 

investing in. 

Thank you, Chairman Lincoln and the Committee, for considering my testimony and for your focus on the needs of rural America and in Arkansas. 

[The prepared statement of Mr. Squires can be found on page 97 

in the appendix.] 

Chairman LINCOLN. We very much appreciate your testimony, 

Mr. Squires. Thank you so much for being here. And I would like 

to echo your words of thoughtfulness to Judge Olly Neal, who I also 

have found in my career to be a great counsel and someone whose 

main objective is to help his neighbor and to work through the 

community to do that. So I appreciate that. I appreciate him being 

here. 

Thanks to all of you all for your testimony. I have got a few questions that I would like to kind of converse with you about. 

Ms. Pagan, when I meet with constituents who are just starting 

a project and they have got a dream—and as I tell them, it is not 

my job to dream their dream, but to help them make that dream 

happen—I also tell them that it is unlikely that they are going to 

find all of the funding they need in just one program. Oftentimes, 

50 

they have to apply for several different grants, combine them in 

order to have enough funding to complete the project. I am just curious, and I hope I know the answer, but has this been Winrock’s 

experience as well? And if so, can you give us some examples of 

partnering that have happened that you feel like is a wise use of 

collectively bringing dollars together? 

Ms. PAGAN. Chairman Lincoln, Winrock’s U.S. Programs has had 

the unique ability to piece together several USDA programs to 

move a project from the conception to reality, as I know several 

other members of this Committee have been able to do so. 

Winrock was awarded a Rural Business Opportunities Grant to 

look into value-added opportunities for farmers in eastern Arkansas a number of years ago, and the study indicated that there was 

really a need for oilseed processing in the Delta and resulted in private sector investment by the England Grain Dryer to bring a soybean oil extrusion plant on board. And this England Grain Dryer 

also needed some technical assistance. Through the Rural Cooperative Development Grant funding, we provided some much needed 

on-the-ground technical assistance, subsequently giving the England Grain Dryer the tools to leverage some funding with the Delta 

regional authority along with that private sector investment to 

complete the construction of the soybean oil extrusion plant. 

The building of this plant led to other private sector investments 

in several biodiesel production facilities in Arkansas. Biofuel refineries have potential to create jobs across the mid-South. A recent 

study coordinated by the Memphis Bioworks Foundation and 

Winrock International indicates the expanding biofuels and biobased products business sectors could bring more than 25,000 jobs 

in the mid-South Mississippi Delta region, so a total of about 34 

programs put together made that possible. 

Chairman LINCOLN. Well, you mentioned the success you have 

had with the Nonprofit Improvement Program, and certainly it is 

impressive to see 45 rural municipalities and nonprofit organizations that you have worked with have been able to obtain that $20 

million. Could you talk a little bit more about how local leaders can 

participate in that program in the kind of mentoring activities that 

Winrock provides? Or are there programs that you all do that help 

get leaders engaged and involved in that? 

Ms. PAGAN. First of all, we have marketed the program through 

both the Arkansas Department of Rural Services and the Arkansas 

Municipal League. Because or this marketing effort and the great 

success of the program—and leaders around rural Arkansas have 

heard about the program—we now have a waiting list for participants in that program. 

The grant application requires that we have project recipients 

identified and secured for participation at the time of the grant. 

The real criteria for getting into the program is that the smaller 

the community and the more distressed the area, the higher the 

poverty rates and more likely they are to get into the program because we actually are scored higher with USDA Rural Development. 

They have historically decreased the amount of awards and 

raised the match requirements, and it leaves many organizations 

unable to participate and without technical assistance. 

51 

In September, we submitted a new grant application that would 

include seven new participants, and at Winrock, because we believe 

that once you are a client, you are always a client. If funded, then 

those seven participants add and join the 45 others who have continued to access our mentoring programs and workshop trainings. 

I know that you are well aware of the national study tool that is 

attached to this program. 

We know, though, that our on-the-ground experience shows that 

the short 18 months that these communities participate does not 

solve all their needs and their problems. So we continue to struggle 

to support those communities and nonprofits. Because of this limited funding amount and the 50/50 match requirement, we must 

limit our services as well as the amount of organizations we can 

assist. 

We have seen and rural Arkansas has seen the success of this 

program. We strongly believe that rural communities and nonprofit 

organizations can strengthen their capacity and see projects to fruition. As I mentioned in my opening statement, this program is 

vital to continued improvements in rural communities. 

Chairman LINCOLN. Well, it is so important because when you 

work with those rural communities, as we do in our office, you realize that there is a real need for technical assistance, and it is a real 

key for them to be able to reach that dream, because they do dream 

those dreams and it is a wonderful thing to see the innovation and 

the ideas that come out. But the technical assistance is absolutely 

critical to be able to access the resources and the things that they 

need. So that is very important. 

You mentioned biofuels. We are working hard. In the Senate Energy Committee, we marked up a bipartisan bill, and hopefully we 

can see that to fruition pretty soon because, unfortunately, we are 

seeing a lot of our biofuels industry dormant at this juncture— 

about 90 percent of them dormant, about 50 percent of them are 

bankrupt at this juncture. We have got to get that back into the 

economy. We have got to figure out—because those are good jobs. 

They are sustainable jobs. And, again, the excitement and the enthusiasm in rural America is there for that, so it is going to be important. 

Dr. Cole, you mentioned that the East Arkansas Enterprise Community has taken $2.9 million and leveraged $26 million more for 

community and economic development, and that 9:1 ratio of leveraged resources is so impressive. Can you tell us about some of the 

projects that you were able to implement with that? And what were 

your priorities there in terms of using the leveraged dollars to really maximize the outcome? 

Mr. COLE. There are 11 working benchmarks that the enterprise 

community had, and infrastructure was one of the important ones 

where we did the most leveraging. An example would be a community center. We were working with 11 small towns, and only three 

of them had community centers to start with. So we are talking 

about community development, and the community had no place to 

go to meet and sit down and talk about community and economic 

development. 

So we zeroed in on community centers for all of the small towns, 

and at the end of the certification, there were only two towns that 

52 

were left that did not have community centers. But an example 

would be Wynne, the McCallum Center in Wynne, and most of this 

leveraged fund came from USDA Rural Development because it fits 

the programs and we knew the programs having come from there. 

So that particular community got together—they did not have a 

community center—and they raised $100,000 from the community, 

from the businesses. The enterprise community took $100,000 of 

the resources that it had and helped. They provided the land. They 

got the land, furnished the land, and we put $100,000 in to help 

with furniture and some other things. And the USDA Rural Development actually financed the community center. 

So there we took $100,000 and leveraged in excess of $1 million. 

So those type of projects throughout the period enabled us to have 

what we saw was an economic impact and provided the towns and 

communities a place to meet and actually sit down and talk about 

community development. 

A town without a community center, they really cannot— they 

have no place for a youth program; they have no place— you know, 

some of them try to meet in churches, but you will have some people of the community that will not go to a certain church. So in 

order to be inclusive, every town needs this own meeting place. But 

that is just one example. 

Chairman LINCOLN. Sure. You know, we just had a hearing on 

the child nutrition reauthorization, and one of the programs that 

we are really focusing on that is so important that is very difficult 

to important, particularly in rural areas, is the summer feeding 

program. Without a meeting place in those small rural communities, the idea of transporting those children to another congregate 

place where they could have that summer feeding program does not 

really seem like the best solutions. But when they do have a local 

community center, a place where you can do that, it is better—certainly you have got a better option at being able to feed those children during the summer. So thank you very much. 

Dr. King, you discussed the need to provide more training and 

technical assistance, which I have just been talking about, in farm 

development, crop production, risk management, local co-ops, and 

LLC development. I know that your organization has provided 

technical assistance to farmers. Can you describe some of your recent work and what has been successful for those limited-resource 

farmers that you have worked with? 

Mr. KING. Well, one of our real focus areas has been retention 

of the farms, and success has been each farm that we have been 

able to retain and dealing with the consistent regulation changes 

with USDA Farm Service Agency, particularly as it has had to do 

with the program servicing area. That is both in the debt restructuring and working with farmers from that perspective to the extent of even going through the process of working with them 

through appeal proceedings and the processes for appeals, where 

you do know that individuals get the full benefit of what the full 

due process, what is allowable to them by way of USDA and use 

of the National Appeals Division to make sure that everything has 

been dealt with in a fair and equitable manner from a policy application perspective. 

53 

We also provide training in that area, and we also bring together 

partners, and I am saying resource agents, that is, USDA itself. 

And we bring them together on a frequent basis to talk about both 

our programs and the application process of those programs, what 

is available to them, be it with Rural Development, be it with 

NRCS, including the Farm Service Agency as well as other agencies, both private as well as State agencies. 

The importance of that is that what we find in the communities 

we work in is the information dissemination just does not get 

there, or does not get there to the extent that people are really able 

to comprehend and really identify because there is so much. There 

is so much both in application process, there is so much also in the 

regulation aspects of that. 

So we find it beneficial when we have sessions just of this nature 

where we are working with our constituents from a training perspective and an information-sharing standpoint, they also understand the resource agencies and how those agencies can partner 

and best benefit them with the type of services that they provide. 

You mentioned the fact that there is a dream, you know, and you 

cannot necessarily get or really understand the fulfillment of that 

dream until you clearly understand what resources are there that 

could enable you to realize that dream and understanding what 

Rural Development does and how it can help from a housing perspective, how AFDA can help you and how AFDA and rural and 

urban partners together to provide housing, ownership opportunities, or how to bring about or create a safe housing situation about 

where use of the home monies and partnering the home monies 

back in with the HPG, the Housing Preservation Grant dollars, and 

that when you have a situation that is both unhealthy and unsafe, 

at all the same time where the income is not as set, where individuals are able to improve the status of what their situation is. 

So we work with them both from a training and from a handson perspective on all of our clientele, in our housing areas, in our 

farm program area, and from a cooperative development program 

perspective as well. 

As I mentioned, one group with which we have been doing some 

partnership work, Winrock International along at Arkansas Land 

and Farm Development Corporation and others to deal with the 

issue around farm safety and farm security from a food perspective. 

The group that Ms. Pagan gave reference to, we have worked with 

them also as a collective group working from an LCC or the equivalent of a cooperative to understand what the food security and food 

security really represents in giving them access to market opportunity. There is a requirement within the marketplace and equally 

as much of a necessity for that in the future as we try to move 

more toward expanding and building on that type of enterprise. 

It is an enterprise that we believe that there are opportunities 

for expansion and development in, one, from an infrastructure perspective because now both Farm Service and Rural Development 

offer additional resources in that arena from a financing perspective, but it is important that our constituents and the small farmer 

and the minority farmers understand the process for accessing 

those resources, be it for getting the loans where you can put the 

cooling systems on those farms now, which it was not, you know, 

54 

available at one given point in time, as well as the cooperative development funding. I think cooperative development funding and 

support by way of USDA—and I think Ms. Pagan would probably 

agree with me on this, is that we do not have the sufficient resources, the type of resources that are necessary in that arena. But 

we find also it is imperative that the small farmers and limitedresource farmers work in a collective manner but from a core perspective of LCCs to build those type of organizations, small type of 

business enterprises in our rural community and in that particular 

area of the business community. 

Chairman LINCOLN. It is essential. I had a friend that I grew up 

with in East Arkansas who wanted to move to fresh fruits and 

vegetables, and realizing how expensive it was going to be to have 

that equipment to be able to process or cool down immediately was 

something else. And you mentioned know your farmer. We had a 

great discussion, as I mentioned earlier, over at Heifer about the 

farm-to-school program, and also you have to do is visit downtown 

to the farmers market here where people truly do enjoy and certainly appreciate being able to know their farmer. And I think it 

is a great tool to really bring back the kind of respect and consideration that Americans need in terms of knowing where their food 

comes from, that it is not just coming from a grocery store shelf. 

And that is, I think, an important thing. 

Mr. Squires, your testimony focused—or you mentioned, anyway, 

the USDA Intermediary Relending Program, and as you mentioned, it makes loans to nonprofit lenders who in turn make the 

loan to finance business and community development projects in 

those rural areas. Your comments that the Community Resource 

Group has had difficulty in competing for those funds in recent 

years because of the IRP’s scoring preference for organizations 

serving less than 14 counties, can you tell us why an organization 

like the Community Resource Group could use the IRP funds more 

effectively if it was allowed to serve that larger area? Administrative costs, I would think. 

Mr. SQUIRES. When you are doing infrastructure loans, it is a difficulty. The restriction we are talking about here is a 14-county— 

a preference for 14 counties or less, and if you do not serve less 

than 14 counties, you do not get those points in that category. If 

you are an infrastructure lender—and we do small infrastructure 

loans—it is very difficult in a 14-county area to revolve that money 

as quickly as it comes in. On a larger area, we are able to ensure 

that that money gets to the communities that need it as quickly as 

it comes back in. And it seems to us that the emphasis should be 

on not the size of the lender’s service area, but the amount of distress in the community that is borrowing. 

Chairman LINCOLN. The need. 

Mr. SQUIRES. We would prefer to see the preference being given 

to USDA’s persistent poverty counties, for example, of which there 

are 17 in Arkansas. That seems like an artificial restriction that 

keeps certain lenders from having access to that money. 

Now, I will say that we started our—— 

Chairman LINCOLN. Is there a definition for the persistently poor 

counties? 

55 

Mr. SQUIRES. Yes, it is basically that—I think the last three censuses have had more than 20 percent poverty, since, I think, 1960. 

Chairman LINCOLN. How many of our counties in Arkansas 

are—— 

Mr. SQUIRES. Seventeen. We have a lot in the Delta. We have 

some up in the northwest, in Newton and Searcy, and then we 

have some down in the southwest. 

Chairman LINCOLN. One of the other things we have talked a lot 

today about is the huge infrastructure needs that we have in our 

State’s water systems and a host of other things. We talked about 

how expensive those improvements are going to be. 

You mentioned the Community Resource Group had made a $70,000 loan recently that would allow a small community in 

north-central Arkansas to upgrade equipment for its water system, 

and that is going to improve efficiency. It is going to save money 

for local residents. Maybe you could just briefly touch on how important it is for these rural communities to have access to this type 

of capital for maintenance and repairs. That is always hard to find, 

but it seems it is the sort of thing that really meets a critical need. 

Mr. SQUIRES. As somebody mentioned earlier, our operators are 

getting older. They are getting older along with their systems. 

Chairman LINCOLN. Dennis. Yes. 

Mr. SQUIRES. And both USDA and EPA have indicated that the 

financing need for repairing these systems that are, frankly, wearing out is beyond—what appears to be beyond our ability to fund 

these. While USDA and the State SRFs, the State programs do the 

large funding, the transactions cost of doing a small loan is usually 

about the same as it is for a larger loan. And in USDA’s case, for 

example, last year USDA did about 1,230-some loans for about a 

total of about $2.5 billion, which means that the average loan size 

was $2 million. 

A small system of, say, less than 1,000 customers does not need a $2 million loan. It needs money to repair the leaks in its system, 

to upgrade its equipment, to extend that line out to another family. 

And those are the kind of loans that we provide, as well as when 

a system does need that big improvement, somebody has got to pay 

for the engineering up front. So we do those pre-development loans 

that coordinate very closely, and then we get taken out by USDA. 

A lot of our referrals, frankly, come from our State offices, both 

on the regulatory side and on the financing side. It is another way 

for them not to say no, and we can turn these loans typically in 

2 weeks. We are very proficient at it, no loan losses in 300 loans, 

and it works very well. I think it is a nice add-on to the rural development programs. 

Chairman LINCOLN. Well, that is great. Well, we want to thank 

this panel very much for your input in today’s hearing, and we are 

grateful to you all for the tremendous work you do across our State 

and the great working relationship we have. We want to continue 

that with your good ideas and suggestions and concerns. 

This is going to conclude the Senator Agriculture Committee’s 

field hearing. I want to thank all of our participants who have participated today, and I am grateful that you all were here to share 

your perspective with us. It is truly an honor for me to be the first 

Arkansan to serve as Chairman of the Senate Agriculture ComVerDate Nov 24 2008 14:37 Jan 20, 2011 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 C:\DOCS\62721 MICHA
56 

mittee, and I really look forward to working with you to shape the 

Committee’s agenda. 

We have all worked, many of us, hand in hand and certainly for 

a long time in Arkansas to pursue rural development because most 

of us grew up in rural communities. We grew up in small towns, 

and we still believe in them. We still know that the best place to 

travel to is our Mom’s kitchen table. We like to go home and oftentimes reminisce about what it would be like if we had been able 

to stay there. And I think as we look to try to build on rural development here in Arkansas, we know that there is a great opportunity that exists there, and we want to work together. 

I also want to thank the audience. You have been very patient. 

I appreciate your interest. As I mentioned earlier, I hope that you 

will take the opportunity to fill out the cards that you were given 

as you entered today. We would like to have an opportunity to answer your questions or address any concerns that you may have 

and certainly to get your feedback on the issues affecting our rural 

economy. 

Finally, the Committee will keep the official record open for 5 

business days if you would like to submit a written statement. We 

are glad to take that. But I do appreciate the input from Arkansans to the Senate Agriculture Committee and am grateful for your 

passion and your interest in what we can do. And we look forward 

to working with you again with your feedback and concerns and 

hope that you will share those with us. 

So thank you all for being here. I wish everyone a wonderful, 

wonderful Happy Thanksgiving. We are blessed to live in this great 

country, much to be grateful for, and much to do in our work ahead 

of us. So thank you all for coming. 

The Committee is adjourned. 

[Whereupon, at 4:12 p.m., the Committee was adjourned.] 

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