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93–969 PDF 2015

IMPLEMENTING THE AGRICULTURAL ACT OF 

2014: COMMODITY POLICY AND CROP 

INSURANCE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

GENERAL FARM COMMODITIES 

AND RISK MANAGEMENT 

OF THE

COMMITTEE ON AGRICULTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

MARCH 26, 2015 

Serial No. 114–9 

( 

Printed for the use of the Committee on Agriculture 

agriculture.house.gov 

COMMITTEE ON AGRICULTURE 

K. MICHAEL CONAWAY, Texas, Chairman 

RANDY NEUGEBAUER, Texas, 

Vice Chairman 

BOB GOODLATTE, Virginia 

FRANK D. LUCAS, Oklahoma 

STEVE KING, Iowa 

MIKE ROGERS, Alabama 

GLENN THOMPSON, Pennsylvania 

BOB GIBBS, Ohio 

AUSTIN SCOTT, Georgia 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

SCOTT DESJARLAIS, Tennessee 

CHRISTOPHER P. GIBSON, New York 

VICKY HARTZLER, Missouri 

DAN BENISHEK, Michigan 

JEFF DENHAM, California 

DOUG LAMALFA, California 

RODNEY DAVIS, Illinois 

TED S. YOHO, Florida 

JACKIE WALORSKI, Indiana 

RICK W. ALLEN, Georgia 

MIKE BOST, Illinois 

DAVID ROUZER, North Carolina 

RALPH LEE ABRAHAM, Louisiana 

TOM EMMER, Minnesota 

JOHN R. MOOLENAAR, Michigan 

DAN NEWHOUSE, Washington 

COLLIN C. PETERSON, Minnesota, Ranking 

Minority Member 

DAVID SCOTT, Georgia 

JIM COSTA, California 

TIMOTHY J. WALZ, Minnesota 

MARCIA L. FUDGE, Ohio 

JAMES P. MCGOVERN, Massachusetts 

SUZAN K. DELBENE, Washington 

FILEMON VELA, Texas 

MICHELLE LUJAN GRISHAM, New Mexico 

ANN M. KUSTER, New Hampshire 

RICHARD M. NOLAN, Minnesota 

CHERI BUSTOS, Illinois 

SEAN PATRICK MALONEY, New York 

ANN KIRKPATRICK, Arizona 

PETE AGUILAR, California 

STACEY E. PLASKETT, Virgin Islands 

ALMA S. ADAMS, North Carolina 

GWEN GRAHAM, Florida 

BRAD ASHFORD, Nebraska 

SCOTT C. GRAVES, Staff Director 

ROBERT L. LAREW, Minority Staff Director 

SUBCOMMITTEE ON GENERAL FARM COMMODITIES AND RISK MANAGEMENT

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas, Chairman 

FRANK D. LUCAS, Oklahoma 

RANDY NEUGEBAUER, Texas 

MIKE ROGERS, Alabama 

BOB GIBBS, Ohio 

AUSTIN SCOTT, Georgia 

JEFF DENHAM, California 

DOUG LAMALFA, California 

JACKIE WALORSKI, Indiana 

RICK W. ALLEN, Georgia 

MIKE BOST, Illinois 

RALPH LEE ABRAHAM, Louisiana 

TIMOTHY J. WALZ, Minnesota, Ranking 

Minority Member 

CHERI BUSTOS, Illinois 

GWEN GRAHAM, Florida 

BRAD ASHFORD, Nebraska 

DAVID SCOTT, Georgia 

JIM COSTA, California 

SEAN PATRICK MALONEY, New York 

ANN KIRKPATRICK, Arizona 

(II) 

(III) 

C O N T E N T S 

Page 

Conaway, Hon. K. Michael, a Representative in Congress from Texas, opening 

statement .............................................................................................................. 26 

Prepared statement .......................................................................................... 5 

Crawford, Hon. Eric A. ‘‘Rick’’, a Representative in Congress from Arkansas, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 3 

Walz, Hon. Timothy J., a Representative in Congress from Minnesota, opening statement ........................................................................................................ 4 

WITNESSES

Willis, Brandon, Administrator, Risk Management Agency, U.S. Department 

of Agriculture, Washington, D.C. ........................................................................ 6 

Prepared statement .......................................................................................... 7 

Dolcini, J.D., Val, Administrator, Farm Service Agency, U.S. Department 

of Agriculture, Washington, D.C. ........................................................................ 9 

Prepared statement .......................................................................................... 11 

(1) 

IMPLEMENTING THE AGRICULTURAL ACT OF 

2014: COMMODITY POLICY AND CROP 

INSURANCE 

THURSDAY, MARCH 26, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON GENERAL FARM COMMODITIES AND RISK

MANAGEMENT, 

COMMITTEE ON AGRICULTURE, 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 9:02 a.m., in Room 

1300 of the Longworth House Office Building, Hon. Eric A. ‘‘Rick’’ 

Crawford [Chairman of the Subcommittee] presiding. 

Members present: Representatives Crawford, Lucas, Neugebauer, 

Gibbs, Austin Scott of Georgia, Denham, LaMalfa, Allen, Abraham, 

Conaway (ex officio), Walz, Graham, Ashford, and Kirkpatrick. 

Staff present: Bart Fischer, Callie McAdams, Jackie Barber, Jessica Carter, Matt Schertz, Mollie Wilken, Skylar Sowder, Ted 

Monoson, Faisal Siddiqui, John Konya, Anne Simmons, Mike 

Stranz, and Nicole Scott. 

OPENING STATEMENT OF HON. ERIC A. ‘‘RICK’’ CRAWFORD, A 

REPRESENTATIVE IN CONGRESS FROM ARKANSAS 

The CHAIRMAN. This hearing of the Subcommittee on General 

Farm Commodities and Risk Management, regarding the implementation of the Agricultural Act of 2014 as it relates to commodity policy and crop insurance, will come to order. 

I want to welcome our witnesses, Administrator Willis and Administrator Dolcini. Thank you for being here, gentlemen, and 

thank you for all of the good work that you have done so far in implementing the farm bill. 

By Tuesday of next week, most farmers across the country will 

have made the choices that we offered them under the farm bill. 

This will be the capstone on a long and challenging process that 

began here in 2010 before I was even elected, and did not wrap up 

until February 7, 2014, when the farm bill was finally signed into 

law. 

While the 2014 Farm Bill was drafted during a period of recordhigh prices, producers are now experiencing a staggering 43 percent drop in net farm income. Current conditions are going to test 

the farm bill and its ability to mitigate and respond to growing financial stress in farm country. I firmly believe that the situation 

calls for the farm bill to be implemented in the most farmer-friendly manner possible within the limits of the law. 

2 

The good news is that, despite some bumps along the way, both 

of you and your agencies have worked overtime to ensure that the 

provisions of the farm bill are implemented in the best way possible for the farmers and ranchers it was intended to serve. And 

we thank you for your hard work. However, some serious issues remain that we hope can still be avoided, and we believe you have 

the power to head them off. 

Each Member around this dais probably has an example of problems his or her constituents face that can be averted through proper implementation, and I have three that I hope we can solve together. 

First, USDA has the authority to address an issue that is impacting all cotton marketing, whether through cooperatives, private 

merchants, or direct farmer marketing. The situation threatens to 

seriously erode support for cotton farmers when that support is already threadbare and chronically low prices continue to pose an existential threat to farming cotton in the United States. In Arkansas 

alone, cotton acreage is expected to be down 40 percent this crop 

year after record low plantings in previous years, due, in part, to 

communist China and other countries propping up their own domestic production through rich subsidies and protections, the 

worldwide market has become artificially depressed, and this is 

harming American producers. And that is why report language was 

added to the Fiscal Year 2015 appropriations bill directing USDA 

to fix the problem. A legislative fix was unnecessary because the 

cost reduction options in permanent law already provide authority 

to correct the problem before it becomes even more serious. In this 

case, an ounce of prevention truly is worth a pound of cure. 

Second, is the proposed rule on actively engaged. The rulemaking 

required under the farm bill authorized USDA to consider establishing limits on the number of farm managers for various kinds 

of farming operations. I didn’t like the provision in the farm bill in 

the first place, but I took some comfort in the idea that the rule 

would be implemented in a flexible way, fully recognizing the variety of farming operations today, but limiting the number of managers on a farm to one, two, or a maximum of three managers is 

truly arbitrary and capricious, and ignores the remarkable diversity and complexity in agriculture today. 

Finally, I know that there is ongoing work to provide rice producers and others a margin coverage insurance policy. As you 

know, coverage levels and participation rates among rice producers 

have been very low compared to other crops because the irrigated 

nature of rice production prevents any yield variability. Margin 

coverage is meant to help address this problem. We also specifically 

listed rice in the crop insurance title of the farm bill as an underserved commodity to focus RMA’s attention on the risk management needs of rice producers. After years of low participation and 

recent news that basic revenue protection will not be available this 

year to rice producers, I hope you will do all you can to ensure that 

this new margin product works for rice producers, in particular. 

These three concerns that I register are not meant to take away 

from my compliments to both of you on your overall handling of implementation. I have been impressed by your work. Rather, I bring 

these issues to your attention to highlight their importance to me, 

3 

my constituents, and many of my colleagues. I hope we can work 

together to solve these problems before they become a lot worse. 

[The prepared statement of Mr. Crawford follows:] 

PREPARED STATEMENT OF HON. ERIC A. ‘‘RICK’’ CRAWFORD, A REPRESENTATIVE IN

CONGRESS FROM ARKANSAS

I want to welcome our witnesses, Administrator Willis and Administrator Dolcini. 

Thank you for being here, gentlemen, and thank you for all of the good work that 

you have done so far in implementing the farm bill. 

By Tuesday of next week, most farmers from across the country will have made 

the choices that we offered them under the farm bill. This will be the capstone on 

a long and challenging process that began here in 2010 before I was even elected 

and did not wrap up until February 7, 2014, when the farm bill was finally signed 

into law. 

While the 2014 Farm Bill was drafted during a period of record-high prices, producers are now experiencing a staggering 43 percent drop in net farm income. Current conditions are going to test the farm bill and its ability to mitigate and respond 

to growing financial stress in farm country. 

I firmly believe that the situation calls for the farm bill to be implemented in the 

most farmer-friendly manner possible within the limits of the law. 

The good news is that, despite some bumps along the way, both of you have 

worked overtime to ensure that the provisions of the farm bill are implemented in 

the best way possible for the farmers and ranchers it was intended to serve. And 

we thank you for your hard work. 

However, some serious issues remain that we hope can still be avoided, and we 

believe you have the power to head them off. 

Each Member around this dais probably has an example of problems his or her 

constituent’s face that can be averted through proper implementation. And I have 

three that I hope we can solve together. 

First, USDA has the authority to address an issue that is impacting all cotton 

marketing, whether through cooperatives, private merchants, or direct farmer marketing. The situation threatens to seriously erode support for cotton farmers when 

that support is already threadbare and chronically low prices continue to pose an 

existential threat to farming cotton in the United States. In Arkansas alone, cotton 

acreage is expected to be down 40 percent this crop year after record low plantings 

in previous years. Due, in part, to communist China and other countries that are 

propping up their own domestic production through rich subsidies and protections, 

the worldwide market has become artificially depressed and this is harming American producers. 

And that is why report language was added to the Fiscal Year 2015 appropriations bill directing USDA to fix the problem. A legislative fix was unnecessary because the cost reduction options in permanent law already provide authority to correct the problem before it becomes even more serious. An ounce of prevention is 

truly worth a pound of cure. 

Second, is the proposed rule on actively engaged. 

The rulemaking required under the farm bill authorized USDA to consider establishing limits on the number of farm managers for various kinds of farming operations. I did not like the provision in the farm bill in the first place, but I took some 

comfort in the idea that the rule would be implemented in a flexible way, fully recognizing the variety of farming operations today. But limiting the number of managers on a farm to one, two, or a maximum of three managers is truly arbitrary 

and capricious and ignores the remarkable diversity and complexity in agriculture 

today. 

Finally, I know that there is ongoing work to provide rice producers and others 

a margin coverage insurance policy. As you know, coverage levels and participation 

rates among rice producers have been very low compared to other crops because the 

irrigated nature of rice production prevents any yield variability. Margin coverage 

is meant to help address this problem. We also specifically listed rice in the crop 

insurance title of the farm bill as an under-served commodity to focus RMA’s attention on the risk management needs of rice producers. After years of low participation and recent news that basic revenue protection will not be available this year 

to rice producers—I hope you will do all you can to ensure that this new margin 

product works for rice producers, in particular. 

These three concerns that I register are not meant to take away from my compliments to both of you on your overall handling of implementation. I have been impressed by your work. Rather, I bring these issues to your attention to highlight 

4 

their importance to me, my constituents, and many of my colleagues. I hope we can 

work together to solve these problems before they become a lot worse. 

I would now like to recognize my friend and Ranking Member for any comments 

he would like to make. 

The CHAIRMAN.I would now like to recognize my friend and 

Ranking Member for any comments he would like to make. 

OPENING STATEMENT OF HON. TIMOTHY J. WALZ, A 

REPRESENTATIVE IN CONGRESS FROM MINNESOTA 

Mr. WALZ. Well, thank you, Chairman Crawford, and I would 

like to congratulate you on your chairmanship. We are certainly 

looking forward to working with you. You have a strong reputation 

of bipartisan problem solvers, so I am grateful to be working with 

you. I look forward to working with the rest of the Subcommittee 

here. 

I am very proud of the work we did on the farm bill. This Committee scrambled through and found a way to put together a farm 

bill that we are hearing in the early stages is working. The farm 

programs are now more needs-based, there are stronger links to 

conservation initiatives, and we found budget savings in the process. The farm bill was well worth the effort we went through, and 

it is these Members sitting here that worked with their constituents to make it happen. 

Now, it is our job to make sure we get it right. Implementation 

is the main focus. Getting the bill done, getting it through and getting it signed was one part. And the two of you have a big part 

to play in that. I know you have a lot on your plate, but I do want 

to say and echo the comments of my Chairman that the producers 

in southern Minnesota have very favorable comments, and I would 

like to pass along to both of you, and especially those rank and file 

FSA employees who have been out there working long hours. It is 

very much appreciated, and we are hearing that. 

There are just a few days left, and I am going to use this as my 

public service announcement, we have a few days left on ARC and 

PLC, so let us get those finalized. And mainly what I am hearing 

is it is tracking down landowners, and it is making sure people 

know that I am very grateful for a very complicated and important 

choice for farmers. They have resources in you, and in the truest 

sense, you have been partners, as it should be, of helping producers 

do what they do best; feed, clothe, and fuel the world. 

The farm bill paves the way for new crop insurance policies, and 

this one I am really looking forward to because we put an emphasis 

on some of our young and beginning farmers and ranchers, and I 

would like to hear a little bit about that today. I would also like 

to hear a little on conservation compliance. Farmers want to do 

more to maintain healthy soil, and if there is anything we can do, 

we should incentivize to do that. And I want to hear about some 

things, I have always sat up here and talked about things like 

cover crops and how we encourage that, and see if there are some 

of those things that are working. 

So as we begin this first Subcommittee hearing, I am hopeful we 

will hear about how the policies are working. Again, Chairman 

Crawford summed it up right; it is our job to find those things 

5 

what we can do better on, and get some feedback, and take that 

out and see if we can implement those. 

So, Mr. Chairman, thank you for holding this hearing, and I look 

forward to hearing from our witnesses. 

The CHAIRMAN. Thank you, Ranking Member, and I appreciate 

the opportunity to work with you again this year. 

I have time to recognize that Chairman Conaway, Chairman of 

the full Committee, rather, he is not here so I will defer and move 

on, and we will recognize him when he arrives. I just want to request that Members submit their opening statements for the record 

so witnesses may begin their testimony, to ensure there is ample 

time for questions. The chair would like to remind Members they 

will be recognized for questioning in order of seniority, for Members who were present at the start of the hearing, after that, Members will be recognized in order of their arrival. I appreciate Members’ understanding. 

[The prepared statement of Mr. Conaway follows:] 

PREPARED STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE IN

CONGRESS FROM TEXAS

Mr. Chairman, thank you for holding this important hearing. 

As you know, I chaired this Subcommittee for a number of years, and I cannot 

think of a better successor than you. I know you care deeply about the policies 

under the jurisdiction of this Subcommittee and the farmers and ranchers that 

these policies are designed to serve. 

I mainly want to echo the Chairman’s statement. Administrator Willis and Administrator Dolcini deserve our thanks for all of the good work that they have done 

so far. 

Former Administrator Juan Garcia, a fellow Texan and a friend, is also owed a 

debt of gratitude for all of his years of distinguished service and for the heavy lifting 

he did early on to get farm bill implementation off on the right track. 

There are, as the Chairman said, some issues that still present serious challenges 

as farm bill implementation moves forward. Fortunately, there is still time to make 

sure that these little challenges do not have time to become big ones. 

I fully concur with the three issues the Chairman stressed in his opening remarks 

and I add a couple of others to the list. 

First, as Chairman Emeritus Frank D. Lucas remarked during an earlier hearing, 

we need to address the cover crop issue. If you want producers to plant a cover crop 

as good stewards of the land, this is one of the most important ways of accomplishing that objective. It will also help deal with some of the more difficult circumstances facing producers in my part of the country. 

I recognize that this may involve the agency changing course from some of its past 

decisions. But those past decisions were based on a completely decoupled commodity 

title. The circumstances have changed some. The farm bill gave you discretion here 

and I would hope that you would use that discretion to make this happen. It is the 

right thing to do. 

Second, just as encouraging the use of cover crops is a smart move if you want 

to promote conservation, so is not sending artificial signals to producers to plant one 

crop over another, especially when agronomic and market conditions would send the 

opposite signals. We face that possibility right now where USDA could assign yields 

for crops in counties that are, frankly, totally out of whack with reality. I have discussed this issue at length with USDA and believe you want to do the right thing 

here. I just want to offer some extra encouragement. 

Thanks again to our witnesses for their good work so far. I hope you will work 

with us on these and other issues. With that, Mr. Chairman, I look forward to a 

productive hearing. 

The CHAIRMAN. Witnesses are reminded to limit their oral presentations to 5 minutes. All written statements will be included in 

the record. 

With that, I am pleased to recognize Mr. Brandon Willis, Administrator of the Risk Management Agency, United States DepartVerDate Mar 15 2010 13:09 Jul 13, 2015 Jkt 041481 PO 00000 Frm 00009 Fmt 6633 Sfmt 6601 P:\DOCS\114-09\93969.TXT BRIAN
6 

ment of Agriculture in Washington, D.C. Mr. Willis, you are recognized for 5 minutes. 

STATEMENT OF BRANDON WILLIS, ADMINISTRATOR, RISK 

MANAGEMENT AGENCY, U.S. DEPARTMENT OF 

AGRICULTURE, WASHINGTON, D.C. 

Mr. WILLIS. Thank you very much. Chairman Crawford, Ranking 

Member Walz, and Members of the Subcommittee, I am pleased to 

discuss the Risk Management Agency’s implementation of the 2014 

Farm Bill. 

I am pleased to report we have accomplished implementation of 

almost every crop insurance provision. I would like to express my 

gratitude for the hard work performed by the employees of the Risk 

Management Agency. To have the vast majority of this farm bill 

available to farmers less than a year after passage speaks to the 

professionalism and dedication of these employees. I would also 

like to thank our partners who deliver the crop insurance program, 

the approved insurance providers. They have provided valuable 

input throughout the process that has led to an improved implementation, and their efforts throughout the process are appreciated. 

While there is work to be done, farmers and ranchers are beginning to utilize some of these new crop insurance programs and options. The Supplemental Coverage Option, SCO, and Stacked Income Protection Plan for Cotton, STAX, were made available for 

the 2015 crop year. SCO is available for corn, cotton, cottonseed, 

grain sorghum, rice, soybeans, spring barley, spring wheat, and 

winter wheat in selected counties for the 2015 crop year, representing over 80 percent of the acres covered in the crop insurance 

program. RMA is looking to expand SCO to additional crops and 

additional counties next year. 

The new STAX program for cotton producers is currently available for every county that had a crop insurance policy for cotton, 

representing 98 percent of the cotton acres in the United States. 

RMA released the APH yield exclusion insurance product for 11 

spring crops, nearly 3⁄4 of all the acres and liability within the crop 

insurance program. We expect to expand the crops that are eligible 

for this provision next year as well. 

Coverage Level by Practice and Enterprise Unit by Practice were 

available to farmers for the 2015 crop year, beginning with springplanted crops. These new programs provide a farmer that produces 

a crop on both dryland and irrigated land the option to elect a different coverage level for each production practice or by enterprise 

unit. Coverage Level by Practice is now available for 36 crops. Enterprise Unit by Practice is available for 14 crops. 

The Peanut Revenue Policy, which allows peanut farmers to 

cover their revenue, is now available. This policy was approved by 

the Federal Crop Insurance Corporation Board of Directors less 

than a year after passage of the farm bill. 

The beginning farmers and ranchers incentives were made available to farmers and ranchers beginning last fall. These provisions 

make crop insurance more affordable for beginning farmers and 

ranchers by providing a ten percentage point reduction in preVerDate Mar 15 2010 13:09 Jul 13, 2015 Jkt 041481 PO 00000 Frm 00010 Fmt 6633 Sfmt 6601 P:\DOCS\114-09\93969.TXT BRIAN
7 

mium, as well as a waiver of the catastrophic fees and additional 

administrative fees. 

The farm bill required RMA to offer a product to cover diversified 

farms. RMA developed the Whole Farm Revenue Protection program, and the Federal Crop Insurance Board of Directors approved 

that last year. As a result, the whole farm program is now available in 45 states. To date, this option has been generally well accepted around the country. 

RMA is also making progress on offering organic price selections 

for all crops as required in the 2014 Farm Bill. RMA has eliminated the organic surcharge, added price selections for over 20 

crops, and created a contract price addendum, which is available 

for 62 crops. Last year, nearly ten percent of the organic policies 

utilized the contract price addendum in its first year. Overall, these 

changes have resulted in nearly a ten percent increase in the number of organic acres covered by crop insurance. 

In an effort to ensure that producers continue to receive the crop 

insurance premium subsidy, RMA, with our sister agencies NRCS 

and Farm Service Agency, have been working to develop comprehensive guidelines for farmers so it will be easier for them to 

comply with USDA conservation compliance requirements. The 

three agencies work together to provide information to respective 

field offices, and develop material for all three agencies to inform 

customers of the new guidelines. Outreach efforts will continue this 

spring. 

Crop insurance benefits producers and rural economies. It benefits those outside of rural economies by supporting a reliable and 

dependable food supply system. It provides a safety net that allows 

farmers access to credit, who may not be able to obtain credit otherwise. It protects farmers’ bottom lines in a very volatile environment, but perhaps just as important, it provides peace of mind to 

producers who entire life’s work, or perhaps the work of generations, will not be undone by one unfortunate weather event. 

While the Federal Crop Insurance Program was already providing a strong safety net for producers, this farm bill made significant improvements that have been well received by America’s farmers and ranchers. 

I again thank you for inviting us here today, and I look forward 

to working with you. Mr. Chairman, I will be pleased to answer 

any questions that you or other Members of the Subcommittee may 

have. 

[The prepared statement of Mr. Willis follows:] 

PREPARED STATEMENT OF BRANDON WILLIS, ADMINISTRATOR, RISK MANAGEMENT

AGENCY, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C. 

Chairman Crawford, Ranking Member Walz, and Members of the Subcommittee, 

I am pleased to discuss the Risk Management Agency’s implementation of the Agricultural Act of 2014 (the 2014 Farm Bill). As the Agency moves forward with implementation of the 2014 Farm Bill provisions, I am pleased to report to this Subcommittee that we have accomplished implementation of almost every crop insurance provision in the 2014 Farm Bill. 

I would like to express my gratitude for the hard work performed by the employees of the Risk Management Agency and their great efforts in implementing the 

2014 Farm Bill. Throughout all of the efforts of implementation, the regular business of the RMA was conducted as expected. Total program costs for the 2014 crop 

year, including premium subsidy and delivery expense reimbursement, will be apVerDate Mar 15 2010 13:09 Jul 13, 2015 Jkt 041481 PO 00000 Frm 00011 Fmt 6633 Sfmt 6621 P:\DOCS\114-09\93969.TXT BRIAN
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proximately $9 billion. Through the combined efforts of the agency and our private 

industry partners, appraisals and claims adjustments were made in a timely manner, indemnities were promptly paid, all while implementing new provisions of the 

2014 Farm Bill. 

Implementation of the 2014 Farm Bill 

After just over 1 year since the passage of the 2014 Farm Bill, RMA has implemented almost all of the crop insurance provisions. From implementing the Actual 

Production History (APH) Yield Exclusion ahead of schedule to offering Whole Farm 

Revenue Protection for diversified farms, I am proud of the accomplishments RMA 

has achieved over the past year. While there is work to be completed, farmers and 

ranchers are now beginning to take advantage of the new crop insurance options. 

The Supplemental Coverage Option (SCO) and Stacked Income Protection Plan for 

Upland Cotton (STAX) were made available for the 2015 crop year. SCO is available 

for corn, cotton, cottonseed, grain sorghum, rice, soybeans, spring barley, spring 

wheat, and winter wheat in selected counties for the 2015 crop year—representing 

over 80 percent of the acres covered in the Federal crop insurance program. RMA 

is looking to expand SCO to additional crops and counties for the 2016 crop year. 

STAX is currently available for every county that had a crop insurance policy for 

cotton, representing 98 percent of cotton acres in the United States. RMA is looking 

to expand STAX to remaining cotton producing counties in the future. 

One of the items we thought would not be accomplished for the 2015 crop year 

is the APH Yield Exclusion. However, RMA was able to develop and release the Actual Production History Yield Exclusion insurance product for 11 crops ahead of 

schedule. As a result, nearly 3⁄4 of all acres and liability in the Federal Crop Insurance Program will be covered under this new option for the 2015 crop year. I am 

especially grateful for the diligence of the employees of the Risk Management Agency for their hard work in implementing this farm bill and especially grateful that 

this program was partially implemented this crop year. We expect to expand the 

crops eligible for the 2016 crop year. 

I am also pleased to report that Coverage Level by Practice and Enterprise Unit 

by Practice were developed and made available to farmers for the 2015 crop year, 

beginning with spring planted crops. These new programs provide a farmer that 

produces a crop on both dry land and irrigated land the option to elect a different 

coverage level for each production practice or by enterprise unit. Coverage Level by 

Practice is now available for 36 crops. Enterprise Unit by Practice is now available 

for 14 crops. These options will provide producers more options to tailor crop insurance for their specific needs. 

Yet another program implementation is the Peanut Revenue Policy, which allows 

peanut farmers to cover their revenue. This policy was approved by the Federal 

Crop Insurance Corporation Board of Directors less than a year after the 2014 Farm 

Bill became law. Peanut farmers will now have the ability to manage risk for both 

yield and revenue losses. 

The beginning farmers and ranchers incentives authorized in the 2014 Farm Bill 

were made available to farmers and ranchers for fall planted wheat in 2014. These 

provisions make crop insurance more affordable for beginning farmers and ranchers 

by providing a ten percent premium discount, as well as a waiver of the catastrophic 

and additional coverage administrative fees. In addition, these changes improve crop 

insurance for beginning farmers by allowing, in certain instances, production history 

from previous operations to be used, which provides beginning farmers and ranchers 

greater risk protection. 

The 2014 Farm Bill required RMA to offer a product to cover diversified farms. 

Prior to the passage of the 2014 Farm Bill, RMA had already begun development 

of the Whole Farm Revenue Protection policy and the Federal Crop Insurance Corporation Board of Directors approved the policy shortly after the 2014 Farm Bill became law. As a result, Whole Farm Revenue Protection is available for purchase for 

the 2015 crop year. To date, this option has been generally well received when presented to specialty crop and organic growers around the country. 

Whole Farm is well-suited for highly diverse farms and farms with specialty or 

organic commodities and provides for all farm revenue to be covered under one policy. It also allows for other Federal crop insurance policies to be purchased covering 

individual commodities of significant importance to the operation. Premium subsidy 

is available and depending on farm diversification, farms with two or more commodities, may receive a whole farm premium subsidy similar to other revenue plans of 

insurance. 

RMA is also making progress on offering organic price election for all crops, as 

required in the 2014 Farm Bill. Since 2010, RMA has eliminated the organic surcharge, added price elections for over 20 crops, and created the contract price addenVerDate Mar 15 2010 13:09 Jul 13, 2015 Jkt 041481 PO 00000 Frm 00012 Fmt 6633 Sfmt 6621 P:\DOCS\114-09\93969.TXT BRIAN
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dum, which is available for 62 crops. Last year nearly ten percent of the organic 

policies utilized the price addendum in its first year. Overall, these changes resulted 

in nearly a ten percent increase in organic acreage covered by crop insurance. RMA 

staff and I have attended numerous farmer meetings and conferences to highlight 

the increased options for organic and specialty crop growers. In 2016 we will continue to aggressively increase the number of organic crops with price elections. 

The 2014 Farm Bill linked the ability of a producer to receive a crop insurance 

premium subsidy to USDA highly erodible land (HEL) and wetland conservation 

(WC) compliance. For FSA and NRCS program participants, the rules regarding filing form AD–1026 have not changed. Producers who are participants in FSA’s programs or NRCS’s conservation programs, who already have an AD–1026 on file do 

not need to file a new form unless there are changes to the operation or new activities that occur that affect the person’s certification. 

In an effort to ensure that producers continue to receive the crop insurance premium subsidy, RMA worked with our sister agencies, the Natural Resource Conservation Service (NRCS) and the Farm Service Agency (FSA), to develop comprehensive guidelines for farmers so it will be easier for them to comply with USDA 

conservation requirements. The three agencies worked together to get information 

out to the respective field offices and develop material for all three agencies to inform our customers of the new guidelines. Outreach efforts will continue well into 

this spring. 

Every one of the aforementioned farm bill items was completed less than 1 year 

after the passage of the 2014 Farm Bill and in time for each respective planting 

season because of the outstanding farm bill implementation work performed by employees of RMA. 

Conclusion 

I am pleased to report the progress RMA has made in implementing the 2014 

Farm Bill. These farm bill changes have been well received by America’s agricultural producers. Once the bill was signed into law, the Agency was determined to 

implement the provisions as promptly as possible to ensure that America’s farmers 

and ranchers could benefit from the new risk management options. Crop insurance 

benefits producers and the surrounding rural economies to maintain their local economic infrastructure and helps to provide a reliable and abundant food supply. 

Including the 2014 Farm Bill changes to safety net programs, the Federal Crop 

Insurance Program provides a $9 billion safety net to producers through taxpayer 

supported investments. Again, thank you for inviting us here today and I look forward to working with you. 

Mr. Chairman, I would be pleased to answer any questions that you and other 

Members of the Subcommittee may have. Thank you. 

The CHAIRMAN. Thank you, Administrator Willis. 

I am pleased to recognize our second witness today, Mr. Val 

Dolcini, Administrator, Farm Service Agency, U.S. Department of 

Agriculture. Mr. Dolcini, you are recognized for 5 minutes. 

STATEMENT OF VAL DOLCINI, J.D., ADMINISTRATOR, FARM 

SERVICE AGENCY, U.S. DEPARTMENT OF AGRICULTURE, 

WASHINGTON, D.C. 

Mr. DOLCINI. Thank you, Mr. Chairman, and Members of the 

Subcommittee. I appreciate this opportunity to provide information 

on the Farm Service Agency’s implementation of the 2014 Farm 

Bill. 

We have implemented the farm bill programs in record time, providing safety net assistance to producers in every state within just 

a few months of the bill’s passage. FSA’s 10,000+ employees, pardon me, and over 2,000 local offices are working long hours to provide the most effective customer service possible to producers as we 

finalize the push to enroll producers in the new title I crop safety 

net programs. 

FSA focused its efforts early last spring on implementing the 

Livestock and Tree Disaster Assistance Programs. These programs, 

which had been expired for nearly 3 years, were resumed approxiVerDate Mar 15 2010 13:09 Jul 13, 2015 Jkt 041481 PO 00000 Frm 00013 Fmt 6633 Sfmt 6601 P:\DOCS\114-09\93969.TXT BRIAN
10 

mately 60 days following enactment of the farm bill; 80 percent 

faster than in 2008. This assistance benefited a diverse array of 

producers who were hit hard by natural disasters, ranging from 

wildfire to drought. And FSA continues to process payments for 

2012 through 2014 disaster programs, including the Livestock Forage Program, the Livestock Indemnity Program, the Emergency 

Assistance for Livestock, Honeybees and Farm-raised Fish, and 

Tree Assistance Programs. So far, FSA has issued approximately 

600,000 payments to producers since last spring, totaling nearly $5 

billion. 

The LFP program has accounted for the bulk of these payments, 

particularly to producers in the Plains States, but also for producers across the country who have suffered from extreme weather 

conditions. LIP payments are helping producers who incurred livestock deaths, such as those affected by the Atlas Blizzard that hit 

the Northern Plains in 2013. TAP payments are helping producers 

in Florida who are suffering from citrus greening, as well as orchard producers in other states across the country. And ELAP payments are helping many producers who do not benefit from other 

livestock disaster programs, including beekeepers suffering from 

colony collapse disorder. 

The 2014 Farm Bill made significant changes to FSA’s safety net 

programs. The DCP and acre programs were repealed and replaced 

by two new programs, the Price Loss Coverage and Agricultural 

Risk Coverage programs. Participation in the base reallocation, 

yield updating, and election processes is rapidly progressing. The 

rate at which producers have made their elections at local county 

offices has jumped by eight to ten percent per week, and as of 

March 19, about 94 percent of farms likely to enroll in ARC and 

PLC, that is, those farms that enrolled in the DCP program, have 

made their base reallocation decisions, and about 77 percent of 

farms likely to enroll have made their election. We expect that 

these numbers will continue to increase significantly by the end of 

the month, and all producers who have contacted their local offices 

to file their ARC and PLC paperwork by the deadline will be allowed to enroll for ARC/PLC for the 2014 crop year. 

Implementing a farm bill requires an all-hands-on-deck approach 

to reach producers, and much of this success is the result of close 

collaboration between our university and extension partners, and of 

course, the dedicated men and women of the Farm Service Agency. 

We worked closely with the university partners at Texas A&M, the 

Food and Agricultural Policy Research Institute, the University of 

Illinois, and others who developed online, web-based decision tools 

so that farmers could input their data and explore various scenarios associated with adopting either ARC or PLC for their individual operations. Furthermore, we worked, and are continuing to 

work, with extension specialists in virtually every state on extensive ARC and PLC education and outreach efforts. As of midMarch, over 400,000 attendees have participated in approximately 

5,700 local events, providing producers with an opportunity to 

think about how to best manage risk on their farms. The ARC and 

PLC webtools were demonstrated at over 2,500 of these events, and 

the tool developers are hosting helpdesk hotlines for producers who 

are in need of additional help. 

11 

In addition to collaboration with these partners, we have had extensive interaction with the media, and appreciate our partners in 

the ag media. FSA is making a final push to reach all landowners 

and producers who have a stake in these decisions. Early in this 

calendar year, we mailed nearly three million postcards to landowners and producers as a reminder about the upcoming deadlines, 

and stated that for those who didn’t elect between ARC or PLC, 

they would default into PLC and would lose 2014 program benefits. 

We mailed another two million postcards in mid-March to owners, 

operators and other producers who had linked at least one farm 

that had not made an election. And our county office staff, as you 

well know, is geared up and ready to greet these producers and 

help make their decisions in the final days. 

Under the 2014 Farm Bill, upland cotton is no longer a covered 

commodity and is not eligible to participate in ARC and PLC, rather, it is eligible for the new STAX program offered by my sister 

agency, RMA. FSA has also implemented the new Margin Protection Program for Dairy, and over 23,000 dairy producers, that is 1⁄2

of all U.S. dairy operations, have enrolled for calendar year 2015 

coverage. MPP offers dairy producers catastrophic coverage at no 

cost, with a $100 administrative fee and then various levels of buyup coverage. The Noninsured Crop Disaster Assistance Program, 

NAP, was also expanded in the 2014 Farm Bill to include protection at higher coverage levels similar to provisions offered under 

the Federal Crop Insurance Program. NAP continues to offer coverage at the catastrophic level based on 50 percent of expected production, at 55 percent of the average market price. Now though, 

producers can buy up to 65 percent of the expected production in 

five percent increments at 100 percent of the average market price. 

The majority of 2015 NAP-eligible spring seeded crops had an application period that closed earlier this month. 

The CHAIRMAN. Administrator Dolcini, forgive me, but we are up 

against a hard vote, and I want to make sure we give our Members 

an opportunity to ask some questions, so I appreciate your indulgence here and we will submit the balance of your testimony for 

the record. 

Mr. DOLCINI. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Dolcini follows:] 

PREPARED STATEMENT OF VAL DOLCINI, J.D., ADMINISTRATOR, FARM SERVICE

AGENCY, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C. 

Mr. Chairman and Members of the Subcommittee, I appreciate this opportunity 

to provide information on the Farm Service Agency’s (FSA’s) implementation of the 

Agricultural Act of 2014 (the 2014 Farm Bill). We have implemented the farm bill 

programs in record time, providing safety net assistance to producers in every state 

within just a few months of bill passage. FSA’s 10,000+ employees at over 2,000 

local offices are working long hours to provide the most effective customer service 

possible to producers as we finalize the push to enroll producers in the new Title 

I crop safety net programs. 

Disaster Assistance 

FSA focused early last spring on implementing the livestock and tree disaster assistance programs. These programs, which had been expired for nearly 3 years, were 

resumed in approximately 60 days following enactment of the 2014 Farm Bill—80 

percent faster than in 2008. This assistance benefited a diverse array of producers 

who were hit hard by natural disasters, ranging from wildfire to drought. FSA continues to process payments for 2012 through 2014 disaster programs—including the 

12 

Livestock Forage Disaster Program (LFP); the Livestock Indemnity Program (LIP); 

the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP); and the Tree Assistance Program (TAP). So far, FSA has issued approximately 600,000 payments to producers since last spring, totaling nearly $5 billion. 

The LFP program has accounted for the bulk of these payments, particularly to 

producers in the Plains States, but also across the country, who have suffered from 

extreme weather conditions. LIP payments are helping producers who incurred livestock deaths, such as those affected by the Atlas Blizzard that hit the northern 

Plains in 2013. TAP payments are helping producers in Florida who are suffering 

from citrus greening disease, as well as orchard producers in other states across the 

country. ELAP payments are helping many producers who do not benefit from the 

other livestock disaster programs, including bee keepers who are suffering from colony collapse disorder. 

ARC/PLC 

The 2014 Farm Bill made significant changes to FSA’s safety net programs. The 

2008 Farm Bill’s Direct and Counter-Cyclical Program (DCP) and the Average Crop 

Revenue Election (ACRE) program were repealed and replaced by two new programs: Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC). The window for farmers to take advantage of the one-time opportunity to reallocate a farm’s 

base acres and to update payment yields will close on March 31. March 31 also is 

the deadline to elect ARC or PLC coverage for their farms. 

Participation in the base reallocation, yield updating, and ARC/PLC election processes is rapidly progressing. The rate at which producers have made their election 

at their local county offices has jumped by 8–10 percent (or more) per week. As of 

March 19, about 94 percent of farms likely to enroll in ARC/PLC (e.g., those who 

had a DCP/ACRE contract) have made their base reallocation and yield updating 

decisions, and about 77 percent of farms likely to enroll have made their election. 

We expect these numbers to continue to increase significantly by the end of the 

month. All producers who have contacted their local offices to file their ARC/PLC 

paperwork by March 31 will be allowed to enroll for ARC/PLC for the 2014 crop 

year. 

Implementing a farm bill requires an ‘‘all hands on deck’’ approach to reach producers, and much of this success is the result of close collaboration between our university and extension partners and, of course, our dedicated FSA staff. We worked 

closely with our university partners at Texas A&M, the Food and Agricultural Policy Research Institute, the University of Illinois, and others, who developed on-line 

web-based decision tools so that farmers can input data and explore various scenarios associated with adopting ARC or PLC for their individual operations. 

Further, we worked—and are continuing to work—with extension specialists in 

virtually every state on an extensive ARC/PLC education and outreach effort. As of 

mid-March, over 400,000 attendees have participated in approximately 5,700 local 

ARC/PLC informational events that provide producers with the substance to think 

about how to best manage risk on their farms. The ARC/PLC webtools were demonstrated at over 2,500 of these events and the tool developers are hosting help desk 

‘‘hotlines’’ for producers who are in need of additional help. 

In addition to collaboration with our partners, we have had extensive interaction 

through the media. FSA has issued eight national news releases informing producers and the general public about ARC/PLC resources and deadlines, and I have 

personally conducted over 100 media interviews regarding these new programs. 

Over 700 ARC/PLC news stories have appeared in the media as of Friday, March 

20. 

FSA is making a final push to reach all landowners and producers who have a 

stake in the ARC/PLC decision. Early in the calendar year, we mailed 2.9 million 

postcards to landowners and producers as a reminder about base reallocation and 

yield updating deadlines, and stated that producers who do not elect ARC or PLC 

are not eligible for 2014 crop year ARC or PLC payments. The only option for producers who do not elect is to be enrolled in PLC for the 2015–18 crop years. Another 

2.2 million postcards were mailed starting on March 16 to owners, operators, and 

other producers linked to at least one farm that had not yet made an election. Our 

county office staff is geared up and ready to greet these producers and help them 

to make their decisions in the final days of March. 

Under the 2014 Farm Bill, upland cotton is no longer a covered commodity and 

is not eligible to participate in ARC or PLC, but rather, is eligible for the new 

Stacked Income Protection Plan (STAX) offered by the Risk Management Agency 

(RMA). Until STAX becomes available in a county, upland cotton is eligible for the 

Cotton Transition Assistance Payments program (CTAP) for 2014 and 2015 crops. 

13 

FSA has paid about $540 million to over 184,000 farms for 2014 CTAP payments; 

2015 CTAP payments will drop off dramatically in 2015 as STAX becomes available. 

Dairy, NAP, CRP 

FSA has implemented the new Margin Protection Program for Dairy (MPP-Dairy) 

and over 23,000 producers—over 1⁄2 of all U.S. dairy operations—have enrolled for 

calendar year 2015 coverage. The new MPP-Dairy offers dairy producers: (1) catastrophic coverage, at no cost to the producer after an annual $100 administrative 

fee; and (2) various levels of higher coverage. Catastrophic coverage provides payments to participating producers when the national dairy production margin is less 

than $4 per hundredweight (cwt). Producers may purchase higher coverage, for a 

premium, that provides payments when margins are between $4 and $8 per cwt. 

During the 3 months of enrollment, FSA held more than 500 public meetings, sent 

out nearly 60,000 direct mailings, and conducted more than 400 demonstrations of 

the web-based MPP-Dairy tool designed to help applicants calculate their specific 

coverage needs. 

The Noninsured Crop Disaster Assistance Program (NAP) was also expanded in 

the 2014 Farm Bill to include protection at higher coverage levels, similar to provisions offered under the Federal crop insurance program. NAP continues to offer coverage at the catastrophic level based on 50 percent of expected production at 55 percent of the average market price for the crop. Now, producers can obtain additional 

coverage levels ranging from 50 to 65 percent of expected production, in five percent 

increments, at 100 percent of the average market price for the 2014–18 crops years. 

The majority of 2015 NAP-eligible spring-seeded crops had an application closing 

date of March 15, 2015. 

The 2014 Farm Bill also included retroactive NAP assistance for losses to 2012 

fruit crops grown on trees and bushes that had Secretarial disaster designations for 

frost or freeze. To date, FSA has made 635 payments totaling over $13.3 million for 

NAP frost/freeze. 

In addition to the ARC/PLC tools noted earlier, the University of Illinois and their 

partners developed decision tools for both MPP-Dairy and NAP. These tools help 

producers make decisions about the optimal level of coverage for their operations, 

and have been widely accessed by producers. Further, nearly 14,000 producers have 

participated in MPP-dairy educational meetings and nearly 17,000 producers have 

participated in NAP meetings. 

Currently, 24.3 million acres are enrolled in Conservation Reserve Program (CRP) 

contracts, including 18.2 million acres in general enrollment authority and 6.1 million acres in continuous enrollment authority. CRP contracts on 1.9 million acres 

are set to expire September 30, 2015. With the enactment of the 2014 Farm Bill, 

the number of acres available nationwide for enrollment was reduced to 24 million 

acres starting in 2017; as a result, we expect general enrollments to become much 

more competitive in the future, increasing the environmental benefits per acre. We 

will also continue to pursue continuous enrollments to target the most environmentally-sensitive acreage. 

Credit 

Almost all farm loan programs are authorized permanently through the Consolidated Farm and Rural Development Act. However, the 2014 Farm Bill makes several program changes and enhancements, provides some additional authorities, and 

reauthorizes the Mediation Program and the Individual Development Account (IDA) 

grant pilot program, which supports a savings incentive program for low-income beginning farmers. Several of the changes are mandatory and were implemented by 

FSA in March of 2014. These changes provide more favorable interest rates for joint 

financing arrangements, provide a larger percent guarantee on guaranteed conservation loans, increase the loan limits for the down payment loan program from 

$225,000 to $300,000, make youth loans available in urban areas, and eliminate the 

term limits for guaranteed operating loans. 

On November 7, 2014, FSA implemented additional mandatory changes for farm 

loans, including raising the borrowing limit of its popular microloan program from 

$35,000 to $50,000, and updating the ‘‘farming experience’’ loan eligibility requirement to include military leadership positions, advanced agricultural education, or 

other non-farm management experience. This has already assisted 1,600 farmers by 

expanding the credit available for their family farming businesses. FSA also received authority to implement a relending program to help Native American producers purchase fractionated interests of land; this program is under development. 

Improving Efficiency 

The ability to meet FSA’s program delivery goals depends on information technology systems and services critical to our daily operations. To improve customer 

14 

service, FSA is moving forward with improvements such as simplifying the printing 

of farm maps and customized reports, and continuing the integration of systems 

through common eligibility, payment, and obligation frameworks. These efforts will 

reduce the need for FSA staff to use multiple systems or perform redundant data 

entry, helping customers to make fewer—or significantly shorter—visits to their 

local offices. 

With continued attention to business processes and IT integration, FSA can focus 

on improving customer application processes; streamlining program delivery; providing additional customer technical assistance; sharing data needed for eligibility 

determination; improving the timeliness and accuracy of loans, payments, and program compliance; and, providing new customer self-service options. FSA’s continued 

efforts to streamline, modernize, and automate the delivery of farm programs and 

agricultural systems met two significant milestones this year with the releases of 

MIDAS Farm Records and Business Partner. MIDAS now combines producer and 

land information with Geographic Information System (GIS) data, reducing duplicative data when farmers and ranchers conduct business at any FSA County office. 

The newest business process improvement includes automatic validation of address 

and tax information at the time of entry, which further reduces improper payments 

and improves record accuracy. 

For FY 2016 and beyond, FSA has placed additional emphasis and resources on 

ensuring that IT investments, decisions, and operational plans are driven by business needs across the agency and are manageable in size. We look forward to enabling new customer models that support FSA as it becomes the gateway for farmers 

and ranchers to access rural and agricultural support services. 

Reaching Beginning and Under-Served Producers 

One of the most important facets of our Agency’s implementation of the farm bill 

is service to beginning and under-served farmers and ranchers. FSA is often ‘‘the 

lender of first opportunity’’ for many new and beginning producers. In addition, we 

have successfully implemented new provisions of the farm bill such as the NAP 50 

percent premium discount and waiver of the NAP application fee for beginning, limited resource, and traditionally under-served farmers. We are working in unique 

new ways to help these producers automatically sign up for the basic NAP coverage 

and telling them about the 50 percent premium discount through a coordinated approach between Farm Loan Programs and Farm Programs staff. 

FSA’s microloan program is also an important access point to credit for some new 

farmers and ranchers. The 2014 Farm Bill expanded lending opportunities for thousands of farmers and ranchers to begin and continue operations, including greater 

flexibility in determining eligibility, raising loan limits, and emphasizing beginning 

and socially disadvantaged producers. Since implementation of the popular 

microloan program, FSA has helped over 11,000 small, under-served, and beginning 

farmers obtain operating credit. Producers can use microloan funds to pay for initial 

start-up expenses such as land rent, essential tools, livestock and farm equipment, 

and annual expenses such as seed, fertilizer, utilities, marketing, and distribution 

expenses. 

We are implementing other provisions of the farm bill that help these producers, 

including reinstating the Reimbursement Transportation Cost Payment Program for 

Geographically Disadvantaged Farmers and Ranchers (RTCP) and the Transitions 

Incentive Program, which provides funding to encourage the transition of CRP land 

from a retired or retiring owner or operator to a beginning or socially disadvantaged 

farmer or rancher to return land to production for sustainable grazing or crop production. 

These important policy advancements are part of a larger effort at the Department to enhance assistance to new and beginning farmers and ranchers. In our FY 

2016 budget request, FSA has proposed the creation of new and beginning farmer 

and rancher field positions and additional cooperative agreement funding to help 

support enhanced financial literacy technical assistance and partnerships. These 

staff would facilitate and guide beginning farmer outreach, provide support and 

cross-cutting customer service training for USDA employees in the field, and enhance partnerships within regional, state, and local communities—and additional 

cooperative agreement funding to help support enhanced financial literacy technical 

assistance and partnerships. 

Our participation in complementary initiatives such as Know Your Farmer, Know 

Your Food and Bridges to Opportunity further enhances our service to beginning 

and under-served producers, by helping us coordinate programs across the Department. In the process, we also find new opportunities for needed program enhancements such as expansion of cold storage funding under the Farm Storage Facility 

Loan Program. 

15 

Serving beginning and under-served farmers and ranchers well is core to our 

Agency mission and the future of agriculture. 

Mr. Chairman, this concludes my statement. I will be happy to answer your questions and those of the other Subcommittee Members. 

The CHAIRMAN. I apologize for cutting you off there, but we want 

to get going so we can get this done before we are called to vote. 

Administrators, thank you so much for being here, and again, I 

appreciate your indulgence on your time constraint. 

Administrator Dolcini, as I said in my opening statement, I believe the limit you placed on managers in the actively engaged rule 

is arbitrary. In fact, it seems like the rulemaking might have been 

hijacked away from people like you who understand this country’s 

diversity of ag production, and written by folks who really don’t 

know anything about it. In my opinion, the rule should allow for 

as many managers as justified by the operation’s needs. 

Can you tell me if there was input on this rule from people outside of USDA, and how that input might have changed its course? 

Mr. DOLCINI. Well, Mr. Chairman, thank you for the opportunity 

to answer that question. As you know, obviously, we proposed a 

rule earlier this week that addresses, for the first time since 1987, 

a definition of actively engaged within the confines of the statute, 

the 2014 Farm Bill. We believe that it is a good start, and over the 

next 60 days look forward to a lot of interaction from the public 

and others who are going to be impacted by this rule. 

It addresses for the first time the actively engaged definition, and 

we have included for the first time hours associated with being actively involved in the farming operation. It is either 500 hours or 

25 percent of the time that it would take to manage that farming 

operation. We have allowed an additional pay limit if the operation 

is large or complex. And we have defined large as 2,500 acres or 

more. Complexity decisions will be made by the state committee in 

conjunction with the FSA headquarters staff here. We have allowed 

a third pay limit for operations that are both large and complex. 

So the default limit is one pay limit, and then there are two additional pay limits. 

We think this is a good start. It is a strong rule. We operated 

within the confines of what the 2014 Farm Bill gave us, and we 

look forward to receiving comments over the next couple of months. 

The CHAIRMAN. Thank you, sir. 

Administrator Willis, I also made reference to this in my opening 

statement, the farm bill provided RMA with additional flexibility to 

develop products for crops that traditionally faced low coverage levels, particularly rice. My constituents are eager for margin coverage to become available for the next crop year, but I have some 

concerns regarding how RMA is pursuing these policies. 

I believe you should be developing a rice-specific policy, as rice 

inputs are much different than other commodities because it requires higher levels of fertilizer and diesel fuel, however, we have 

heard you have been pursuing a one-size-fits-all margin product. 

Can you tell me what you are doing to ensure that rice will get the 

adequate coverage it needs and deserves? 

Mr. WILLIS. Certainly. One of the positive things about the Crop 

Insurance Act is it allows private groups to submit products that 

addresses their needs. If we look in the last 4 years, the amount 

16 

of buy-up coverage for rice has gone from 28 percent to 70 percent. 

That is just since 2008. A lot of that is because of these products 

that offer and hit the needs that rice farmers have. 

We are working with the private submitter who submitted the 

margin program, and right now, trying to come up with the details 

of that. My understanding is that as it stands, actually, there is a 

flexibility to make sure that the margins of rice are reflected in 

how the policy operates, and you have my commitment to work 

with them to make sure that whatever policy comes out works for 

the producers it is meant to provide a safety net for. I think we 

all have the same goal on that front. 

The CHAIRMAN. Thank you. Let me switch gears. I want to talk 

about your work in implementing the Supplemental Coverage Option that was authorized in the farm bill. Could you let us know 

what you are doing specifically to ensure that all the rice-producing 

counties have SCO available to them, so that producers could get 

the full benefit of what was pledged under the farm bill? 

Mr. WILLIS. Yes. The farm bill also contained language that allowed RMA to use our own information instead of simply relying 

upon the NASS information, which is very good information, but 

sometimes we have some counties where we could offer SCO if we 

use our own information that NASS doesn’t have that county-level 

information. Moving forward, we will start to utilize that information. That will allow us to expand both crops and additional counties next year. Rice will obviously be a beneficiary of us using our 

own data, and our intent is to dramatically increase the number of 

counties that have SCO coverage for all crops, rice specifically as 

well. 

The CHAIRMAN. Thank you, Administrator Willis. 

I now recognize Ranking Member Walz, for 5 minutes. 

Mr. WALZ. Thank you, Chairman. I am going to have the 

gentlelady from Arizona start with the questioning on our side. 

Mrs. Kirkpatrick. 

Mrs. KIRKPATRICK. Thank you, Ranking Member Walz, and 

thank you, Mr. Chairman. This is my first appearance on this 

Committee, and I am really pleased to be here, so thank you. 

And, Administrators, thank you very much. I am new to the 

Committee but agriculture is not new to my district. I represent 

roughly the eastern half of Arizona. It is a very large, rural district. 

It ranks twenty-eighth out of the 435 Congressional districts in 

terms of the importance of agriculture. As we have 13,500 farms, 

including very large cotton growers, and a new industry in vineyards as we start to become a winery state, who would have 

guessed, and in my district. I have a special interest in emerging 

farmers, especially veterans and Native Americans. So my district 

has 12 tribes, 25 percent Native American, and they would like to 

get back into the farming business. 

So my question to both of you is what are you doing specifically 

to get that information to veterans, to Native Americans? How can 

I assist you in doing that? I have set up a veterans’ working group 

in my district, and also a Native American working group. And if 

I—if there are specific things that I can take back to them to help 

these emerging farmers, I would really like to know about that. 

17 

Mr. DOLCINI. Well, I appreciate the opportunity to answer that 

question, Congresswoman, and welcome to the Subcommittee. 

Mrs. KIRKPATRICK. Thank you. 

Mr. DOLCINI. As you may know, USDA has recently appointed a 

liaison to the veterans’ community. He is the Deputy Under Secretary for the Farm and Foreign Agricultural Services. His name 

is Karis Gutter. He is a Marine Reserve veteran. So Karis is leading an effort at the Department to focus on veterans’ issues. 

With regard to the broader issue about pulling Native Americans 

as well as veterans into our programs, at the Farm Service Agency, 

we spend a lot of time targeting our loan programs in particular 

on new and beginning farmers, and those who have been traditionally under-served or poorly served by FSA programs historically, 

and that would include Native American populations around the 

country. 

I sit on something called the Council on Native American Farming and Ranching. It is actually meeting in Oklahoma this week so 

I couldn’t be at the meeting, but we spend a lot of time at USDA, 

and particularly at the Farm Service Agency, working with our colleagues in the Department and across government to better serve 

all of our customers, including Native Americans and now the 

emerging veteran population that we have in this country. I would 

be happy to work with your office to tell you a little bit more about 

what we are doing specifically in Arizona. 

Mrs. KIRKPATRICK. Let us do that. I would be happy to meet with 

you and take some specific things back to my working groups. 

Administrator Willis? 

Mr. WILLIS. Two things I would like to mention. First of all, we 

have what we call risk management education that allows us to 

work with private partners, partners who are in the region. They 

provide education, oftentimes they are schools, but many different 

groups will apply for this funding. And they are the ones who know 

a lot of the individuals, and we are targeting individuals who are 

under-served, just like Val talked about. So the education is one 

area. We want them to know what crop insurance options are 

available to them. 

Mrs. KIRKPATRICK. How affordable is crop insurance for emerging 

farmers? 

Mr. WILLIS. Well, that was the next thing. One of the great 

things that was included in the farm bill is an incentive for beginning farmers and ranchers. Essentially, it reduces the amount they 

have to pay for crop insurance by ten percentage points. That is a 

very big deal. That was one of the first parts of the farm bill that 

we were able to make available. It should be available for all farmers now. It is for their first 5 years of farming. Obviously, when 

you are in your first few years, you might not have the equity built 

up that a more established farmer does. We have the education to 

let them know about it, but because of the farm bill changes you 

made, there are also some very real incentives for them. 

Mrs. KIRKPATRICK. Great. Thank you very much. I look forward 

to working with you. 

I yield back. 

The CHAIRMAN. Would you like to use the balance of your time? 

Mr. WALZ. No. 

18 

The CHAIRMAN. Okay. I thank the gentlelady. 

I recognize the gentleman from Ohio, for 5 minutes. 

Mr. GIBBS. Thank you, Mr. Chairman. 

Administrator Dolcini, can you clarify for me, I think there is 

some confusion, FSA county offices that have been closed, beginning with the farmers records were moved to administrative counties, but then also their yield base for the ARC program, which 

county is it, the administrative county they are in or could it be 

the county that they are physically—where their farm is located? 

Can you clarify that? There is some confusion on that, I think. 

Mr. DOLCINI. Sure, I would be happy to, sir. In fact, this issue 

was raised to me at the Commodity Classic in Phoenix several 

weeks ago, and we have worked on a solution that allows a farmer 

who farms in a specific county to use the physical location as their 

county of choice. FSA has closed some offices over the last several 

years, and that has created the situation that you have described 

and other Members may have in their districts. I think the solution 

that we have, which is to allow a farmer to choose essentially the 

county based on the physical location of his or her farm, is the best 

way to go. 

Mr. GIBBS. I would concur. Now, is there a deadline to make that 

selection if they are in a county that the offices were closed, and 

they have been moved to an administrative county to do administrative work—— 

Mr. DOLCINI. Right. 

Mr. GIBBS.—and let us say for previously the yields and everything has been moved from that—based on that administrative 

county, they can select to have it in their county—— 

Mr. DOLCINI. That is right. 

Mr. GIBBS.—you just said that. Now, is there a deadline or a 

timetable to make that selection, or how does that mechanism 

work? 

Mr. DOLCINI. Sir, I will have to get back to you if there is a specific deadline associated with that decision. It will be available for 

the 2015 crop year, and perhaps my staff can pass me a note here 

while you are in the room and I can give you a more fulsome answer to that, but what we will want to do is make sure that a 

farmer who is interested in having his or her FSA paperwork in 

a given county, and farms in that county, should have the opportunity to utilize that local FSA office. 

Mr. GIBBS. I agree, and I thank you. 

And I yield back, Mr. Chairman. 

Mr. DOLCINI. Thank you, sir. 

The CHAIRMAN. Thank you. 

I now recognize Ranking Member Walz, for 5 minutes. 

Mr. WALZ. Thank you, Chairman. And thank you again both for 

helping us understand what is going on. 

Mr. Dolcini, I wanted to start out. I know there has been some 

angst about relinking crop insurance to conservation compliance 

against some growers who didn’t participate in other FSA programs. Have you reached out to those folks, and what are you 

hearing? 

Mr. DOLCINI. Sir, we have reached out to those folks who may 

not have what we call an AD–1026, which is our form indicating 

19 

compliance with conservation rules and regulations on file. This 

has been a joint effort on the part of the two agencies in front of 

you, as well as our sister agency, the Natural Resources Conservation Service, to make sure that we are reaching out to specialty 

crop producers, whether they are in Minnesota or central California, or elsewhere in the country, that they have as much information as they need to understand the conservation compliance requirement, and understand what it takes to come into an FSA office and attest to that. 

We are on the right track. We are going to continue to do additional outreach in the weeks to come, and look forward to continuing to work—— 

Mr. WALZ. Mr. Willis, are you hearing that on the specialty crop 

folks? 

Mr. WILLIS. Yes. Yes, we are, and we are working side-by-side on 

compliance, trying to make sure everybody who needs to know 

about it knows about it. From the Risk Management Agency’s perspective, we sent letters to a wide group of people who need to 

come in and get that form filled out. One of my employees just yesterday talked about his local Farm Service Agency office had sent 

three notifications on this issue. We also sent, about a month ago, 

information to the crop insurance companies, so when they are sitting across the table from producers who may not know about compliance, they can tell them about it. We are trying to have a multipronged approach. 

Our goal is that every single producer that has crop insurance 

now, has crop insurance in the future because they filled out the 

form. We want everybody to stay in. 

Mr. WALZ. And I appreciate that because I—this is one of those— 

they care deeply about their soil health, and I want to make sure 

that this compliance issue doesn’t become a distraction from our 

goals of reaching that together. 

Mr. WILLIS. Yes. 

Mr. WALZ. Mr. Willis, another one, and I know you hear this lots 

from Members. Every year things happen, like I had massive rains 

and wind last year, that make planting conditions—and the crops 

end up—it is difficult to get it in the ground, then they bump up 

against the planting deadlines for crop insurance policies, and then 

we end up having to ask for extensions and things like that. Could 

you describe the process RMA uses to evaluate those planting 

dates, and how we go about changing or using them, because it 

ends up being a lot of angst for a lot of people? 

Mr. WILLIS. Yes, sir. In fact, I just had a meeting a few days ago 

up here, actually, with some Members. I have a lot of sympathy for 

Members from Texas, farmers from Texas, who have been in a 

drought for a few years, desperately want water, and unfortunately, they got too much water at one point in time. They were 

struggling to plant before the end of the planting period. 

Mr. WALZ. Yes. 

Mr. WILLIS. So I have a lot of sympathy for that. How those 

timelines are set, we set using local information. We have regional 

offices, we have ten of them around the nation. They will work 

with the local producer groups, the local land-grant extension, the 

experts in the area, and they try to set the time period to be flexiVerDate Mar 15 2010 13:09 Jul 13, 2015 Jkt 041481 PO 00000 Frm 00023 Fmt 6633 Sfmt 6601 P:\DOCS\114-09\93969.TXT BRIAN
20 

ble, but essentially, we want it to start when it is reasonable to 

plant a crop, and we want it to end when you shouldn’t plant a 

crop after a certain point in time. The reason is, if we plant in 

those periods of time, you have the highest likelihood of success, 

and with that, obviously, crop insurance premiums can be lower because that is when you are supposed to plant a crop. 

Every year, there are anomalous conditions somewhere in the nation, and it is very difficult and we understand. It does provide a 

little flexibility inasmuch as you can plant after the final plant 

date, but your guarantee, how much you are insuring, goes down 

about one percent a day. So if people feel like the dates need to be 

reevaluated, we encourage them to work with our local folks. Every 

year, we do change some of these just to reflect changing conditions 

in each area. 

Mr. WALZ. I appreciate that. And I would just like, maybe for 

both of you, Mr. Dolcini, maybe you can speak to this. You have 

been traveling a lot. Each of us see our FSA offices, and the gentleman’s question was right, consolidation and things, there are issues 

that came up in that. My concern though is how is the morale of 

those workers as this happened, as we have basically a smaller 

number of people in offices doing more work at this point in time, 

how are they responding across the country as you see it, with 

their partners at the universities? 

Mr. DOLCINI. That is a great question, Congressman, and you are 

right, I do a lot of traveling since I came to this position. I have 

been to about 25 states, and I always go out to county offices and 

talk with PTs who have been there for 2 years in some cases, 30 

years in other. I think morale is, by and large, good. We provided 

more resources to the field in terms of temporary employees, we 

have eased up on a hiring freeze that we were operating under, 

and we have provided more tools to them to get the job done. Obviously, the farm bill is a big job, and I wanted to make sure that 

my county offices weren’t broken by the workload. 

There are offices that need a little bit more attention, that is for 

sure, but, by and large, staff is feeling good because the relationships they have across the counter is really our competitive edge 

at the Farm Service Agency. 

Mr. WALZ. Very good. 

I yield back. Thank you, Mr. Chairman. 

The CHAIRMAN. I thank the Ranking Member. 

I now recognize the gentleman from Georgia, Mr. Scott, for 5 

minutes. 

Mr. AUSTIN SCOTT of Georgia. Thank you, Mr. Chairman. 

Mr. Willis, I actually majored in risk management and insurance, so while terms like loss ratio and adverse selection put most 

people to sleep, they actually wake me up. So I do look forward to 

working with you as we go forward in making sure that we have 

a crop insurance program that keeps good farmers in business in 

bad years. Our goal is certainly not to guarantee everybody a profit, or anybody a profit, I should say. 

I do want to speak briefly to the concern of actively engaged. And 

just going back through my life, my two grandfathers who both 

farmed, towards the end of their life, it was their land, it was their 

seed, it was their tractors, but the fact of the matter is they were 

21 

no longer physically able to do the majority of the work. And my 

fear is that when we get into the definition of actively engaged, 

that we actually end up working contrary to what we should be 

doing, which would be to encourage more people to get into agriculture. And so I would also encourage you to take a look at the 

overall loss ratio and what that may do with regard to the crop insurance system because those, in the end, may very well be the 

best risks that we have in the system; those who may not meet 

that definition of actively engaged, because being a good farmer is 

more than just being able to drive a tractor; it is growing a good 

crop. But I would suggest to you that being a good business person 

is probably more important than growing the good crop in today’s 

global economy. 

So I look forward to working with you on those issues, and again, 

I would ask that you work with this Committee and be very careful 

with that definition of actively engaged. If you look at our farm 

population, a lot of them are, unfortunately, older today and not capable physically of doing some of the workload that you may be 

asking them to do. 

Mr. Dolcini, one of the things that I am concerned about is counting crops that aren’t harvested against a farmer’s generic base. I 

have people in my great State of Georgia who plant wheat for grazing. They graze their cows on it, they never harvest the wheat, and 

then that is counted against their generic base. It makes no sense 

to me to count a crop that is not harvested against the generic 

base. Would you speak to this issue, and what do you anticipate 

the actions of Farm Service to be with regard to this? 

Mr. DOLCINI. Congressman, thanks for the opportunity. And I, 

just on the actively engaged issue, share with you a real concern 

about bringing a new generation of farmers and ranchers into the 

agricultural economy of this great country. And one of the things 

that we are doing every day at the Farm Service Agency is looking 

for new ways to make sure that we build that important resource. 

On the question of cover on generic base, I think that we are in 

agreement that cover crops are a great option for many producers 

around the nation, and our sister agency, the Natural Resources 

Conservation Service, has a variety of programs that can help in 

that regard. I think that the Secretary was asked this question, or 

one similar to it, several weeks ago, and in that interim period we 

have consulted with the Office of General Counsel and just don’t 

believe that there is a lot of room for us to maneuver on this particular question here, but I look forward to continuing to work with 

the staff and your office on it. 

Mr. AUSTIN SCOTT of Georgia. I think the majority of the Members of the Committee would disagree with the lawyers on this, and 

that I don’t think we ever intended in the drafting of the farm bill 

for a crop that was not harvested to be counted against a farmer’s 

generic base. If your attorneys are telling us that we need to have 

legislation to fix that, then I would think that there would be broad 

agreement among the Committee to do that. But this is having a 

tremendous impact on a lot of people, and quite honestly, it—a lot 

of these people are the best farmers in America. I look forward to 

further discussions on that. 

22 

I am almost out of time, Mr. Chairman, so I will yield the remaining 20 seconds of my time. But I look forward to working with 

you to resolve that issue. It needs to be resolved sooner rather than 

later. 

Mr. DOLCINI. Thank you, sir. 

The CHAIRMAN. I thank the gentleman. 

I now recognize the gentlelady from Florida, for 5 minutes. 

Ms. GRAHAM. Thank you very much, and I apologize for being 

late. Mr. Scott, do I get your 20 seconds? Is that how it—thank 

you, Congressman. 

First, thank you very much. I appreciate it. My family has deep 

roots in agriculture in Florida, so it is such an honor to be on this 

Committee and serve on this Subcommittee. I apologize if this 

question has already been asked, following my election, I made a 

tour around the district, and I met with quite a few farmers, and 

there is still confusion about the implementation of the farm bill. 

And my question goes to that. I mean how are your offices working 

in helping managing the transition and implementation of the new 

farm bill in districts such as mine, which is very rural, and they 

need some help in understanding what they are expected to do to 

meet the requirements of the new farm bill. 

Mr. DOLCINI. Thank you for the opportunity, Congresswoman. In 

the entire country, and certainly in the State of Florida, we have 

had a robust outreach effort beginning last spring when we rolled 

out the first farm bill program. Since then, we have rolled out successive programs and have incorporated similar outreach efforts 

which involve relationships with local land-grant universities, with 

cooperative extension offices, with Farm Bureau chapters, with 

commodity organizations, with Congressional offices in some cases, 

and with others, to ensure that producers understand these new 

and complicated programs. They are significantly different from the 

programs that the 2008 Farm Bill included, in some cases, they are 

brand new, and so we really wanted to make sure that there was 

enough understanding out there that folks could make well-informed and thoughtful decisions. 

To that end, the farm bill contained $100 million, we appreciate 

that, for the development of web-based decision tools and other 

software that would help farmers, in the comfort of their own home 

office or at the kitchen table, plug in their numbers and make a 

determination as to which program might be better. We have included a robust direct mail program. So, for example, ARC and 

PLC programs, we have mailed close to five million postcards to ensure that folks know about public meetings, they know about program deadlines, and they know about other important issues associated with these decisions. 

We have really done an unprecedented job at the Farm Service 

Agency in making sure that everybody who wants to know about 

these programs does indeed know about these programs. 

I would just close by saying the 5,000 public meetings that we 

have done have ranged from large, several hundred member meetings in Montana, I did five meetings in 2 days a few weeks ago, 

to small county office-based meetings where a county director 

might be talking to two or three producers and answering essentially the same questions that we would do in those large forums. 

23 

So we are doing a lot of good things around the country. I think 

the response on our producers has been excellent, and it has really 

engaged our staff as well. I have the hardest working public employees in the United States, I would venture to say, and they have 

really put their shoulder to the wheel on this effort for the last 9 

months, and we are in the homestretch now, and I think that 

things have gone pretty well. 

Ms. GRAHAM. That is really great to hear. I have some of the 

hardest working constituency service providers in Florida’s second 

Congressional district. Maybe we could put your hard workers together with my hard workers, so if there are still any questions for 

the farmers in my district, they can get answered. I appreciate it. 

My next question is about citrus greening in Florida and our citrus crops. Do you think there is enough being done to provide a 

safety net for these specialty crops? 

Mr. DOLCINI. On citrus greening, we have used our Tree Assistance Program to provide assistance to those impacted by that horrible disease. I don’t know, Congresswoman, that it is going to 

make them whole necessarily, but it provides important relief 

where relief previously didn’t exist. As you probably know, we have 

an energetic State Director down there named Rick Dantzler who 

has really been up and down the state to ensure that folks know 

about the TAP program for citrus greening, and that Rick and his 

team have done a battery of public meetings as well on that topic. 

I would certainly be interested in working with your office if 

there is more that we can do, but I think that this is a good first 

start. 

Ms. GRAHAM. I appreciate that. Citrus greening has decimated 

our citrus crop in Florida, and it is sadly now making its way West. 

They are starting to see it some in California, so—— 

Mr. DOLCINI. Yes. 

Ms. GRAHAM.—we need to find a solution to this quickly, not only 

for Florida but for the rest of our citrus crops across the country. 

So thank you. I appreciate that. 

Last question, on peanuts. And my district is the largest peanut 

producer in the State of Florida—am I out of time? I see that my 

red light went off. Can I finish my question, Mr. Chairman? 

The CHAIRMAN. Go ahead, yes. 

Ms. GRAHAM. When are you going to approve the insurance options for peanuts? If you could just provide an update, I would really appreciate it, and I appreciate your willingness to allow me more 

time, Mr. Chairman. 

Mr. WILLIS. Sure. 

Ms. GRAHAM. Thank you very much. 

Mr. WILLIS. Certainly. Two things to comment on. First of all, 

the farm bill required a peanut revenue program. Historically, they 

had only had a yield-based policy. We got that out this year. Peanut producers are signing up for that, have been signing up for 

that. So far we have heard positive comments on that. That is a 

very important thing for those producers. 

Second of all, we are looking to expand the Supplemental Coverage Option to many crops. Peanuts is one of those we are looking 

at. That would provide another option for those producers. So we 

24 

are aggressively trying to expand the safety net for peanut producers. 

Ms. GRAHAM. Anything else to add? No? Okay, thank you. 

And so I yield back the time I no longer have, Mr. Chairman. 

Thank you. 

The CHAIRMAN. I thank the gentlelady. 

I now recognize the gentleman from California, Mr. LaMalfa, for 

5 minutes. 

Mr. LAMALFA. I like how Ms. Graham deftly used that 20 seconds of Mr. Scott there though. Okay. 

Let us see, I will be coming to Mr. Willis after I ask Mr. Dolcini 

about California’s drought situation. We have had ranchers up 

there suffering from needing the drought relief. We did have some 

delay on implementing the drought relief in California, and a couple of our ranchers were really having difficulties obtaining the 

funding, so it was being handled at the local level. Would you just 

comment though please on the status of the disaster program and 

how it is being sped up there? 

Mr. DOLCINI. I think the program that you are referencing, sir, 

is the Emergency Conservation Program that is administered by 

FSA, and we have had some challenges in California because we 

need to do cultural resource background work for all of the various 

ECP applications. We have since contracted that work out, so that 

it is moving more rapidly than it had, and we are able to provide 

emergency hauling monies, monies for drilling in some cases, and 

we had ECP contracts in your district certainly, and all over the 

State of California. 

Mr. LAMALFA. Okay, thank you. 

Mr. Willis, coming back to Mr. Crawford’s line of questioning on 

rice. It is a very significant crop in Arkansas, 1.3 million acres 

there, 1⁄2 million acres in California, several other southern states 

growing significant amounts. So for it to be completely dismissed 

as lightly traded, which Chicago may be the basis for price discovery, isn’t really accurate because it is not heavily handled on 

those particular marketing situations there. So it was disturbing to 

me, as well as Mr. Crawford, on 2015 being a year where there 

won’t be the revenue policy coverage for that commodity. Again, it 

is very significant in my district to many of my neighbors, and I 

am a producer myself, so we pay attention to a lot of these issues. 

What can be put in place for 2015 in what is volatile price market, 

as we see the price already compressing for rice this year as the 

market year plays out for 2014 crop, and what the effect will be 

on 2015. Even with the drought it is doing that. What can we do 

to—or how can you elaborate on what we can be doing to have a 

revenue policy available for 2015 for a very significant crop in this 

country? 

Mr. WILLIS. Yes. Certainly. As we talked about earlier, obviously, 

we have come a long way with rice. Those changes have resulted 

in producers participating in the program. Unfortunately, this year, 

as you talked about, the revenue option was not available. We are 

already trying to find a solution for that—— 

Mr. LAMALFA. Excuse me. Was not available. I mean the farm 

bill passed with that intention. I supported it. I supported removing direct payments, and so there is an implied promise there, I 

25 

guess, with direct payments, again, happily being gone. My growers 

are supportive of that, and many of the others around the country, 

but this was supposed to be that basement, that safety net on low 

prices and now hearing that they are not available in 2015, I am 

going to have to answer to a lot of folks around the state and the 

country on why that safety net is not there. 

Mr. WILLIS. The rice policy was not a result of the farm bill. It 

has been around for many years before that. 

Mr. LAMALFA. But the—again, with the direct payment—— 

Mr. WILLIS. Yes. 

Mr. LAMALFA.—being eliminated. 

Mr. WILLIS. Yes. Yes. The the crop insurance contract that was 

set had specific parameters as far as number of trades, et cetera. 

That is used to set a price and also to set how much to charge for 

the policy. Unfortunately, those weren’t met. There was kind of a 

fallback option. Unfortunately, that wasn’t met. So what we need 

to do is find a solution long-term because I agree 100 percent, sir. 

Our producers have come to count on crop insurance as a dependable safety net that provides timely assistance. They went in this 

year to buy a revenue policy, and unfortunately, it wasn’t there. 

We are going to work to fix that in the future. I recognize the issue. 

I am happy to have further discussion on that because we share 

the same goal, which is a revenue policy every year for rice producers. 

Mr. LAMALFA. What are growers to tell their bankers and their 

lenders this crop year when they see perhaps that is not a tool to 

ensure a basement for 2015? 

Mr. WILLIS. This year it is not available. Yield coverage is available for them. I have talked quite a bit—— 

Mr. LAMALFA. Yield coverage is quite a different animal 

than—— 

Mr. WILLIS. Yes. 

Mr. LAMALFA.—than revenue, and so—— 

Mr. WILLIS. It is, and your point is very valid inasmuch as every 

producer has a different risk they are trying to protect. Yield coverage for rice is not as valuable as revenue. 

Mr. LAMALFA. So we are seeing no solution for 2015? It is over 

with, or is that something—— 

Mr. WILLIS. Yes. Yes, they—— 

Mr. LAMALFA.—we can cobble together as—as we can move 

swiftly around here once in a while? 

Mr. WILLIS. We are looking for a solution for 2016, sir. 

Mr. LAMALFA. I yield back, Mr. Chairman. 

The CHAIRMAN. I thank the gentleman. 

Votes have just been called, so we will suspend. I am going to 

ask our witnesses, Administrators Willis and Dolcini, if you would 

to stand fast momentarily. This is a single vote in this series. We 

will go there and get back and resume. And Mr. Allen will be the 

first recognized. We will briefly recess. 

[Recess.] 

The CHAIRMAN. To our witnesses, I want to thank you for your 

patience as we resume. I appreciate your indulgence on that brief 

recess. 

26 

It is my privilege to recognize our distinguished full Committee 

Chairman, Mr. Conaway. 

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A 

REPRESENTATIVE IN CONGRESS FROM TEXAS 

Mr. CONAWAY. Thank you, Mr. Chairman, I appreciate that, and 

I apologize for getting here late, but I had a markup in another 

committee this morning that I am not the chair of, so I needed to 

be there for a quorum. As chair, you will appreciate quorums as 

you move through this issue. I know the—— 

The CHAIRMAN. Absolutely. 

Mr. CONAWAY.—the really distinguished Chairman beside you is 

appreciative of that. 

I am going to ask unanimous consent to enter my opening statement into the record. 

The CHAIRMAN. Without objection. 

[The prepared statement of Mr. Conaway is located on p. 5.] 

Mr. CONAWAY. Thank you. Again, it has been my intent to join 

each of the subcommittees on their first hearing to let folks know 

how much confidence I have in your leadership, and Tim’s as well 

on the Ranking Member’s side. You guys have terrific responsibility. It is pretty broad and very important, and I have great confidence in you and your leadership, and Tim’s help, that we will get 

the proper oversight done over implementation of the farm bill as 

we move forward in other issues that come up. You are a great 

Member, and I appreciate you agreeing to take on this responsibility. Thank you very much. 

If I could, I would like to ask just one quick question, and then 

we can get back to your regular order. 

The CHAIRMAN. Absolutely. 

Mr. CONAWAY. Thank you. 

Mr. Dolcini, thank you for being here today. If I had read my 

opening statement, I would have mentioned assigning yields on generic base acres. We don’t need to go into a long back-and-forth 

about irrigated, non-irrigated, all that kind of stuff, but what I 

would appreciate getting from you is confirmation that you will 

continue to work with the various parties who are trying to avoid 

any unintended consequences that could arise if we do not implement this program on generic base acres correctly as we move forward. I know it is difficult, but will you give me some sort of confirmation that you understand the problem, and you are willing to 

work with folks? 

Mr. DOLCINI. We do understand the problem, Mr. Chairman. I 

appreciate the opportunity to continue to work with your staff and 

with you on this. 

Mr. CONAWAY. Okay. I mentioned both of you and Mr. Willis earlier. Thank you for the hard work you and your teams have done. 

You guys get the credit. A lot of your folks did a lot of hard work. 

I know how that works. You have done a terrific job in my view 

with some very difficult implementation processes. There are a few 

things left to get done, and I hope that we don’t allow our conversation about that to taint all the hard work that went into getting 

to this place. Many things did not rise up to be a problem because 

you guys took care of them to the satisfaction of the producers and 

27 

everyone involved. Thank you for the hard work. We have a few 

things left to fix, and I appreciate you agreeing to continue to help 

and be open to the comments from those who have concerns, particularly about the yield assignments on generic base acres, we can 

get that worked out. But again, thank you both. Please extend my 

thanks to your teams as well for the hard work they have done in 

getting us to this point. 

With that, Mr. Chairman, I yield back and let you get back to 

regular order. Thank you. 

The CHAIRMAN. Thank you, Mr. Chairman. I appreciate you 

being here. 

I now recognize the gentleman from Louisiana, Mr. Abraham, for 

5 minutes. 

Mr. ABRAHAM. Thank you, Mr. Chairman. I will echo a lot of the 

sentiments of my colleagues on the Committee here that both our 

farmers and ranchers are probably the best stewards of the land 

than any agency or conservationist or environmentalist. They are 

going to take care of their own, their land and family. And on the 

crop insurance thing, it is so important to my district in LA–5, up 

in the northeast corner of Louisiana, because we know what the 

crop insurance does is just hopefully, if we have a bad year, makes 

us bankable for one more year. And that is the way we look at the 

crop insurance program for us. I still actively farm corn and soybeans on my property with my son-in-law who is the manager, so 

we understand the family-based farm deal. 

Just a couple of questions on cotton because, up in my district, 

we still actually have quite a bit of cotton in northeast Louisiana. 

Administrator Willis, are you planning to review the timing of 

the STAX indemnities as cotton is harvested over several months 

of the year. It starts first in south Texas, and then it moves on into 

our region. And it seems to me to make logical sense that these 

growers would receive an indemnity earlier since the necessary 

county data is available sooner. Is that something you would be 

willing to help us with? 

Mr. WILLIS. Yes, we would be happy to have a discussion on that 

matter. We actually have some plans to work with some producer 

groups to see when the earliest we can. I don’t know exactly what 

flexibility we have, but we are happy to have a discussion on that, 

sir. 

Mr. ABRAHAM. Okay, fair enough. 

And just one more quick question on cotton. Between 60 and 70 

percent of the cotton is marketed through the cooperatives that utilize a marketing loan program, and this is important for us to— 

regardless of the price of cotton which right now, is fairly low. 

However, now that the marketing loan gains and loan deficiency 

payments are included in the payment limit, producers and marketers are concerned that this could adversely affect the cotton 

marketing system. Why isn’t the USDA using its authority to remedy this? 

Mr. DOLCINI. Mr. Abraham, thank you for the opportunity to answer that question. 

We understand that the application of payment limits to marketing loan gains and LDPs does represent a change, especially for 

the cotton industry. We have been working with the National CotVerDate Mar 15 2010 13:09 Jul 13, 2015 Jkt 041481 PO 00000 Frm 00031 Fmt 6633 Sfmt 6601 P:\DOCS\114-09\93969.TXT BRIAN
28 

ton Council for some time now to provide a system that allows for 

an accurate recording of marketing loans and LDPs in realtime—— 

Mr. ABRAHAM. Yes. 

Mr. DOLCINI.—so cotton producers better appreciate the ramifications of various financial decisions in front of them. We began that 

process this month, in fact, and I was just informed last night that 

we processed a variety of files from cotton companies, and have 

begun the back-and-forth with verified customer data, and are beginning to establish the reporting process so that the companies 

better understand what the situation is. 

Again, I would be happy to come back to your office or the Subcommittee and discuss this further. 

Mr. ABRAHAM. Okay, we will take you up on it. Thank you very 

much. 

Mr. DOLCINI. Yes, sir. 

Mr. ABRAHAM. I yield back, Mr. Chairman. 

The CHAIRMAN. I thank the gentleman. 

I am pleased to recognize the former Committee Chairman, and 

my de facto policy mentor, the gentleman from Oklahoma, Mr. 

Lucas. 

Mr. LUCAS. Thank you, Mr. Chairman, and I appreciate those 

kind comments and the kind efforts of both you and Mr. Walz over 

an extended period as we put the wondrous, amazing thing called 

the 2014 Farm Bill together. 

With that, Mr. Dolcini, I would like to visit for a moment about— 

and I know an issue that was touched on in the context of grazing 

by my colleague, Mr. Scott, but I would like to visit with you about 

an issue I brought up in February with Secretary Vilsack about 

cover crops, when he appeared before the Committee. And at the 

time, FSA had decided that crops planted for cover on generic base 

would be ineligible for ARC and PLC. My concern was that this 

would serve as a disincentive to planting cover crops. 

Could you walk me through the progress you have made in addressing this yield quality issue, and making sure that producers 

can choose whether or not to count cover crops as acres towards 

their generic base? 

Mr. DOLCINI. Sir, I appreciate the opportunity to respond. Let me 

first extend my sympathies to the people of Oklahoma on yesterday’s tornadoes. I have been in conversation this morning with 

Francie Tolle who you know is our State Director over here, 

and—— 

Mr. LUCAS. Wonderful State Director. 

Mr. DOLCINI. She is a wonderful State Director. There were no 

harm to FSA service centers or other offices, and we are certainly 

ascertaining what the extent of the damage is out there and we 

will be happy to help however we can. 

Mr. LUCAS. Of course. 

Mr. DOLCINI. Farmers and ranchers have been affected. 

Mr. LUCAS. I appreciate it very much. 

Mr. DOLCINI. With regard to the cover crop question, and I addressed Mr. Scott’s concerns a few moments ago on this as well, we 

think that cover crops are wonderfully beneficial to the American 

working landscape around the nation, and NRCS has a number of 

29 

good programs that support that. We just felt, after the Secretary 

and you and other Members exchanged in that conversation earlier 

this year, went back to the Office of General Counsel and just don’t 

feel as though there is a lot of room for us to maneuver on that 

issue, sir. 

Mr. LUCAS. Well, I would like for you to continue to look at it, 

and as the Chairman of the Subcommittee noted, I had just a little 

bit of involvement in putting the language together, and that was 

very much the intent when we put the language together to make 

that possible, but I appreciate that point, sir. 

Mr. DOLCINI. Thank you, sir. 

Mr. LUCAS. And a couple of other comments. On the point about 

establishing yields for ARC and PLC on generic base, I would like 

to simply reiterate the comments that some of my colleagues have 

made earlier that we want the market to drive the decisions producers make. So it is incredibly important that the yields FSA establishes are appropriate and are reflective of the significant differences between irrigated and non-irrigated, because in areas 

where those are circumstances, it really hugely makes a difference. 

And I just make that point, and I know you are working on those 

issues. 

And one other thing along that, I, in all fairness, would like to 

thank you for your help in ensuring that the peanut producers who 

were impacted by the Clint Williams bankruptcy were able to remain in the marketing loan. It has been a very bad situation for 

everyone involved, and I simply ask that you continue to keep the 

well-being of the producers in mind as you have so far, I must enthusiastically say, as you tie up all the loose ends. Thank you again 

for that. 

And with that, I would turn to Mr. Willis for a question and a 

thought. And I can’t thank you enough for your efforts to get the 

APH adjustment, I know we now kind of like to refer to that as 

the yield exclusion, out the door for the spring-planted crops, and 

that in addition to all of the other new provisions and all the 

things you have to do, but I noticed in the first page of your written statement about implementing the actual production history 

yield exclusion ahead of schedule. And I, in all fairness, living on 

the east side of the Rockies in the Southern Plains, representing 

the northern half of the great State of Oklahoma, I note that some 

of my wheat growers are very much sensitive about being left out 

last fall, and in my town meetings, explained that to me with a bit 

more gusto than perhaps we will discuss it here in this polite environment. Was that well-worded, Mr. Chairman? 

The CHAIRMAN. Well done. 

Mr. LUCAS. Thank you. Can you assure me that the yield exclusion, and the coverage levels by practice, will be in place for wheat 

planted this fall? 

Mr. WILLIS. Yes, I can. 

Mr. LUCAS. Thank you. We can’t be stepchildren twice in a row. 

Thank you. 

And with that, Mr. Chairman, I yield back. 

The CHAIRMAN. I thank the gentleman from Oklahoma. 

I now recognize the gentleman from Georgia, Mr. Allen, for 5 

minutes. 

30 

Mr. ALLEN. Thank you, Mr. Chairman. 

And I want to talk a little bit about the peanut hay here. The 

Pasture, Rangeland and Forage Crop Insurance Program is designed to assist livestock and hay producers during a time of declining rainfall. The difference between this program and other 

crop insurance programs is it does not require a disaster to receive 

benefits. The program pays an indemnity when the historic rainfall 

of an area falls below the average based on the coverage selected 

by the farmer. Producers can select a maximum of six intervals per 

year, or a minimum of two intervals per year. And if you look at 

hay, Georgia’s PRF county base value is well below that of our surrounding states in Florida, Alabama and South Carolina, with respect to those states. With Georgia being the leading producer of 

peanuts nationwide, many believe the high amount of peanut hay 

is negatively impacting our values. While our state cannot specifically point to peanut hay as being the culprit, EGA forage specialists believe that this is the reason. And determining their value as 

RMA gets their data from NASS field surveys, and they are on 

page 8 of the NASS survey attached. 

Many of my hay farmers believe peanut hay should be listed as 

a byproduct and not included in regular forage. Peanut hay is 

sometimes fed, but typically not so. It doesn’t have the quality of 

other high-quality hay produced. 

I believe there have been some talks about this at RMA, and are 

you familiar with this dilemma we have there in Georgia? 

Mr. WILLIS. I have heard about the issue, but I certainly am 

happy to look into it and get back to you on the specifics. We certainly want to have all of our programs reflect the accurate price 

and to reflect what farmers, ranchers have lost, and if we need to 

make some changes we will certainly talk about that and see what 

we can do to make sure it works for them. 

Mr. ALLEN. That would be great, Mr. Willis, and if you could submit that response to me in writing, I would really appreciate it so 

that I we can take it further. 

Also, USDA has previously commented that RMA will strongly 

consider offering SCO for peanuts in 2016. Will peanut producers 

have the option to purchase an SCO policy for 2016? 

Mr. WILLIS. We are looking at nearly 40 additional crops and 

running the analysis. If there is data, I would suspect for peanuts, 

it is obviously a widely-grown crop, if there is that information we 

need, yes, we will offer it. 

Mr. ALLEN. Yes. And from everything we hear, we are going to 

grow more peanuts in Georgia this year because of our cotton 

issues. But while we are talking about cotton, I would like to commend the Department for their implementation of the new STAX 

income protection program, the yield exclusion provision in enterprise units by practice for the 2015 crop. These are tremendous important insurance products for cotton farmers, and I appreciate the 

time and effort the Risk Management Agency put into the timely 

implementation of these new insurance products. 

As you look at ways to improve STAX ahead of the 2016 crop 

contract change dates, one issue I believe needs to be addressed is 

RMA’s requirement that a producer must include all county—all 

cotton, dryland or irrigated, in the STAX policy being purchased. 

31 

I believe eliminating or modifying this requirement would be extremely beneficial for growers who farm both dryland and irrigated 

cotton, thus giving producers maximum flexibility in tailoring their 

insurance purchases to their risk management needs. Is this something RMA will look at in the future? 

Mr. WILLIS. Yes, in the near future we intend to talk about a few 

issues such as that one. While the vast majority of people are 

happy with everything we do with implementation, if there are outstanding issues that we need to discuss well ahead of time for next 

year, we are happy to discuss those. The reality is this program 

needs to work for producers, and we want to have those discussions. 

Mr. ALLEN. Okay, good. Well, thank you. 

And I yield the remainder of my time. Thank you, Mr. Willis. 

Thank you, Mr. Chairman. 

The CHAIRMAN. I thank the gentleman from Georgia. 

I am now pleased to recognize the gentleman from Texas, Mr. 

Neugebauer, for 5 minutes. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman, and for holding 

this important hearing. And I know that Chairman Conaway was 

by here just a while ago, and I want to associate myself with his 

conversation about the yields that are being applied on covered 

commodities on the generic acres. We need to get that right so that 

farmers are going to make decisions based on what is good economics, and that our program is not steering them to one particular 

area or not. I know that you are working on that, and it is important work and so we would encourage you to continue to do that. 

Mr. Dolcini, Secretary Vilsack was back by here I guess last 

month, and we were talking about the marketing loan issue, and 

I know that has also been brought up, but that is extremely important to the producers in my district and being able to ascertain 

where they are in the process. And so I don’t know what your answer to that has been previously, but, I know that it is certainly— 

when I was back in the district that a lot of producers were concerned about that. And Secretary Vilsack indicated that you all are 

working on that. Is there an update on where you are on that? 

Mr. DOLCINI. Were you referring to cotton specifically, sir? 

Mr. NEUGEBAUER. Yes. Yes. 

Mr. DOLCINI. Yes, we are working closely with the National Cotton Council to provide better real-time data for them so that they 

understand the ramifications of marketing loan gains and related 

financial issues, and have begun, in fact, this week to exchange information with them. We think that it is a good first step solution, 

and we will continue to work closely with them. 

Mr. NEUGEBAUER. If you could get that information out to the 

producers. 

Mr. DOLCINI. Yes, sir. 

Mr. NEUGEBAUER. Yes. Yes. Mr. Willis, it was just mentioned a 

little bit about enterprise units by, some of us were disappointed 

is that it was the intent—when we were doing the farm bill is that 

you would be able to choose and by practice, but what we are hearing now is that the current policy is if I put my irrigated in enterprise, I have to put my dryland—and vice-versa. I think we have 

had previous conversations about that and it was not our intent to 

32 

do that. What we were trying to do is give producers as many 

choices as they can. But can you give me any update on what RMA 

is doing to address this issue? 

Mr. WILLIS. I think that would fit into the category of some of 

the issues that we are looking at in the future. The interim rule 

was implemented, as you just discussed. We have not issued a final 

rule on that specific provision or any others yet. So we can still 

have some discussion on that, but there is nothing else at this 

point in time, that it is kind of in the category of things we want 

to make sure that people are happy with to the best that we can. 

Mr. NEUGEBAUER. Well, thank you, because that is extremely important. And one of the things that the whole intent of the farm 

bill was to give producers as much flexibility and choices as they 

can so that they can tailor the various programs to their particular 

operation. And so it is one of the things we are hopeful that that 

will happen sooner rather than later. 

I do want to commend both of you, you have done a good job of 

taking the farm bill and trying to implement the changes, and one 

of the things that has been very encouraging is that the number 

of tools that you have tried to provide producers because they were 

making some very important choices, and so the outreach has been 

good. We do hear a little bit that the FSA officers are a little bit 

swamped right now, and obviously have important deadlines coming up on March 31, and I hopeful that we can get everybody processed for that time, but if for some reason you have a big waiting 

list on March 31, what is the plan? 

Mr. DOLCINI. Well, the plan, sir, is to do what we have done historically, and that is use registers in our county offices. So a farmer 

needs to contact his or her local FSA office prior to the deadline 

to say, ‘‘Look, I just can’t get in by the deadline, but I want to come 

in and make my election or do my reallocation,’’ and I anticipate 

that we will use the month of April to clear up the register. 

In addition, there are other states, sir, that are a little ahead of 

the process, and I am going to be looking to send jump teams from 

some of the states that have completed most of their work down 

to places like Oklahoma and Texas that are not only looking at a 

lot of ARC and PLC-related work, but a lot of LFP work from 2012 

to 2014, and of course, 2015 LFP has triggered. So your home state 

and certainly others have a fair bit of work on that program alone. 

Mr. NEUGEBAUER. Yes. Well, it is good to hear you say that because that was going to be one of my suggestions is if you need to 

move some folks around to make sure that we get that done because it is going to be planting season, and it is getting close to 

time to having all of these issues resolved. 

Mr. DOLCINI. That is right. We have really used temporary employees quite well around the nation, and appreciate the fact that 

there was money in the farm bill last year for FSA to hire temporary employees. But that only goes so far, and really what I want 

to be able to do is move folks around the nation who can help out 

in places like Texas and Oklahoma, and other states looking at a 

pretty big workload. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman. 

The CHAIRMAN. I thank the gentleman. 

I now recognize the gentleman from Alabama, for 5 minutes. 

33 

Mr. ROGERS. Thank you, Mr. Chairman. 

Administrator Dolcini, as you know, USDA recently released the 

actively engaged rule to determine which persons associated with 

a farm are eligible for farm program payments. As you work on the 

rule, I hope you will address the concerns of some of my farmers 

who worry it may be written too narrowly to exclude members of 

a farming entity who should, in fact, be eligible. Can you address 

that concern and try to tell me the status of where you are with 

that rule? 

Mr. DOLCINI. Absolutely, sir. As you know, the rule was announced earlier this week. It is a proposed rule, and there will be 

a 60 day comment period for folks to weigh-in on what USDA has 

proposed. This is the first time since 1987 that we have sought to 

better define the actively engaged rule. The default limit is one payment per farm, with the opportunity for two additional payments 

to be made to that farm depending on its size and/or its complexity. 

What we have also required this time around is that a person receiving a pay limit has to be substantially involved in the active 

management of that farming operation. They have to keep a log to 

demonstrate the work that they are doing on labor issues, finance 

issues, marketing issues, agronomics issues, and they have to show 

that they have either 500 hours or 25 percent of their time associated with the operation of that farm in order to receive a pay limit. 

But we think it is a good strong rule, it is a good first step. You 

know, it was crafted within the confines of what the 2014 Farm 

Bill spoke to, and we look forward to a robust comment period, sir. 

Mr. ROGERS. Great. Thank you. 

Mr. Willis, when the Agriculture Act of 2014 was passed last 

year, it was anticipated that crop insurance would account for 

about nine percent of the total cost of all the farm programs. The 

President’s budget this year seeks to cut crop insurance by nearly 

$16 billion over 10 years, which would leave a lot of my farmers 

exposed to higher cost for crop insurance, and many farmers would 

be forced to take out lower levels of coverage to protect against the 

many hazards they face year in, year out. 

While it is not surprising to me to see crop insurance attacked 

again in this budget, it is disturbing that it would come about in 

the first year of implementation. Farm bill programs work together 

to keep the Alabama farming community viable and food prices affordable to consumers. Without affordable crop insurance, east Alabama farmers, the rural economy, and the consumer would all suffer. How can the Administration support the cut to crop insurance 

of this magnitude? 

Mr. WILLIS. Certainly. The President’s budget proposes two 

major things. First of all, some changes to Prevented Plant Program. Those actually—two of those three recommendations came 

out of recent audits. Really what we are trying to do is make some 

changes to strengthen the program in the long-term with those. 

The other one is some reductions in the harvest price option and 

policies that have that, essentially reducing the subsidized portion 

from 62 percent to 52 percent. The thought being that those policies, because they protect upward price protection, they cost more, 

they have a higher risk, and we are just asking the farmers to pay 

a little bit more of that, but there is still over 50 percent subsidy 

34 

for those. Obviously, both those proposals, Congress will have time 

to debate those. Those are legislative proposals, sir. 

Mr. ROGERS. Okay, thank you very much. 

With that, I yield back, Mr. Chairman. 

The CHAIRMAN. I thank the gentleman. Did you have anything 

further? I actually will recognize Mr. LaMalfa. We are down to our 

final question, and I wanted to extend a little bit of latitude and 

recognize Mr. LaMalfa. 

Mr. LAMALFA. Okay, thank you again, Mr. Chairman. 

I just wanted to follow-up, Mr. Dolcini, on the drought relief 

again, affecting California. What does the backlog look like for 

California on catching up to what some of the ranchers need there 

for what we spoke about earlier? 

Mr. DOLCINI. Sir, I am going to have to get back to you on that. 

I don’t know exactly what the backlog is today. 

Mr. LAMALFA. Okay. Well, we do appreciate your efforts to move 

the resources around and get that caught up. It is very important 

to our folks up in my area, as well as in the Midwest too. 

Following up with Mr. Willis again. Thank you for your previous 

answers on that. So we worked with you on designing a plan for 

2016 so that rice would not be caught in this price discovery problem, and relying upon maybe what is seen as traditional price data, 

since 2015 is out the window for us here, that we can make that 

available so they have a revenue policy for 2016. 

Mr. WILLIS. Yes, sir. And one thing just to let you know about. 

Immediately after this happened, we actually—some of the work on 

the farm bill, some of the information—we have some—a contract 

with some individuals who provide assistance to us, and one of 

those happens to have some good knowledge of this industry. We 

have reached out to them asking them for some input as well. So 

we want to find a solution, and we are already trying to take some 

steps that will lead to the solution that we all want to have. 

Mr. LAMALFA. Okay. We may need to be a little outside of the 

box on price discovery, otherwise you can be at any coffee shop in 

rice country and hear a lot about price and get information there. 

That is kind of a joke, so anyway, thank you. I appreciate it. 

Mr. Chairman, I will yield back. 

The CHAIRMAN. I thank the gentleman. I would request that any 

further questions be submitted for the record. 

To the Ranking Member, Mr. Walz, thank you, and if you have 

any final thoughts. 

Mr. WALZ. Just thank you both for being here. And again, I want 

to express my sincere appreciation to you and your team, and to 

those folks out in those FSA offices in the country. I know they are 

doing good work. And I did want to associate myself with the gentleman from Alabama on the crop insurance issue. We are appreciative of the Administration’s suggestion on crop insurance, and 

that it is our job to try and look those things through. I think there 

are certainly things we will look at, but I do think I associate with 

the gentleman, we are very proud of the crop insurance program 

and it seems to be working the way we kind of intended. So we appreciate that. But thank you both. It has been very helpful. I think 

this working relationship and the partnership, attitude that you 

35 

obviously have benefits our producers greatly, so thank you for 

that. 

And with that, I yield back. 

The CHAIRMAN. I thank the Ranking Member. I would like to associate myself with his comments, and also add that certainly, it 

is our intent to make sure that we have established an ongoing dialogue, going forward, to address any bumps in the road that we 

may encounter, but I also want to commend both of you and the 

work that you and your agencies have done to this point. Whatever 

we can do as a Committee, as individual Members, we certainly 

want to make ourselves available to you to make this implementation as smooth, efficient, and productive as we possibly can. Once 

again, thank you for being here. We appreciate your time. 

With that, this Subcommittee on General Farm Commodities and 

Risk Management hearing is adjourned. 

[Whereupon, at 10:38 a.m., the Subcommittee was adjourned.] 

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