```

[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

  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

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 ______

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                        COMMITTEE ON AGRICULTURE

                  K. MICHAEL CONAWAY, Texas, Chairman

RANDY NEUGEBAUER, Texas,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
BOB GOODLATTE, Virginia              DAVID SCOTT, Georgia
FRANK D. LUCAS, Oklahoma             JIM COSTA, California
STEVE KING, Iowa                     TIMOTHY J. WALZ, Minnesota
MIKE ROGERS, Alabama                 MARCIA L. FUDGE, Ohio
GLENN THOMPSON, Pennsylvania         JAMES P. McGOVERN, Massachusetts
BOB GIBBS, Ohio                      SUZAN K. DelBENE, Washington
AUSTIN SCOTT, Georgia                FILEMON VELA, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHELLE LUJAN GRISHAM, New Mexico
SCOTT DesJARLAIS, Tennessee          ANN M. KUSTER, New Hampshire
CHRISTOPHER P. GIBSON, New York      RICHARD M. NOLAN, Minnesota
VICKY HARTZLER, Missouri             CHERI BUSTOS, Illinois
DAN BENISHEK, Michigan               SEAN PATRICK MALONEY, New York
JEFF DENHAM, California              ANN KIRKPATRICK, Arizona
DOUG LaMALFA, California             PETE AGUILAR, California
RODNEY DAVIS, Illinois               STACEY E. PLASKETT, Virgin Islands
TED S. YOHO, Florida                 ALMA S. ADAMS, North Carolina
JACKIE WALORSKI, Indiana             GWEN GRAHAM, Florida
RICK W. ALLEN, Georgia               BRAD ASHFORD, Nebraska
MIKE BOST, Illinois
DAVID ROUZER, North Carolina
RALPH LEE ABRAHAM, Louisiana
TOM EMMER, Minnesota
JOHN R. MOOLENAAR, Michigan
DAN NEWHOUSE, Washington

                                 ______

                    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             TIMOTHY J. WALZ, Minnesota, 
RANDY NEUGEBAUER, Texas              Ranking Minority Member
MIKE ROGERS, Alabama                 CHERI BUSTOS, Illinois
BOB GIBBS, Ohio                      GWEN GRAHAM, Florida
AUSTIN SCOTT, Georgia                BRAD ASHFORD, Nebraska
JEFF DENHAM, California              DAVID SCOTT, Georgia
DOUG LaMALFA, California             JIM COSTA, California
JACKIE WALORSKI, Indiana             SEAN PATRICK MALONEY, New York
RICK W. ALLEN, Georgia               ANN KIRKPATRICK, Arizona
MIKE BOST, Illinois
RALPH LEE ABRAHAM, Louisiana

                                  (ii)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                             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

 
  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 
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 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 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 
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.
    [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 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 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 
Department 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 spring-planted 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 premium, 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 approximately $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 addendum, 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 approximately 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 
mid-March, 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.
    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 buy-up 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 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. 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 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.
    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 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.
    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.
    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 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 multi-pronged 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 flexible, 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 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.
    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.
    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 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 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.
    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 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 Cotton Council for some time now to provide a 
system that allows for an accurate recording of marketing loans 
and LDPs in real-time----
    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 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.
    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. 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 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.
    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 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 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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