U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

89–169 PDF 2003

S. HRG. 108–109

TO REVIEW THE IMPLEMENTATION OF THE 2002

FARM BILL

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

MAY 14, 2003

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry

(

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

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

THAD COCHRAN, Mississippi, Chairman 

RICHARD G. LUGAR, Indiana 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

PETER G. FITZGERALD, Illinois 

SAXBY CHAMBLISS, Georgia 

NORM COLEMAN, Minnesota 

MICHEAL D. CRAPO, Idaho 

JAMES M. TALENT, Missouri 

ELIZABETH DOLE, North Carolina 

CHARLES E. GRASSLEY, Iowa 

TOM HARKIN, Iowa 

PATRICK J. LEAHY, Vermont 

KENT CONRAD, North Dakota 

THOMAS A. DASCHLE, South Dakota 

MAX BAUCUS, Montana 

BLANCHE L. LINCOLN, Arkansas 

ZELL MILLER, Georgia 

DEBBIE A. STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

MARK DAYTON, Minnesota

HUNT SHIPMAN, Majority Staff Director 

DAVID L. JOHNSON, Majority Chief Counsel 

LANCE KOTSCHWAR, Majority General Counsel 

ROBERT E. STURM, Chief Clerk 

MARK HALVERSON, Minority Staff Director 

(II) 

(III)

C O N T E N T S 

Page

HEARING(S):

To Review the Implementation of the 2002 Farm Bill ......................................... 01

Thursday, July 26, 2003

STATEMENTS PRESENTED BY SENATORS 

Cochran, Hon. Thad, a U.S. Senator from Mississippi, Chairman, Committee 

on Agriculture, Nutrition, and Forestry ............................................................. 01

Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member, Committee 

on Agriculture, Nutrition, and Forestry ............................................................. 05

Coleman, Hon. Norm, a U.S. Senator from Minnesota ........................................ 02

Conrad, Hon. Kent, a U.S. Senator from North Dakota ...................................... 03

Crapo, Hon. Mike, a U.S. Senator from Idaho ...................................................... 04

Lugar, Hon. Richard G., a U.S. Senator from Indiana ......................................... 27

Nelson, Hon. Ben, a U.S. Senator from Nebraska ................................................ 21

Stabenow, Hon. Debbie, a U.S. Senator from Michigan ....................................... 24

Talent, Hon. James, a U.S. Senator from Missouri .............................................. 23

WITNESSES 

Veneman, Hon. Ann M., Secretary of Agriculture, U.S. Department of

Agriculture, Washington, DC, accompanied by J.B. Penn, Under Secretary, 

Farm and Foreign Agricultural Services; Bruce Knight, Chief, Natural

Resources Conservation Service; and Keith Collins, Chief Economist, U.S. 

Department of Agriculture, Washington, DC .................................................... 07

APPENDIX 

PREPARED STATEMENTS: 

Leahy, Hon. Patrick ......................................................................................... 99

Letters to Hon. Debbie Stabenow .................................................................... 66

Stabenow, Hon. Debbie .................................................................................... 93

Veneman, Hon. Ann M. .................................................................................... 42

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Baucus, Hon. Max ............................................................................................ 102

QUESTIONS AND ANSWERS: 

Cochran, Hon. Thad ......................................................................................... 109

Harkin, Hon. Tom ............................................................................................ 172

Baucus, Hon. Max ............................................................................................ 196

Chambliss, Hon. Saxby .................................................................................... 106

Conrad, Hon. Kent ........................................................................................... 161

Crapo, Hon. Mike ............................................................................................. 111

Daschle, Hon. Thomas ...................................................................................... 162

Grassley, Hon. Charles .................................................................................... 202

Leahy, Hon. Patrick ......................................................................................... 120

Miller, Hon. Zell ................................................................................................ 198

Roberts, Hon. Pat ............................................................................................. 153

Talent, Hon. James .......................................................................................... 168

(1)

HEARING TO REVIEW THE IMPLEMENTATION 

OF THE 2002 FARM BILL 

WEDNESDAY, MAY 14, 2003

U.S. SENATE,

Committee on the Agriculture, Nutrition and Forestry, Washington, DC 

The committee met, pursuant to notice, at 2:10 p.m., in room 

SR–328A, Russell Senate Office Building, Hon. Thad Cochran, 

[Chairman of the Committee], presiding. 

Present or submitting a statement: Senators Cochran, Lugar, 

Coleman, Crapo, Talent, Harkin, Leahy, Conrad, Daschle, 

Stabenow, Nelson, and Dayton. 

STATEMENT OF HON. THAD COCHRAN, A U.S. SENATOR FROM 

MISSISSIPPI, CHAIRMAN, COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

The CHAIRMAN. The hearing of the Agriculture Committee will 

please come to order. We have a vote in progress over on the floor 

of the Senate and some of our Senate members are there on the 

floor for that purpose, but we will begin and give senators an opportunity to make opening statements and then proceed to hear 

from the Secretary. 

We are very pleased that the Secretary is here with others from 

the department to discuss the implementation of the Farm bill that 

was passed last year. Ann Veneman has been doing an excellent 

job, in my opinion, as Secretary of Agriculture and so has the team 

she has assembled at the Department of Agriculture to assist her. 

Dr. J.B. Penn, Under Secretary for Farm and Foreign Agricultural 

Services is here with her today, Mr. Bruce Knight, chief of the Natural Resources Conservation Service, and Dr. Keith Collins, who is 

the chief economist for the department. We welcome all of you. 

We know this is a very challenging opportunity to implement 

some new programs to help landowners and those involved in production agriculture in our country. There are some new complications because of options that are given to farmers to help decide 

how their benefits will be made available. The Farm Service Agency county offices have had their workloads increased enormously. 

Then we had the passage of disaster assistance legislation and the 

sign-up for the Conservation Reserve Program for them to deal 

with, as well. 

We appreciate the work that all of you have been doing to ensure 

that the benefits and opportunities of the Farm bill are made available to those entitled to those benefits. There is an 80 percent inVerDate 0ct 09 2002 09:41 Sep 12, 2003 Jkt 089169 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\89169.TXT SAG1 PsN: TOSH
2

crease in authorization for conservation spending, for example, and 

the majority of those program funds are on working lands. This increase in funding possibilities comes with the increased need for 

technical assistance, which I know the Natural Resources Conservation Service is working to make available. 

I was encouraged recently when I saw that Dr. Collins had indicated some good news in the economic outlook for agriculture in 

our country, suggesting that we would see an increase of about 11 

percent in net cash income for farmers this year as compared to 

last year and that exports were likely to increase by 7 percent to 

a level of $57 billion, which is the highest level of farm exports 

since 1997. We hope that the work that the department can do in 

implementing the Farm bill will help assure that those expectations turn into realities. 

With that note, I am happy to yield to my friend Senator Coleman for any opening statement that he would like to make. 

STATEMENT OF HON. NORM COLEMAN, A U.S. SENATOR FROM 

MINNESOTA 

Senator COLEMAN. Thank you. Thank you, Mr. Chairman. I want 

to thank you for holding this important hearing on the implementation of the Farm Security and Rural Investment Act of 2002 and 

I also want to join in thanking Secretary Veneman and Dr. Penn 

and Mr. Knight and Dr. Collins for appearing before us today. 

Since I was not here to vote for the 2002 Farm bill, I have the 

luxury of prefacing my remarks by saying that I fully support the 

provisions of the Farm bill that Minnesota farmers like and, of 

course, I adamantly oppose the provisions they do not. 

In any case, America’s farmers have had some challenging times 

in recent years—the lowest real net cash income since the Great 

Depression, record low prices, record high cost of production, foreign tariffs and subsidies five and six times than our own, and the 

sheer strength of the U.S. dollar vis-a-vis our foreign customers 

and competitors. I believe a strong safety net for our farmers is 

needed and I believe the 2002 Farm bill provides some certainty for 

Minnesota farm families in uncertain times. 

I commend President Bush for fully funding the Farm bill in his 

budget and I was pleased to join Senator Lincoln in successfully 

working to ensure that the budget resolution we recently passed 

did the same. 

I understand from USDA, as the chairman has noted, that things 

may be looking up a little this year in terms of some commodity 

prices, and that is encouraging. There are some things that Congress can and should do, however, to help move things along for 

our farm families in rural America. Passing an energy bill with a 

strong renewable fuel standard and providing tax relief for our 

farm families would raise commodity prices while lowering their 

costs, and I am happy to be a part of both these efforts. 

President Bush’s decision to file a case with the WTO against the 

EU yesterday for its illegal ban on biotech agriculture is very important to my farm families and I appreciate the President’s strong 

leadership on this issue. I encourage the administration to take the 

same strong stand with regard to the recent back-pedaling by 

Mexican on its commitments under NAFTA. 

3

All that aside, we are here to discuss the Farm bill’s implementation 1 year and 1 day after its enactment and on the whole, I believe the administration has done a good job and deserves high 

marks for undertaking an awful lot of work without much time to 

get it done, particularly with the added workload from the disaster 

assistance package. 

I want to especially thank John Munson, Minnesota’s state SFA 

director, the state SFA committee and all the Minnesota SFA team, 

both in St. Paul and in the field for their hard work, dedication, 

and effort in serving Minnesota farm families. Of course there are 

a few things here and there that might be tweaked to better serve 

the farmer and I will not be bashful talking with the department 

about how to fix those things. 

Again on the whole, Mr. Chairman, Madam Secretary, you and 

your team have done a commendable job. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Conrad is recognized for any opening statement that you 

would care to make. 

STATEMENT OF HON. KENT CONRAD, A U.S. SENATOR FROM 

NORTH DAKOTA 

Senator CONRAD. Thank you, Mr. Chairman. First of all, thank 

you for holding this hearing, another one on the implementation of 

the Farm bill. 

Welcome, Madam Secretary and other representatives—Mr. Collins, Mr. Penn, Mr. Knight. 

Last fall’s hearing on farm bill implementation focussed on a 

number of unresolved issues. Since that hearing I am glad we have 

finally been able to resolve the issue of loan rates for minor oilseeds and pulse crops but it is unfortunate we had to bring bipartisan pressure on the department to equalize loan rates for minor 

oilseeds and it is very disappointing that we had to actually push 

through legislation, again on a bipartisan basis, to force the department to follow the original intent of Congress in carrying out the 

new loan program for pulse crops. As I said, I am pleased we have 

finally put those two issues behind us. 

However, in my view there remains a major piece of unfinished 

business with regard to implementing the Farm bill as Congress 

intended and that has to do with the interest rate for sugar loans. 

As we know, the 1996 Farm bill imposed a 1 percent interest rate 

surcharge on price support loans issued for sugar and other commodities. However, in the 2002 Farm bill Congress very specifically 

repealed the interest rate surcharge as it applied to sugar. I know 

because I wrote the new provision. The actual language of the new 

law very specifically exempted sugar from the interest rate surcharge and the conference report. Statement of managers declared 

that the new law ‘‘makes Section 163 of the FAIR Act inapplicable 

to sugar.’’

Even USDA agrees on that fundamental point. In its final rule 

governing operation of the sugar program, as published in the Federal Register on August 26 of last year, USDA said the following. 

‘‘The 2002 Act eliminates the requirement that CCC add 1 percentage point to the interest rates as calculated by the procedure in 

4

place in 1996 but does not establish a sugar loan interest rate. 

CCC has decided to use the rates required for other commodity 

loans.’’ In other words, the department admits that Congress repealed the surcharge but the department does not seem to care. 

USDA is going to hit farmers with this surcharge anyway. That, 

to me, is a gratuitous penalty and it is gratuitous in terms of its 

disregard for the clear intent of Congress. 

This provision, like others that we had to reverse, was paid for 

in the Farm bill. In the case of the interest rate on sugar loans, 

repeal of the sugar surcharge costs $5 million over 10 years. That 

was scored against the bill and we met that cost. As we saw with 

minor oilseeds and pulse crops, the department is attempting to 

undermine the law by administrative fiat. 

When we get to the point of asking questions, Mr. Chairman, I 

am going to ask the Secretary about this matter. I advised her in 

our call the other day that we would have a chance to visit about 

this. I am hopeful that this can get resolved. 

With that, I thank very much the chairman for again calling this 

hearing and for this time. 

The CHAIRMAN. Thank you, Senator. 

Senator Crapo, you are recognized for any opening statement 

that you would like to make. 

STATEMENT OF HON. MIKE CRAPO, A U.S. SENATOR FROM 

IDAHO 

Senator CRAPO. Thank you very much, Mr. Chairman. I will be 

brief. I, too, appreciate you holding this hearing. As yesterday 

marked the 1-year anniversary of the signing of the 2002 Farm bill, 

I appreciate Secretary Veneman being here with us today to discuss the implementation of this very important law. 

Secretary Veneman, I want to commend you and the many 

USDA employees who have worked diligently to implement the 

new law. Idaho farmers and ranchers have been well served by the 

many local USDA employees who continue to work very hard on 

their behalf. Additionally, I appreciate the department’s efforts to 

work with growers and commodity groups throughout the implementation process to get their input on various aspects of the programs. Cooperation and communication with the agriculture industry and the department will better ensure that the law is responsive to the needs of our nation’s farmers and I recognize your effort 

to ensure that the farmers and ranchers have a voice in that process. 

While throughout the process certain concerns remain to be addressed, some of which I will raise during questioning today, overall I have been very impressed with your dedication in getting this 

immense law implemented in a timely manner. I do want to interject right here that I share the concerns that Senator Conrad has 

just raised with regard to the sugar loan program and hope that 

we can get that issue resolved. You and I have discussed that before. 

Further, while the Farm bill makes great strides to ensure the 

longevity of American agriculture, our high quality, world renowned agriculture products continue to face trade barriers that 

stifle the ability of farmers to remain competitive. I appreciate the 

5

administration’s efforts to work to expand foreign market opportunities and I encourage the department to continue to work to ensure that American agriculture interests are at the forefront of 

these trade negotiations. We have to make sure that new trade 

agreements bolster and do not hinder the ability of farmers and 

ranchers to compete in domestic and foreign markets. 

Again I want to thank you for your hard work in implementing 

the law. There will be issues that we will need to continue to work 

on, but I believe that you have done a yeoman’s effort and that 

your progress is to be commended. I look forward to working with 

you in the future as we ensure that the farm programs are best 

crafted to meet the needs of our nation’s farmers and ranchers. 

Thank you. 

The CHAIRMAN. Thank you, Senator Crapo. 

I am pleased that the senator from Iowa, Senator Harkin, who 

is the ranking Democratic on the committee, is here. We had a vote 

on the floor of the Senate and it delayed some of us from getting 

here but Senator, I would be happy to recognize you for any opening statement you would care to make at this time. 

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

IOWA, RANKING MEMBER, COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

Senator HARKIN. Thank you very much, Mr. Chairman, and I 

apologize for being a little late. I thank you for having this hearing 

to talk about the implementation of the Farm bill. 

Madam Secretary, good afternoon. I am pleased that you could 

be here with your staff. 

A year ago yesterday, I am sure it has been noted, President 

Bush signed the bipartisan 2002 Farm bill into law after he made 

a very strong statement of support at the White House. He underscored the law’s importance to farmers, the rural economy, and specifically he cited the landmark conservation provisions of the Farm 

bill. The 2002 Farm bill, as passed, represented a great boost for 

producers, the environment and rural America. 

As we have seen, those parts of the Farm bill that were implemented early and well have proven a success. We are also seeing 

positive results from the new policies and increased funding for 

conservation, rural development, renewable energy, nutrition, trade 

and research. Despite some fits and starts, it now appears that 

over 94 percent of eligible farmers have made their base and yield 

elections, as anticipated in the Farm bill. Madam Secretary, I commend you and the personnel at the department and all your field 

offices for your hard work in implementing these titles of the Farm 

bill. 

Despite these successes, too many of the more innovative initiatives in the Farm bill remain on the shelf as a result of inaction, 

delays, and misapplication of the law. Too often the administration 

seems to create a Herculean task where, in fact, a clear path lies 

to the intended result in the legislation, and these have had really 

negative effects on producers in rural America. These conservation, 

rural development and energy programs, implemented as directed 

in the Farm bill, hold great promise for us. 

6

Unfortunately, funding for Farm bill conservation programs 

turned out to be far less than anyone anticipated after the singing 

of the Farm bill. The promise of the conservation title has been 

limited by an inexplicable reading of the Farm bill’s funding for 

conservation technical assistance. As a result, almost $160 million 

less will go to conservation in this fiscal year than the Farm bill 

provided and there will be similar shortfalls in future years if this 

reading is not reversed. 

Further, implementation of probably the most greatly anticipated 

and innovative program, the Conservation Security Program, is 

also behind schedule, but we discussed that in a previous meeting. 

As for rural development, virtually nothing has been done to 

carry out the Rural Business Investment Program, which was designed specifically to bring critically needed equity capital to rural 

communities, and I would like to have you address that in the 

question-and-answer period. 

For the first time the Farm bill included an energy title, for the 

first time ever, but USDA is still far from finalizing guidelines for 

Federal agencies to purchase bio-based products, which is one of 

the key provisions in the title. In fact, there is a demonstration 

going on down on the Mall right now with soy-based diesel. You 

probably saw it; it is down by your place down there, all the cars 

and stuff with soy diesel. 

Since the Farm bill was signed we have a budget that would 

undo much of the promise that the Farm bill held, and the budget 

proposes to drastically reduce or even eliminate funding for several 

rural development energy and conservation programs that were 

fully funded in the Farm bill. 

Again we all have a common goal and that is the successful implementation of the Farm bill. As you said when the bill was 

signed, you and your staff are ‘‘strongly committed to ensuring 

timely and efficient implementation during the coming months.’’

Again I do not want to discount the work that you have put into 

it so far. I know there have been new things in the Farm bill; I 

know it has taken time; I understand that. I just hope that we can 

work together to close some of the gaps that still exist that are out 

there in rural development, in the Rural Equity Fund, and working 

with the administration, getting some suggestions for you on how 

we get over that hurdle on the technical assistance problem that 

we have. 

Thank you very much for being here. Thank you very much, Mr. 

Chairman, for having the hearing. 

The CHAIRMAN. Thank you, Senator. 

Madam Secretary, we appreciate again your being here. We have 

a copy of the statement that you have prepared and we will have 

that printed in the record in full and invite you to make any comments that you think would be helpful to the committee’s understanding of the work the department is doing to implement the 

new Farm bill. You may proceed. 

7

STATEMENT OF HON. ANN M. VENEMAN, SECRETARY OF

AGRICULTURE, U.S. DEPARTMENT OF AGRICULTURE,

WASHINGTON, DC, 

ACCOMPANIED BY J.B. PENN, UNDER SECRETARY, FARM AND

FOREIGN AGRICULTURAL SERVICES; 

BRUCE KNIGHT, CHIEF, NATURAL RESOURCES CONSERVATION

SERVICE; AND 

KEITH COLLINS, CHIEF ECONOMIST, U.S. DEPARTMENT OF

AGRICULTURE, WASHINGTON, DC 

Secretary VENEMAN. Well, thank you very much, Mr. Chairman 

and Senator Harkin and the other distinguished members of the 

committee. We appreciate the opportunity to be here today to discuss the implementation of the Farm Security and Rural Investment Act of 2002. As has been noted several times already, it was 

just 1 year ago yesterday that that bill was signed into law by the 

president. 

As you indicated, Mr. Chairman, I do have a formal statement 

and we do appreciate the fact that you have agreed to make it part 

of the record. I would like to summarize my statement and then 

we will be happy to take your questions. 

I am pleased that we have with us today many people who have 

worked on the implementation of the Farm bill but here at the 

table with me is the Under Secretary for Farm and Foreign Agricultural Services, Dr. J.D. Penn, our chief economist, Keith Collins, 

and our chief of the NRCS, Bruce Knight. They have all been very 

involved in the implementation process. 

What I would like to do is first make some general remarks 

about the challenges the department has met in implementing this 

farm bill and then discuss some of the accomplishments of the past 

year and conclude with some comments on the status of the implementation of the Agricultural Assistance Act of 2003. 

Our No. 1 goal over the past year has been to implement the 

Farm bill provisions as quickly and efficiently as possible. I am 

very pleased and I am proud of the progress that the department 

has made to meet this goal. A major challenge was the late passage 

of this new complex bill and the fact that many of the provisions 

were applicable in the same year that the bill passed. Fortunately, 

the department was actively engaged in preparing for a new bill 

before it was passed, so as soon as it was enacted we moved quickly to go into high gear to implement it. 

We established an internal working structure by putting together 

a board of directors that was made up of the subcabinet and then 

a working group that was co-chaired by Keith Collins, Scott Steele 

of our Budget Office and Hunt Shipman, who now works for the 

chairman. They did a terrific job of coordinating the resources of 

the department and to coordinate the department-wide implementation of the nearly 500 separate actions that we identified to implement the bill’s provisions. 

Also, as has been noted, our staff throughout the country has 

been working tirelessly and aggressively to implement the new provisions and get the benefits flowing to producers and other program 

participants. I know you would want to join me in expressing our 

great appreciation to all the hard-working USDA employees, as you 

have, all over the country who have put so much time into impleVerDate 0ct 09 2002 09:41 Sep 12, 2003 Jkt 089169 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\DOCS\89169.TXT SAG1 PsN: TOSH
8

menting this bill. It is important that we do especially recognize 

our county-based employees who have been on the front line of 

sign-up and program delivery. Literally thousands of USDA employees have played a part in these efforts and I am incredibly 

proud of everybody on our team. 

We also want to thank the Congress for providing the funding to 

implement the Farm bill. We’re making good use of the funds to 

hire temporary staff and make technological improvements to help 

facilitate the sign-ups going on for all the Farm bill programs, as 

well as for the newly authorized disaster assistance programs. 

We have made extensive efforts to keep the Congress, the general public and stakeholders informed at every step of the way. 

Based on congressional and stakeholder input we have received 

over the past year, we were able to fine-tune and make some adjustments where needed to meet constituent needs and the intent 

of Congress. 

Throughout the implementation effort USDA has focussed on 

customer service and a commitment to ensuring that all customers 

are treated equally and fairly. We held numerous farm bill sessions 

across the country and in Puerto Rico to reach out to a full spectrum of USDA customers. To date, over $8 billion in new commodity program payments have been issued to agricultural producers during the first year of the Farm bill. Due in part to these 

payments, net farm income prospects will improve in 2003. 

The Farm bill, along with the new Agricultural Assistance Act of 

2003 and other on-going USDA programs, is providing immediate 

relief for producers dealing with financial stress and these efforts 

will continue. Also, the administration is strongly urging the Congress to enact an economic stimulus package to get the economy 

moving faster. This undoubtedly will also have a pay-off in farm 

country. 

We would now like to focus in more detail on some of the key 

accomplishments of the various titles of the bill. First, Title I. All 

of the key commodity program provisions have been implemented 

efficiently and in a timely manner. These include direct and countercyclical payments, marketing assistance loans, crop bases and 

yield election, Milk Income Loss Compensation or what we refer to 

as the MILC program, dairy price support program, and the apple 

market loss assistance. A sugar marketing allotment program was 

established and all changes to the sugar loan program have been 

implemented for fiscal year 2003. 

A new peanut program was implemented with direct and countercyclical payments, marketing assistance loans, and a buy-out 

program for current peanut quota owners. New marketing assistance loans were provided for peas, lentils, chickpeas, honey, wool 

and mohair. As prescribed by the Farm bill legislation, the Payment Limitation Commission has been established. It has been 

meeting regularly and is working on its report to Congress. It is 

chaired by our chief economist, who is here with us today, Keith 

Collins. 

Turning to conservation, we are very pleased with the important 

changes in conservation policy made in Title II. The regulatory effort needed to implement these programs is an enormous undertaking. I am happy to report that rulemakings have been comVerDate 0ct 09 2002 09:41 Sep 12, 2003 Jkt 089169 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\89169.TXT SAG1 PsN: TOSH
9

pleted to continue conservation programs reauthorized in the Farm 

bill, such as the Wetlands Reserve Program, the Wildlife Habitat 

Incentives Program, the Farm and Ranchland Protection Program, 

and the Agricultural Management Assistance Program. We have 

also finalized the rule for the Conservation Reserve Program and 

began general sign-up for that program on May 5. 

Our primary focus recently has been ensuring that the fiscal year 

2003 funding authorized by the Farm bill is allocated to these programs. We recently announced that funding allocations totaling 

more than $1.8 billion in financial and technical assistance have 

been made available to farmers and ranchers for both farm bill and 

non-farm bill programs. This includes the state allocations for 

EQIP totaling $562 million. The final EQIP rule will be published 

very soon, which will give agricultural producers the opportunity to 

enroll in what has become one of the department’s largest and 

most important conservation programs. Applications will be evaluated with priority given to those that are most cost effective and 

address national, state and local priorities. 

We also announced the release of $53 million through the ground 

and surface water conservation provision under the Environmental 

Quality Incentives Program to provide cost-share and incentive 

payments to producers in 17 states that have been severely impacted by the drought. 

Further, we will soon initiate the first sign-up for the Grasslands 

Reserve Program and have issued a notice of funding availability 

to get a limited program up and running for 2003. We will then go 

through the formal rulemaking process in developing the 2004 program. 

We are also making steady progress on developing the proposed 

rule for the Conservation Security Program. The department was 

given very broad discretion to establish the program requirements. 

Given that, we thought it was necessary to seek broad public comment on the design of the program before we issued a proposed 

rule. We are now reviewing some 4,500 comments as we work on 

this rule. 

Good progress is also being made in implementing the third 

party technical service provider provision that will help us deliver 

the technical assistance needed to support the implementation of 

the conservation programs. So far, more than 400 technical service 

providers have been registered through an on-line technical service 

provider registry. 

We are also making excellent progress on the other titles of the 

Farm bill. While they may not receive as much attention as the 

commodity and conservation titles, they are no less important. 

With respect to the trade title, we are providing additional funds 

for market development activities, including the Market Access 

Program and the Foreign Market Development Cooperator Program. We are implementing the Technical Assistance for Specialty 

Crops Program and we are launching the McGovern-Dole International Food for Education and Child Nutrition Program, which 

builds on the Global Food for Education Initiative that USDA implemented during 2001 and 2002. We expect the new program to 

be fully implemented before the end of the fiscal year. 

10

In the rural development area we have awarded hundreds of millions of dollars in rural development assistance, including valueadded grants and water and waste disposal funds, and we have finalized regulations and are soliciting applications for an anticipated $1.4 billion in rural broadband loans and loan guarantees. 

Concerning the nutrition title, we are providing greater access to 

and simplification of the Food Stamp Program. We have allocated 

funds authorized for the WIC and Seniors Farmers Market Programs in 2002 and 2003. We have implemented the pilot program 

to increase fruit and vegetable consumption in schools. These pilots 

were very well received by schools and by students and we are 

looking at ways of expanding this program in the future. 

In the research area we have implemented the Senior Scientific 

Research Service, which allows the department to attract and retain the highest caliber scientists. 

For energy we have implemented the Renewal Energy Systems 

and Energy Efficiency Improvement Program and announced the 

availability of $23 million in grants. We have implemented the Biomass Research and Development Program and have announced the 

availability of $21 million in grants. We have implemented the key 

provisions to the Bioenergy Program which provides up to $115 

million in funding for fiscal year 2003. 

Also, as authorized by the Farm bill, we have established the Office of the Assistant Secretary for Civil Rights. Vernon Parker has 

been confirmed by the Senate and we appreciate the hearing that 

he had in this committee. He is providing terrific leadership on 

civil rights issues in the department and I can tell you that he is 

already working very hard to put together a long-term plan to address these issues. 

Finally, I want to give you a brief update on the $3.1 billion in 

disaster assistance that was included in the fiscal year 2003 omnibus budget package that was signed by the President on February 

27. The same day the President signed the legislation I established 

a disaster assistance working group within USDA to begin work on 

the disaster assistance programs. Their charge is very clear—to 

make implementation of disaster assistance a farmer-friendly process and to make sure the program benefits reach producers as 

quickly as possible. 

The 2000 disaster program took five and a half months. This bill 

is much more complicated and we will do it in four and a half 

months, again showing the persistence, efficiency and dedication of 

our work force in getting this job done. 

I am pleased to announce that sign-up for the tobacco crop losses 

began on March 17. Sign-up for the additional benefits associated 

with the Livestock Compensation Program began April 1. The Cottonseed Payment Program sign-up began on May 2. Sign-up for the 

Crop Disaster Program will begin on June 6. 

USDA has launched a disaster assistance implementation 

website that contains basic program information, such as announcements on program sign-up and various questions and answers, as well as comments and suggestions to encourage interested parties to provide input to USDA on how best to move implementation forward in a timely and expeditious manner. 

11

Mr. Chairman, that concludes my overview of where we currently 

stand on implementing the Farm bill. The team at USDA has 

worked very hard to implement the new Farm bill efficiently and 

responsibly to best help our farm and food sector receive its intended programs and benefits. We are committed to continuing to 

do the best job we can to deliver the programs. 

We are also committed to continuing to work with all of the 

Members of Congress and other stakeholders to ensure that the 

legislation is implemented fairly and properly. 

Thank you again for having us here this afternoon. We would 

now be very happy to respond to your questions. Thank you, Mr. 

Chairman and members of the committee. 

The CHAIRMAN. Thank you, Madam Secretary, for your excellent 

statement. 

The Farm bill that we passed last year provided opportunities for 

those who wanted to participate in the programs to update their 

base acreage and yields for the purpose of determining the amount 

of farm program payments they would receive for the 2002 and 

later crop years. That deadline for sign-up expired on April 1. 

Looking back at the process, do you feel that you can say that 

this was a fair process in terms of the familiarity that Farm Service Agency employees provided to farmers so that they could understand their options? To what extent did farmers take advantage of 

this option, if you know? 

Secretary VENEMAN. Well, Mr. Chairman, we do think we got 

large amounts of information out so that people could make informed choices about updating bases and yields. I believe about 

two-thirds of the farmers updated—well, over 50 percent updated 

their bases and yields, about 33 percent stayed with their current 

bases and yields, and there are a very few that are still in the process. 

We tried to make sure that our Farm Service Agency employees 

in the field had excellent training to be able to help farmers and 

ranchers. We provided as much information as we possibly could 

through web-based methods, questions and answers on the website. 

We had multiple farm broadcast briefings where we were able to 

get information out through Dr. Collins and Dr. Penn and other 

people who were involved in day-to-day implementation with the 

Farm bill. We had some web-based calculators that were available 

for farmers and ranchers to help them determine what was in their 

best interest with regard to the updates of bases and yields. 

I was out this week in Missouri and I was talking with our state 

FSA director out there and he said, ‘‘You know, the people out here 

are really pleased in the county offices that they were able to do 

this. A year or so ago they just did not think they could get the 

job done and everybody is pretty proud of the fact that they were 

able to get it done and do it in a very timely manner.’’

That is a real indication that the tools that were put together 

worked. We got the farmers signed up for the programs within the 

time limits allotted. The payments, we have already made over $8 

billion in financial assistance in the hands of the farmers. 

The CHAIRMAN. Thank you. I am also at this point going to ask 

you or Dr. Collins to comment on the economic outlook for farmers. 

I mentioned in my opening statement the 11 percent increase in 

12

net cash income that is expected for agriculture this year as compared to last year and the improvement in export volume by 7 percent up to an expected total for this year of $57 billion, which is 

the best performance in agriculture exporting since 1997. Are those 

numbers still looking good, Dr. Collins? 

Mr. COLLINS. Yes, Mr. Chairman, they are. You summarized 

them pretty well. The only thing I would add to that is we are seeing a better improvement in the marketplace this year. Part of it 

is driven by last year’s bad weather, which has boosted prices 

across the board. Part of it is driven by cutbacks in production by 

livestock producers who are raising livestock prices substantially. 

We are talking about an increase in cash receipts this year from 

the sale of farm products in the neighborhood of $8 billion, so that 

is showing that the market economy is, in fact, starting to improve. 

Farmland values went up 4 percent last year. We think they will 

go up slower this year, a percent and a half, although I just met 

today with a bunch of bankers who told me that is wrong, that it 

is going to go up more than 1.5 percent this year. Almost nothing 

seems to suppress the rise in farmland values every year. 

Also interestingly, despite the drop in farm income last year, we 

really have not seen a sizable increase in nonperforming loans by 

producers. By almost every lender category, nonperforming loans is 

fairly small. Take the Farm Credit System, for example. Their nonperforming loans in their loan portfolio are running about 1.3 percent or so. 

Yes, there has been financial stress. It has been spotty. It has 

been driven by bad weather, drought. It has been commodity-specific in a couple of cases, like milk, but overall the farm economy 

still seems to be hanging on fairly well. 

The CHAIRMAN. Thank you very much. 

I am going to yield now to my friend from Iowa, the distinguished senator and ranking Democrat on the committee, and I am 

going to ask all senators if we can limit our time to 5 minutes for 

this opening round of questions. Then we can come back around for 

additional rounds of questions if senators would like to ask additional questions. 

Senator Harkin. 

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

Madam Secretary, I do not plan to ask any questions on the CSP 

today. We covered that pretty well the other day. I would like to 

reiterate the widespread support for the Conservation Security Program from both environmental, sustainable agriculture and commodity groups. 

Mr. Chairman, I would just like to submit for the record two letters, one from conservation groups to Senators Bennett and Kohl, 

and one to you from major commodity groups expressing their support for CSP. Did I get a copy of that letter, too? I just wanted to 

submit those. 

Senator HARKIN. Madam Secretary, I thank you for your hard 

work in implementing the 2002 Farm bill, including the first-ever 

energy title, and trying to move these forward. I am concerned 

about one provision of great importance that really lags, and that 

is section 9002. That is the Federal procurement of bio-based products. 

13

As we all remember, in the Farm bill we put a provision in the 

Farm bill that basically mandates that all Federal departments are 

to give a preference to purchasing bio-based products as long as 

they are equivalent in price, availability, and performance, if I am 

not mistaken. I may be off a little bit there, but something like 

that. This section gives your agency the primary role in ensuring 

that the Federal Government purchases bio-based products made 

from domestic renewable agriculture or forestry materials. 

Although the statutory deadline for publishing the final guidelines has passed, USDA has not even published a draft set of 

guidelines for agencies to follow in procuring bio-based products. 

Would you please give us an update on your progress in drafting 

and issuing product guidelines, as well as the status of the biobased labeling initiative? When would this critical initiative be in 

place? 

Secretary VENEMAN. Well, thank you very much for your question, Senator Harkin. This is a program that we have been working 

very hard to implement. However, the draft regulations have taken 

longer than anticipated for several reasons, not the least of which 

is the very complicated nature of this bill including some of the 

things you talked about—comparability of price, availability, and so 

forth. How do you measure, for example, the content of bio-based 

within a product? 

There are a number of questions that have to be addressed in 

these regulations and our people have been working very hard to 

try to do that, working with the lawyers to make the proper interpretations of what the law requires. As they got into this process 

of implementing this provision a number of questions were raised 

that had to be answered and worked out through the process. That 

is why it has been taking considerably more time. 

I might ask Keith Collins to comment for a moment on this, as 

he has been involved directly in some of the meetings. 

Mr. COLLINS. Senator Harkin, you said earlier that some of these 

provisions we are not implementing with all due speed because we 

were making a Herculean task out of something that ought to be 

simple. We plead guilty to that in this case. We started out with 

just the opposite in mind, that we saw a Herculean statute that we 

wanted to implement in a simple way, so we drilled a couple of dry 

wells. We have drafted several sets of guidelines to make this program simple, fast, transparent, easy to implement, low cost to the 

private sector, low cost to us because there is no appropriation for 

us to implement it. 

That was our strategy. That is what the industry wanted. That 

is what everybody wanted. Unfortunately, that is not the way it is 

working out and the Secretary hit on what are the key reasons as 

to why. Right out of the box we ran into some very difficult problems of trying to define what are the appropriate renewable materials that are eligible to be in a bioproduct. Simple task, but try 

to answer that question for trees, for example. 

Then we had the problem of well, the Secretary has to recommend minimum bio-based content. How do you measure the biobased content in a bio-product? There really is no way to do it, so 

we suggested self-certification on the part of manufacturers and 

14

vendors. Our Office of General Counsel does not particularly like 

that approach. 

Those are the small problems. The big problem is the one that 

you mentioned. The statute says to designate an item, the Secretary must consider economic and technical feasibility, including 

life cycle costs. We do not know of any other program that has to 

consider life cycle costs. Not even the Recycle Material Program 

considers life cycle costs. 

Then, on top of that, if the Secretary designates an item, the 

statute says——

Senator HARKIN. There is a reason that was put in there, by the 

way. I remember that provision very well and there is a reason. 

Maybe other agencies and departments do not have to consider 

that. It is one of the reasons we waste a lot of money in the government. 

Mr. COLLINS. Oh, I agree with you. 

Senator HARKIN. Because we know something is cheap now but 

we keep buying it over and over. If we bought something more expensive it might last 10 years and it would be cheaper for the people of the United States. That is why we put that in there. 

Mr. COLLINS. Let me say I agree with that completely and when 

you consider life cycle costs, that is going to be the best way that 

bioproducts can compete with non-bio-based products. 

Senator HARKIN. That is true. 

Mr. COLLINS. I agree with that. My only problem is how do you 

measure it and how long does it take to measure it and who measures it and who validates it? 

In addition to that, the Secretary is required to provide information on the availability, the relative price, the functional performance, the public health effects and the environmental effects of 

each of the items she designates. 

Now these are unique responsibilities put upon the Department 

of Agriculture. Can they be done? Yes, they can be done. Are we 

going to do them? Yes, we are going to do them. Could they be done 

in the few months that the bill allowed us to do it? That is too Herculean a task. 

We are going to get there and we will be happy to meet with you, 

with the industry, with anybody, but it is not an easy thing to do. 

Senator HARKIN. I appreciate that and you have had a lot of 

other things you have had to do, too, and your answer makes common sense. I just say that if there are things that need to be 

changed legislatively or if we need to make a modification, I would 

hope that you would get those to us forthwith. 

Mr. COLLINS. It is important for us to get at least a draft out 

that the legal experts agree with and do that as soon as possible, 

so then people can see this path that we are on and if they think 

that we are making it unduly complicated, then they can respond 

either legislatively or through the comment period and that will 

help us a lot. We do have to get this first step behind us. 

Senator HARKIN. Thank you. 

I do have questions on my second round, but thank you, Mr. 

Chairman. 

The CHAIRMAN. Thank you very much, Senator. 

15

Senator Coleman, we are going to try to stay within a 5-minute 

rule for this first round of questioning so that everybody will have 

an opportunity to ask questions. Senator Coleman. 

Senator COLEMAN. Thank you very much, Mr. Chairman. Before 

I ask my question I would like to note that I share the concerns 

raised by Senator Conrad in his opening statement about the sugar 

interest rate issue and I have introduced a sense-of-the-Senate resolution on this, so we share the concerns and I am very hopeful 

that we can work with the USDA to resolve this issue. It is a very 

important issue to many of us here. 

Let me turn my focus to the issues of the Milk Price Support Program and the concern that it has not been providing the safety net 

it was intended to provide, which is namely a price floor of $9.90 

per hundredweight. Between January 2000 and April 2003, the 

class 3 price, which accounts for 85 percent of my farmers’ produc- tion, actually fell below the $9.90 price floor mandated by Congress 

in 14 out of 38 months. With milk prices where they are today and 

Minnesota dairy farmers are struggling to survive, we need to work 

on this issue. 

There were two specific proposals that I just wanted to address 

before you and get a response. One proposal is for the USDA to use 

its authority to increase the purchase price for cheese, butter and 

powder to reflect the true cost of selling surplus product to the 

Community Credit Corporation. Another proposal is to have the 

CCC actively trade on the Chicago Mercantile Exchange whenever 

the price falls to or below the price support level instead of purchasing in its current, more passive manner. 

I am told you have authority to pursue either of these approaches. Would you comment on their merits and explain whether 

you intend to take such action or any other action to prevent milk 

prices from dropping below the statutory floor? 

Secretary VENEMAN. I am going to ask Dr. Collins to comment 

on that. He has also been involved in the implementation of the 

dairy provisions. 

Senator COLEMAN. Thank you, Madam Secretary. 

Mr. COLLINS. Senator, I guess the first comment I would make 

relates to the premise that you started with in the question, and 

that is that the price of milk has not been supported at $9.90 because the class 3 price has been below $9.90. In fact, the class 3 

price has been; so has the class 4 price. 

What the statute requires us to do is to set purchase prices for 

butter, cheese, and nonfat dry milk so that a plant of average efficiency can pay, on average, at least $9.90 for milk. The best price 

series we have for what farmers are receiving for the price of their 

milk is not the class 3 minimum price under Federal orders or the 

class 4 price. It is the average price received by farmers for manufacturing-grade milk as reported by the National Agricultural Statistics Service. The most current price for the month of April is 

$9.90 a hundredweight exactly. 

You can make a case that we are doing what the law says. Does 

that mean the price of milk will be under $9.90 in some areas at 

some times? Yes, that is going to happen. 

Despite the fact that I just defended our program and the performance of it, to go to your options, we are, in fact, looking at this 

16

question of whether it costs more to deliver products to the CCC 

rather than, say, to a processor, particularly, for example, with 

cheese, which is the one you are most interested in where the class 

3 price has been so low. 

We are, in fact, reviewing that whole delivery process now, all 

the steps that a processor has to take and the requirements that 

are imposed on a processor, and trying to look at the costs of that 

to see if that, in fact, is the reason why when we buy cheese it is 

causing the return to the processor to be low enough to cause them 

to bid below $9.90 for milk. We are looking at that. We have that 

under consideration and it has not moved through the system yet. 

Regarding the second proposal you raised about USDA buying 

product off the Chicago Mercantile Exchange, that is one I cannot 

say that I have analyzed. Occasionally you do see the price on the 

Mercantile Exchange go below $9.90. I am not sure why that happens. One reason I would suggest is that when we buy cheese we 

require the seller to have the cheese graded and pay the cost of 

grading. Delivery of cheese on the Merc does not require the cheese 

be graded, so that is one reason why it can sell at less than what 

it sells to us, I suppose. 

There may be specification differences, as well. It is something 

we could look at, although I am a little reluctant to think of USDA 

as a buyer on an organized exchange where we are paying brokerage fees and things like that. What we have now is a price support 

program where we have an open door to buy product at the purchase prices that we state and that that is probably the most effective way and direct way we can effectuate that program, but it is 

something we can look at if you would like. 

Senator COLEMAN. The follow-up, and underlying both these proposals is the question of the difference between the cost of selling 

cheese on the commercial market and then selling cheese under the 

CCC purchasing program and I know some of our dairy farmers 

have talked about modernizing specifications so that they are more 

parallel to the commercial standards. 

I guess the followup question on both of these is as you are looking into this do you have a sense of timing? Do you have a sense 

of when we can get more definitive resolution on these issues? 

Mr. COLLINS. Dr. Penn and I have talked about meeting on this 

for the last week or so and we are going to do this pretty soon. 

Senator COLEMAN. I would appreciate that. 

Mr. COLLINS. We will make a decision one way or the other pretty soon. 

Senator COLEMAN. Thank you very much. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Conrad. 

Senator CONRAD. I notice that the Democratic leader has arrived, 

Mr. Chairman, and I would certainly defer to him, given the demands on his schedule. 

Senator DASCHLE. Thank you very much, Senator Conrad. 

The CHAIRMAN. Senator Daschle. 

Senator DASCHLE. Mr. Chairman, thank you very much. 

Secretary welcome and thank you. I will be very brief. I have 

three questions if I can. The first has to do with disaster assistVerDate 0ct 09 2002 09:41 Sep 12, 2003 Jkt 089169 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 C:\DOCS\89169.TXT SAG1 PsN: TOSH
17

ance. You have had to cope with a number of different situations 

around the country and we in South Dakota have had a great deal 

of uncertainty with regard to disaster assistance. Last year we had 

both the Milk Assistance Program and the Livestock Assistance 

Program and both were provided to those who were eligible for 

drought assistance and it was very helpful. 

This year, as you may know, the milk assistance is now being deducted from the livestock assistance, so you are not eligible for both 

outright, as you were last year. That has posed obviously some 

problems, given the very limited nature of this form of assistance. 

I am wondering if you could give us some indication as to why that 

is. 

Also obviously there is a question of certainty and for a lot of 

these producers that is a very important matter, having the certainty of knowing just what eligibility would be. Could you address 

that, please? 

Secretary VENEMAN. Well, Senator, we have been working very 

hard to implement the disaster legislation that was recently passed 

by the Congress. My understanding is that the statute as it was 

passed requires the deduction of the milk assistance from the livestock assistance, that the statute, the way it was constructed, required us to do it that way. I am going to have Dr. Penn explain 

it in a little more detail. 

Mr. PENN. It is my understanding that the statute clearly said 

that producers could benefit from one or the other of the programs 

but not both, so we operated the Livestock Compensation Program 

first and that caused us to have to postpone the Livestock Assistance Program until that program was concluded so that we could 

deduct from the Livestock Assistance Program any benefits that 

had been received under the earlier program. 

Senator DASCHLE. Mr. Penn and Madam Secretary, at least my 

staff have quite a different interpretation. We will have to sit down 

and try to work through this. We understand it may be budgetdriven but let us see if we cannot resolve that. 

I do not want to dominate the time. I have two other questions. 

One has to do with the country of origin labeling. Obviously there 

is a great deal of concern about what onerous implications there 

may be in regulation, either from the department or from packers 

with regard to compliance. Are you able to give us some assurance 

that there will not be the kind of onerous, burdensome regulatory 

framework for producers that will render the country of origin labeling issue relatively useless for our producers? 

As I travel South Dakota and the country, that is the concern I 

hear most, is obviously given your position, they are concerned that 

that may be the case. We appreciate your willingness to work with 

us in spite of the fact that you opposed it but can you give us some 

assurance that that will not be the case? 

Secretary VENEMAN. Yes, Senator. It is important to point out 

with regard to the country of origin labeling that we have consistently said that while we opposed country of origin labeling as the 

Farm bill was going through we had a specific statement in our administration position on that but nevertheless, it was passed by the 

Congress. We have worked to implement the provisions of the 

country of origin labeling. That required us initially to implement 

18

a voluntary program which we put in place to be followed by a 

mandatory program. 

There has been a tremendous amount of controversy about these 

provisions. As you point out, much of it is not about what the department’s regulations would require but what the various steps in 

the food chain further up are going to require from the producers 

to assure that the country of origin can be verifiable. Because of 

the disparity of opinion and the strength of the opinion, we decided 

to have a series of listening sessions throughout the country to get 

input from various interested parties. We are in the process of 

doing that right now. 

We have to do an economic analysis on this as we go forward because it is a significant rule. We will be looking for the least cost 

alternative in terms of implementation of a new regulation. 

We are going to work with the interested parties including the 

Congress, but we do have some restrictions with the way the law 

was written in terms of how we can implement this provision. 

Senator DASCHLE. Obviously it would be extremely troubling and 

disappointing if we went through all of this and found a regulation 

that was so onerous for producers that it was rendered virtually 

useless. Can we assume you will be finished by September 9, as the 

law requires? 

Secretary VENEMAN. We are on track to complete the regulations. 

Senator DASCHLE. Finally, let me just ask you about CRP. Obviously we had some software glitches and because of that, sign-up 

was delayed until it was the week before May 1. There are a lot 

of producers interested in sign-up on CRP. Is there any possibility 

we might be able to postpone the deadline to accommodate the fact 

that there were the glitches and the fact that we are right in the 

middle of planting season? 

Secretary VENEMAN. We did begin sign-up on May 5 and it is 

going through the month of May. One of the difficulties, frankly, 

with CRP sign-up was that we had the Farm bill sign-up through 

the end of April, we have the disaster assistance sign-up starting 

June 6, so the CRP sign-up was, in terms of time, strategically 

placed so that our Farm Service Agency employees would be able 

to accommodate the farmers coming in and signing up, so that they 

would not get backed up. 

We were trying to make sure that we could actually conclude the 

sign-up for all of these programs, so the timing was set so that we 

could adjust the workload for our Farm Service Agency employees 

because we were implementing the Farm bill, we did have the CRP 

sign-up, and then we did have the disaster assistance to implement, as well. 

Senator DASCHLE. I want to again thank my colleague Senator 

Conrad, and Mr. Chairman, thank you very much. 

The CHAIRMAN. Thank you, Senator. 

Senator DASCHLE. Thank you, Madam Secretary. 

Secretary VENEMAN. Thank you. 

The CHAIRMAN. I am going to go to this side of the aisle now. 

Senator Crapo. 

Senator CRAPO. Thank you very much, Mr. Chairman. 

Madam Secretary, in the interest of time I will just say I have 

been making a list here of issues being raised by other members 

19

of the committee and on a number of them I just want to say I 

agree; for example, concerns that have been raised on the sugar interest rate loan, which I assume Senator Conrad may go into further during his questioning, concerns about the technical assistance funding, on the conservation programs, the country of origin 

labeling issues and the dairy program concerns raised by Senator 

Coleman, and others, and again the minority leader’s concern about 

country of origin labeling. 

Each of those is also a concern of mine and I just wanted to be 

sure that I made that point to you. With the time I have I am 

going to go into some other questions. 

The first one is that I have a strong interest in Continuous CRP 

and CREP programs. The conservation for working lands was a 

large theme in the Farm bill’s conservation title. Continuous CRP 

and CREP provide the type of targeted enrollments that address 

the needs of working lands and frankly, do a lot to enhance our 

natural environment. Do you know how many acres will be held 

back for these programs? 

Mr. PENN. I do not have the number right on the top of my head 

but we have made allowance for that. 

Mr. KNIGHT. Two million. 

Mr. PENN. Two million acres. 

Senator CRAPO. Two million? 

Secretary VENEMAN. Two million acres. 

Mr. PENN. We have made an allowance. 

Senator CRAPO. Do you feel that that is going to be adequate to 

meet the needs of the purposes of this part of the conservation programs? 

Mr. PENN. I believe so. 

Senator CRAPO. The interim rule on CRP indicates that while the 

FSA state committees, in consultation with FSA state technical 

committees, have been granted the authority to determine the beginning of primary nesting and brooding seasons during which 

managed haying and grazing can occur, that the ending dates are 

still those that are set nationally by the FSA and the Fish and 

Wildlife Service in the 1990’s. Initially it was my understanding 

and frankly the understanding of the grazers in Idaho that both 

the beginning and the ending dates would be allowed to be set locally, which makes much more sense. Frankly, the state technical 

committees do have the more precise understanding of just how all 

of the grazing conditions come together to justify the timing of both 

going on and leaving the ground. 

The question I have is frankly, there is a little bit of surprise 

that it is now understood that the termination dates are still going 

to be the nationally set dates that were set back in the 1990’s. Are 

there any efforts under way to review the national ending dates 

and return to the policy that at least I thought we had been discussing earlier? 

Secretary VENEMAN. I have not heard of your concern. I am not 

sure that any of us have. We will be certainly happy to look into 

the issue you are raising and to work with you and your staff in 

trying to look at the various concerns that you are asking about. 

20

Senator CRAPO. Thank you. I apologize for not giving you a 

heads-up on that. This is just something that came up after we 

talked the other day and I did want to raise that issue. 

Mr. Chairman, I have a number of other questions here and because of time, I will not be able to ask them and may not be able 

to be here at the committee when we have another round. Are we 

going to be able to submit questions? 

The CHAIRMAN. Yes, Senator, we would be glad to have you submit your questions and ask the Secretary to respond within a reasonable time for the record. 

Senator CRAPO. With that understanding, Mr. Chairman, I will 

forego the rest of these questions because some of them are quite 

lengthy. I appreciate the chair and the Secretary’s accommodation. 

The CHAIRMAN. Thank you, Senator. 

Senator Conrad. 

Senator CONRAD. Thank you, Mr. Chairman. Thank you very 

much. I want to thank my colleague Senator Crapo and thank my 

colleague Senator Coleman for wading in on this sugar surcharge 

issue. 

Madam Secretary, would you acknowledge that Congress did repeal the surcharge, the interest rate surcharge on sugar? 

Secretary VENEMAN. Senator, my understanding is that the Congress repealed the requirement for the interest rate surcharge. 

However, in so doing—and we talked about this just yesterday and 

I told you I would talk to our lawyers and try to understand it better. My understanding from our lawyers is that in repealing the requirement for it, it left it as a discretionary matter for the department to decide. 

In addition to what the language said, this surcharge was initially put on, it is my understanding, during the 1996 Farm bill as 

a way to establish some additional funding for the farm programs. 

In the scoring of this particular provision it was scored at zero in 

the Farm bill, which because it was, in the opinion of our lawyers, 

then a discretionary matter with no scoring, in the discretion of the 

department they decided to leave the surcharge in place because 

their opinion is that we did have the discretion to do that. 

Senator CONRAD. You know, I hope you get some new lawyers. 

This is what the department itself said. ‘‘The 2002 act eliminates 

the requirement that CCC add 1 percentage point to the interest 

rate as calculated by the procedure in place in 1996 but does not 

establish a sugar loan interest rate.’’

Now why ever would we have repealed it if we did not intend for 

that to actually be implemented? You know, as the author of this 

provision, I can confirm that we got scored for it. In the internal 

scoring this cost us $5 million over the 10 years, and that had to 

be accommodated as we put together the entire package. 

We got charged for it and what I find disturbing is this kind of 

trend. We had this on the loan rate for minor oilseeds. Congressional intent was clear, you all did not follow it, we had to go 

through a harangue to get it fixed. We had the same thing on the 

pulse crops. On the pulse crops we actually had to go back on a 

bipartisan basis and legislate because you all were not implementing the clear intent of Congress. 

21

Now this is the third case where we think it is abundantly clear 

and the department has acknowledged itself that we repealed the 

surcharge and yet you turn around and reimpose it. I just think 

you are hurting yourself in terms of your relations here. You are 

hurting yourself in terms of the constituency out there who had a 

clear understanding that we had repealed that surcharge, and yet 

USDA reimposes it. 

I would just ask you to go back and give this another look. It is 

not a big deal but it is a fly in the ointment and it is easily resolved. It is not a costly measure but it does rankle and I would 

hope that you would do that. I would ask that you get back to us 

in some reasonable amount of time, if you could reconsult not only 

the lawyers but maybe some outside counsel. 

Let me say, because you and I have had many back-and-forths 

on some of these issues, I do appreciate the work of the department 

in getting the sign-up completed. This was an enormous task and 

people worked very hard in the department, out in your field offices, and they are to be commended and you are to be commended. 

We appreciate the work that was done to get that complete or virtually complete. I know it is never complete but enormous progress 

has been made. I would just hope that there would be a review of 

this issue and see if we cannot resolve that, as well. Then we would 

have really cleared the decks. 

One other thing I wanted to mention to you is this trade fight. 

You mentioned to me the other day that you and the trade Ambassador had announced a case with our European competitors. Thank 

you for doing that. Our friends in Europe are fighting tooth and 

nail to preserve the enormous benefits that they have and they are 

trying to preserve a playing field that is tilted heavily to their advantage. 

In many talks with the Europeans they have made clear to me 

that their long-term game plan is to continue to insist on equal 

percentage reductions in these unequal levels of support. We cannot let them succeed in that game plan. The French, the Germans 

and other Europeans are incredibly determined to maintain these 

unfair advantages. We cannot permit that and it is very important 

that we fight back. I thank you. 

The CHAIRMAN. Thank you, Senator. 

Senator Nelson. 

STATEMENT OF HON. BEN NELSON, A U.S. SENATOR FROM 

NEBRASKA 

Senator NELSON. Thank you, Mr. Chairman and thank you, 

Madam Secretary. I appreciate the courtesy call the other day to 

give me an opportunity to think about what I might ask. 

I would concur with what my colleague from North Dakota just 

said in terms of trade. Everywhere I go I encounter this one way 

or the other from businesses that produce products in Nebraska, 

agriculture products, manufacture products. We encounter difficulties in trade. It is not as though Nebraska is not trading. Nebraska, I have to point out, it happened during my watch and I do 

not take full credit for it but during the 8 years I was Governor 

we nearly tripled our international exports and at that point in 

time, we were helping reduce the imbalance of trade because we 

22

were exporting more than we were importing. The imports and the 

exports do not balance today and part of the reason they do not 

balance is because of unfair trade practices that we encounter in 

other parts of the world. 

I spoke to one of the ministers, Ivanoff in July about the chicken 

wars; that is the way I described it. He was not very pleased with 

the fact that I brought it up and had a different point of view about 

what Russia was doing with respect to poultry but the bottom line 

is that they are imposing restrictions and it is making it very difficult. 

The biogenetic issue. If we do not solve that internationally and 

support biogenetics here in the United States, the next thing you 

know, there will be local folks starting to put in opposition programs to that effort. As a matter of fact, I hear one of the fast food 

chains now is saying that they are not going to buy any kind of 

biogenetic food for sale. 

The whole area needs to be dealt with, particularly as it relates 

to food, from my perspective. I appreciate very much joining together with Ambassador Zoellick to bring this action. I wonder if 

we might consider and the department would consider certainly as 

it relates to agriculture products the suggestion of a process to deal 

with these trade issues in a prompt manner. We will all be a lot 

older when the WTO issue is resolved. I do not think that will be 

soon. I remember with the Canadian free wheat issue, filed a Section 20. I do not know if that has ever been resolved, but by the 

time it was resolved, many of the Nebraska wheat farmers were already tremendously disadvantaged and never really got an opportunity to recover from it fully. 

Is it possible to create a provision that we could support that 

would permit for the timely consideration and determination of 

trade disputes almost on the spot? Put them into two different levels, one that has to go through the WTO the way that we may be 

doing it there, but go back to other trade treaties or other future 

trade treaties that permits the equivalent of an umpire on the 

scene who rules immediately. I can tell you right now if those unfair trade practices can be stopped in a brief period of time you will 

see fewer of them, but everybody knows that you will have exhausted your remedies by the time you get to the end of it, whether 

it is the Canadian molasses debacle or whatever it is. 

I just wonder. I would like to get your thoughts on what we 

might be able to do together to be able to have quick resolution, 

a quick resolution provision that we can go back and try to sell to 

these trade agreements. 

Secretary VENEMAN. Well, Senator, I appreciate your comments 

and your concerns about trade because it is an issue we worked 

very hard on. Senator Conrad has left but I appreciate the support 

from both of you and so many other Members of Congress for the 

action that was taken yesterday in beginning the process against 

the European Union for their actions to not approve any more 

biotech varieties. 

It is obviously something we lost patience on. We had been trying 

for almost 5 years to work with the European Union on this. 

23

Senator NELSON. Excuse me. Which is my point. If you cannot 

get a quick resolution you can be dragged on and on and on and 

on. 

Secretary VENEMAN. I understand. Obviously we are taking action. One of the reasons that we have filed this action with the EU 

is also because we do not want to see the rest of the world go down 

this track of causing disruptions to our trade because of unjustified 

and unscientific regulations. It is very important. 

On the issue, for example, of poultry with Russia, we just recently had the Russian agriculture minster in. We have made excellent progress on that issue in terms of the sanitary issues and 

the inspection issues but again we could not take Russia to the 

WTO on this issue because they are not a member. 

We now have issues with regard to our poultry and meat with 

Russia because they are imposing quotas. We continue to work 

with them on that issue but Russia remains our largest export 

market for poultry and that is our largest export to Russia of any 

product, not just agriculture products. We have worked very hard 

on that. 

I sense the frustration and understand because we have the 

same frustration. We call them market maintenance issues. It is 

areas where we have had access to markets, we have been exporting product, and we now see restrictions. We spend a lot of time 

maintaining the markets that we have, in addition to trying to 

open up new ones through the WTO negotiations, new free trade 

negotiations. 

I appreciate your concept of putting together a process. However, 

we have dispute settlement processes through the NAFTA. That is 

part of the consultation process that the WTO and the NAFTA provisions provide. 

Senator NELSON. Excuse me. It does not seem to be timely. That 

is my point. Our frustration would be reduced dramatically if when 

one of these issues is raised you could have a quicker resolution. 

Now in an athletic event if you had to go as long to get something resolved, you would never finish a game, but there are dispute resolutions on the spot. A foul is called. Sometimes there is 

a replay in some athletic events. If there was a way to do something like that where you would agree maybe to make it a two- or 

three-tiered process, I can assure you that if it could get resolved 

quickly there would not be the kind of what I consider dislocations 

that we have right now with the European Union and with others, 

and with NAFTA. 

The CHAIRMAN. The time of the senator has expired. The game 

is over. 

Senator Talent. 

STATEMENT OF HON. JAMES TALENT, A U.S. SENATOR FORM 

MISSOURI 

Senator TALENT. Thank you, Mr. Chairman. I am a little reluctant now because I was just going to open up by echoing what Senator Nelson said; I could not agree more. 

Let me congratulate you on filing the suit. As you can tell, all 

of us are so frustrated with them and their refusal to take biotech 

food. It is as thinly disguised a protectionist maneuver as I have 

24

ever seen. When they went so far then as to actually try to convince the European countries that have famine not to take the food 

so that people starve, that is just the last straw. The message is 

we are ready to support you in any way we possibly can to go after 

them and it just comes down to that. 

I also want to thank you for your efforts in the sign-up and that 

is so important in Missouri because we are just so diverse. We have 

midwestern farms in the north part of the state in terms of commodities and then really southern-type commodities in the southern part of the state. I like to say in Missouri we have a lot of some 

things and a little bit of everything and that is true in counties. 

We just had some counties who have really struggled but I want 

to say our Missouri FSA people have done a great job and I wanted 

to say that and congratulate you. 

Then there is an issue I want to raise and it is a Missouri-specific issue, so I am not going to put you on the spot and ask you 

for an answer now, but I do want to submit it for the record and 

emphasize to you how important it is to us, not just to Missouri 

but everywhere because it has to do with rural development loan 

processing. 

You are probably aware we do all of that really for the country 

in two centers in Kansas City and St. Louis and typically there 

have been proposals to privatize that function and that is stirring 

again, because of the President’s initiative, which I support, to look 

for ways to privatize functions. I want you to consider as you consider this whether this is not an inherently government function 

because of the difference between governmental attitudes and 

standards regarding loans and private standards. 

Also, it is always my big fear with this that if it is done right, 

fine, but we can end up with a situation where we privatize this, 

we lose the pool of labor that has done it and has the expertise and 

then we find out that it is not working and we cannot put it back 

together and we have a real problem. I am going to submit to you 

some questions for the record, with the chairman’s permission, just 

to find out what your plans are and how we can work with you to 

make certain that if anything does go forward it goes forward in 

a way that is good for agriculture and good for the taxpayer, as 

well. I thank you for being here, Madam Secretary. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Stabenow. 

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

FROM MICHIGAN 

Senator STABENOW. Thank you, Mr. Chairman. 

Welcome, Madam Secretary and to all of you. I mentioned to you 

when we had a chance to talk on the phone that I had asked all 

of those who had testified at two field hearings in Michigan in 2001 

prior to the Farm bill’s completion to respond to how things are 

going and I do have a number of issues and would like to respond 

in writing so that you can have a chance to give me some feedback 

in writing, as well. 

First of all, the overall feeling is that there has been a great positive reaction to the technology that the department uses, to the 

25

website, to the efforts to get information out in a timely manner. 

There are universal compliments coming as a result of that. Also, 

the nutrition title, a great deal of positive feedback on that, as well. 

There is also positive feedback regarding the FSA employees. We 

have understaffed offices and people working overtime, as well as 

the regular department employees, but still concern about the initial sign-ups for a lot of the program crops being complicated and 

cumbersome in spite of that, but realizing people are working hard 

in that process. 

Our Michigan dairy producers have raised some of the concerns 

that have been raised before by Senator Coleman and also the executive director of Monitor Sugar Beet Growers Association, while 

indicating that the overall sugar program is going well, he did have 

concerns that were raised, similar to what Senator Conrad raised, 

as well, very concerned, assuming that this was not discretionary 

to eliminate the surcharge but that, in fact, it would be eliminated. 

We have heard that, as well, across Michigan, and I share that concern, as well. 

The major two areas though where we heard a lot of comments 

related to the Commodity Purchase Program, which I have spoken 

to you about, and also the question of conservation. We heard from 

many different people a concern about the slow advancement of 

conservation programs—from the Michigan pork producers, the 

Michigan corn growers, the Farm Bureau, Farmers Union, Michigan milk producers, all raising concerns about the technical aspects 

of EQIP but in the broader sense concerned about the security program, the Conservation Security Program. In fact, I heard comments like producers are skeptical about the government’s commitment to the Conservation Security Program. 

I wondered first, my two questions, if you would respond to what 

is a message that they are feeling that there is not a commitment 

to fully implement the CSP, and I also have letters from a number 

of groups that were sent to you just, I believe, yesterday indicating 

a real concern about not delaying or reducing the funding, not delaying the implementation of CSP. I wonder if you might tell us 

what is happening there. 

[The letters can be found in the appendix on page 66.] 

[The prepared statement of Senator Stabenow can be found in 

the appendix on page 93.] 

Secretary VENEMAN. I would be happy, too, and Senator Harkin 

and I discussed this issue quite extensively last week at the Appropriations hearing. 

First of all, let me just say that we have an absolute commitment 

to implement these programs. It is important to point out there has 

been a lot of recognition among us, as well as the members that 

are here today, that our folks have done Herculean tasks to get as 

far as we have in the Farm bill. We had to set some priorities and 

we had to start with the commodity title of this farm bill and get 

the sign-up done but we are in the process of making very good 

progress on the conservation title. 

We should have the final EQIP rule out I would say at the latest 

by the end of next week. The final rule is prepared. It is a matter 

of getting it in the Federal Register. That is good news. Same with 

the grasslands and the farm and ranchland protection. Those are 

26

three that are just in the final stages of being published as the 

final regulations and that shows some good progress in terms of 

these programs. 

As Senator Harkin and I discussed the other day, the Conservation Security Program has been an enormously difficult one to implement because there was so much discretion left in the regulatory process that we have been trying to work out the best way 

to implement this. We went out with an advanced notice of proposed rulemaking and we got 4,500 comments. That is extraordinary. It is one of the highest we have ever gotten on any kind 

of request for public comment. 

We are in the process of putting together a proposed rule now. 

We will review all of these comments and try to incorporate them 

into this process and we certainly want to do this right. That is the 

most important thing. It is a brand new program. We feel strongly 

about doing the right thing and that is why we have taken the 

time to get this kind of public input through public meetings, and 

so forth. 

Let me just say on the Commodity Purchase Program—you expressed to me the other day, interest and thanks for the apple purchases. You also expressed interest in the asparagus purchase. I 

wanted to tell you that we have purchased asparagus this year, 

$6.3 million worth, so I just thought you would like to know that. 

Senator STABENOW. That is great and that would lead to my one 

other question, and I appreciate that, that you are doing that. 

When we look at specialty crops, fruits and vegetables, they are not 

covered by much in the Farm bill and the Commodity Purchase 

Program was something that we fought very hard to get in, the additional $200 million, not $200 million in total being spent every 

year but the additional $200 million, plus I might say the Conservation Security Program, which covers farmers on working 

lands and would cover specialty crops because they have not been 

covered in other areas. These are very important things for our 

fruit and vegetable growers. 

While we appreciate the recent purchases, overall I am very concerned that we have seen purchases go down. We are seeing that 

despite the fact that the Farm bill says at least $200 million per 

year and in the actual report language it says, ‘‘The managers intend that the funds made available under this section are to be 

used for additional purchases of fruits and vegetables over and 

above the purchases made under current law and that might otherwise be made without this authority,’’ in fact, that is not happening. 

When we look at it, the 2002 USDA purchase was $189 million 

in fruits and vegetables through section 32 and it devoted, of 

course, $50 million to the DOD Project Fresh Program, which I 

support, which is very positive. When you added those numbers together, which barely met the goals of the Farm bill, but then went 

on to look at section 32 fruits and vegetables purchases in 2002 

independent of the DOD $50 million, were far below the purchases 

from 2001 and from 2000. The total section 32 bonus and entitlement spending in 2001 was $263 million and $232 million in the 

year 2000 and, in fact, again we are seeing these, in fact, go down. 

27

The purpose of the bonus program is to look at where the surpluses are. It is an effort to not only provide fruits and vegetables 

but to support those crops where they need the assistance in terms 

of surpluses. 

I am very concerned that we are not seeing the intent of this 

completed. There is a great deal of support and enthusiasm and, 

in fact, tremendous need in this area and this is the one area in 

the Farm bill, outside of the CSP, where we are really talking 

about helping specialty crops. I am very disappointed that this has 

not yet been fully implemented and I would like to know what your 

plan is to do that. 

Secretary VENEMAN. Well, let me first say that as of April of this 

year for the 2003 year, we have purchased—well, approved or 

pending approval of $135.9 million, which is well ahead of this time 

last year at $44.9 million. That is the significant difference from 

last year. Another $50 million has been approved for the DOD 

Fresh Program and we have an additional $251 million still available. 

We probably are much more on target than your numbers may 

have indicated and we are very aggressive in this program in terms 

of what we have available for spending in 2003 and the pace at 

which we are spending it. 

Senator STABENOW. You anticipate $251 million additional? 

Secretary VENEMAN. Is available for 2003. 

Senator STABENOW. You intend to——

Secretary VENEMAN. Well, as you say, we have to have the surplus determinations and the demand for the purchase, and so forth, 

but that what remains available. 

Senator STABENOW. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Lugar. 

STATEMNET OF HON. RICHARD LUGAR, A U.S. SENATOR FROM 

INDIANA 

Senator LUGAR. Thank you, Mr. Chairman. 

Madam Secretary, I join all those in complimenting the department and your leadership in the sign-up situation. Our situation in 

the Lugar farm business is anecdotal. We have 15 family members 

who are stockholders of a subchapter 5 corporation, not an unusual 

thing with two generations of people and passing along the farm. 

What we have found are some unusual requirements; for instance, a power of attorney from each of the 15 people required so 

the farm manager can be designated to participate in various aspects of the program. Not an unusual requirement, I suppose, but 

as I take a look at all the farmers in Indiana, people have not been 

involved really in getting powers of attorney and going through 

these affidavits in this fashion, but they are doing so. It simply is 

another layer of difficulty for people there. 

Likewise, an affirmation on the part of all 15 of us that we do 

not have incomes of $2.5 million over a 3-year period of time. I was 

startled that this was a requirement of the Farm bill but nevertheless, we are all swearing that we have not had that kind of income 

in the last 3 years or historically ever, collectively. 

28

I mention this because here around the committee we bear responsibility for passing the bill that you have to implement and 

there is a staggering amount of this type of thing but eventually 

it will be worked through and we compliment those in the field who 

have that responsibility finally. 

What I want to know is at the end of the day as you are working 

through the conservation, the EQIP situation—I know Senator 

Harkin has already had these queries today and before, and others—what kind of back-up in terms of demand do you perceive? In 

other words, most people have not had at it yet in terms of getting 

into new conservation efforts or EQIP and I am wondering how 

many times the funds are spoken for. Do you have any idea of the 

backlog, the line there that after the rule happens and the window 

is open, what can you anticipate? 

Secretary VENEMAN. Senator, I appreciate your questions. Let me 

just say on some of the difficulties of implementation and sign-up 

of this farm bill. I know there was a tremendous amount of frustration on a number of issues, not the least of which was power of attorney because when I traveled around the country and I heard 

that. The fact of the matter is the power of attorney had not been 

updated since the 1980’s. 

We were strongly advised that we needed, given the tremendous 

changes in this farm bill, to have powers of attorney updated because the landowners needed to have the opportunity to make decisions based upon what the new Farm bill did, and that is why the 

new power of attorney was required. 

My previous response to Senator Stabenow talked about how we 

are about to put out final regs on some of these conservation programs. Those are ready to be published in the Federal Register 

now and we continue to work on the CSP, but I am going to have 

our chief of the NRCS, Bruce Knight, address the backlog issue 

that you raised. 

Mr. KNIGHT. Senator, specifically on EQIP, our latest estimates have about a $1.4 billion backlog for a program that we are announcing today will be a little over $600 million in available funding. 

Senator LUGAR. About two and a half years at least as you look 

at it, at the same level of funding. 

Mr. KNIGHT. Yes, that is correct. We will, however, no decisions 

will be made. Each of these applications will be ranked independently based on the environmental needs of that particular application and its success, so the wait list does not change the rank on 

how these determinations are made. 

Similar backlogs exist on the Farm and Ranchland Protection 

Program, the WHIP program. Nearly every one of these conservation programs have a backlog capacity behind them. 

Senator LUGAR. You have a point scale depending upon the environmental circumstances, so you have a backlog but the candidates 

are rated according to the criteria that is in the legislation? 

Mr. KNIGHT. That is correct. Those ranking processes look a little 

bit different from state to state. For this year, in the spirit of openness, we are going to be publishing the ranking processes for each 

of the states on the web so that every farmer and rancher who is 

actually applying for EQIP can look at the ranking and know preVerDate 0ct 09 2002 09:41 Sep 12, 2003 Jkt 089169 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 C:\DOCS\89169.TXT SAG1 PsN: TOSH
29

cisely how best to fill out that application in order to be able to 

score as best as they can in the ranking process. 

Senator LUGAR. Very good. How about the conservation backlog? 

Do you have any feeling on those programs? 

Mr. KNIGHT. We do not have as much of a backlog in the Farm 

and Ranchland Protection Program. We are just about a week from 

closing the notice for applications. We expect tens of millions of dollars in backlogs on that one from the preliminary things, and the 

applications will be closing very quickly. We will have the same situation in the Wetlands Reserve Program, as well. 

Senator LUGAR. Thank you very much, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Lugar. 

Senator Dayton. 

Senator DAYTON. Thank you, Mr. Chairman. 

I will join with the others, Madam Secretary, in thanking you for 

your actions on the trade issues. 

Regarding EQIP, $600 million if I understood correctly, Mr. 

Knight, is that the amount for the entire fiscal year and you have 

$1.4 billion in backlog applications already? That means somebody 

making a current application would be considered in three fiscal 

years from now? 

Mr. KNIGHT. Each one will be considered in this particular year 

and ranked accordingly. 

Senator DAYTON. Those in the backlog, as well as the current applications? 

Mr. KNIGHT. Those in the backlog, as well as the current applicants. 

Senator DAYTON. That is the full amount of funding appropriated 

for this purpose on a pro rata basis, authorized for this purpose? 

Mr. KNIGHT. The allocations were recently sent out to the states. 

Because of some of the technical assistance issues that were discussed there was a need to hold some of that back in order to be 

able to provide for the technical assistance for all the conservation 

programs. 

Senator DAYTON. How much are you holding back? 

Mr. KNIGHT. The amounts that are going out in total in technical 

assistance for EQIP is $145 million in technical assistance for that 

program. 

Senator DAYTON. That is 20 percent of the amount for the fiscal 

years, $143 million? That is just under 20 percent. That is the 

amount that is necessary to be held back? 

Mr. KNIGHT. The technical assistance for EQIP will run a little 

bit higher than 20 percent. It will be around 23 percent. 

Senator DAYTON. Is that typical? 

Mr. KNIGHT. That has historically run a little higher than that 

and we are driving that down very rapidly, sir. 

Senator DAYTON. If that is the amount, given the demand, if you 

are going to set aside 20 percent of it for technical assistance, that 

is an awful lot of money taken out of the program for advice. How 

much advice can people need? $4 for every dollar of technical assistance? 

Mr. KNIGHT. The technical assistance involves a fairly lengthy 

list of work. It is the planning associated behind all of those conVerDate 0ct 09 2002 09:41 Sep 12, 2003 Jkt 089169 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 C:\DOCS\89169.TXT SAG1 PsN: TOSH
30

tracts. Then on an individual contract it is the work associated 

with lay-out, design, all of those types of things. 

We are working as rapidly as we can to be able to bring those 

costs down. The advancement of today’s technology and utilization 

of computers have helped a great deal in that. That is one of the 

reasons why we have been able to make any advancements—— Senator DAYTON. Is what you are calling technical assistance, is this administrative? This $143 million, to whom does that go? 

USDA? 

Mr. KNIGHT. That is what is used under the direction in the statute for the technical assistance either for the assistance costs for 

running the agency in the implementation of these or to be able to 

utilize private consultants as deliverers of that technical assistance. 

Senator DAYTON. You are taking 20 percent off the top of the program for your administrative costs and then the other 80 percent 

goes to the program, to the farmers, and you are going to try to 

bring that down? When are you going to bring that down to something that is reasonable? That is an awfully high percentage to 

take away from the program. 

Mr. KNIGHT. We are working as rapidly as we can and—— Senator DAYTON. Define to me as rapidly as you can. Is that 

something we should hold our breath about or are we talking about 

10 years from now? 

Mr. KNIGHT. We are moving very rapidly on that. 

Senator DAYTON. What is very rapidly? 

Mr. KNIGHT. Last year the technical assistance costs for the 

EQIP program hovered between 25 and 26 percent. This year we 

have that down to 23 percent and we will keep on driving those 

things down. 

Senator DAYTON. Good. Thank you. 

One point I will just make, let me go on to the country of origin 

labeling, Madam Secretary. I am concerned and I want to echo 

Senator Daschle’s comments and concerns. I hear from my producers that they are talking about—they think they are going to 

have to have an affidavit verified by three onsite inspectors and 

signed by the U.S. Attorney General that they are in this category 

or another, and the like. 

Also, as Senator Daschle said, some of these packers and the like 

are making this sound as draconian as possible and they are even 

trying to actually use, under the pretext of the program and whatever regulations you issue, to make it that way so that they can 

essentially punish farmers and probably punish some of us who 

supported it or whatever else. 

I just ask that you be explicit in your regulations as you formulate them what you are going to require and not, and that you not 

compromise the intent of it in any way but allow for some assumptions of good faith because if these kinds of documentation and 

verification in triplicate and the like that sometimes is foisted not 

by you but just by government in general, it is going to be 

crushingly unbearable for a lot of our producers. 

Secretary VENEMAN. Well, Senator, I really appreciate your concerns on this. The issues you are raising are exactly the kinds of 

issues that have come up in the process of trying to write the reguVerDate 0ct 09 2002 09:41 Sep 12, 2003 Jkt 089169 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 C:\DOCS\89169.TXT SAG1 PsN: TOSH
31

lations for the mandatory program. That is why we decided to go 

out and get as much public comment as we possibly can. 

Senator DAYTON. I commend you for doing so. 

Secretary VENEMAN. The statute is written in a way that puts 

the burden of proof onto the retailers and the packers, so it is the 

retailers and the packers that are now talking about what kinds 

of records they are going to require in order to meet that burden 

of proof. That is inherent in the statute. It is one of the issues that 

we need to discuss within the context of the statute. As I understand the law, it would not allow USDA to go in and verify the producers. That is a process that we would be verifying through the 

retailers and the packers according to the statute. 

Senator DAYTON. Well, if they are going to interpret that as requiring the kind of proof that I indicated, they are going to—maybe 

they are out to destroy the program. If they are allowed to accept 

somebody’s assertion even in writing that their product meets 

whatever those specifications, then if somebody is going to lie on 

that, that is another matter. 

Quickly because I am probably short of time here, we are taking 

up an energy bill right now and we are trying to get the rest of 

the country to understand what the potential is for ethanol and 

biofuels. I have a Ford Explorer now with an engine right out of 

the factory that can use E85, 85 percent ethanol. 

The president talked about hydrogen fuel and I respect that as 

a possibility for the future but we have something right before us 

now. It seems to me we have a chance to raise market prices so 

we can reduce the subsidies and increase the prices in the marketplace for these products. 

I guess I am asking is USDA taking a position on promoting 

these uses or what is your view on them? 

Secretary VENEMAN. Well, absolutely USDA has been very supportive of renewable fuels and the administration has been very 

supportive of renewable fuels. 

The President put together an energy task force very, very early 

in his term. One of the things that was explicitly talked about was 

the opportunities for renewal energy and the need to produce more 

sources of energy here at home. The President has been very supportive of ethanol. He did not grant the requested waiver for California, which was certainly giving the ethanol industry many more 

opportunities. 

In addition, the administration does support the renewal fuel 

standard that was proposed in the Senate energy bill. We have 

been very explicit about the administration’s support for that provision. 

I might add that we continue to see increases in ethanol production. We expect to see about 10 percent of our corn produced this 

year going into ethanol production, which is very significant. We 

are very supportive of renewal energy and industrial opportunities 

for our farmers to get new ways to get access to the marketplace. 

Let me just say in response to your question about country of origin, we do have on the USDA Agriculture Marketing Service 

website some examples of some kinds of things that AMS has put 

together in terms of some of the documentation that can be considered for proving country of origin. I would invite people who have 

32

concerns to look the what has been listed there as some possible 

suggestions and certainly still open to public comment. 

Senator DAYTON. Thank you, Madam Secretary. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Leahy. 

Senator LEAHY. Thank you, Mr. Chairman. I thank you and Senator Harkin for having this hearing. 

Secretary Veneman, I am glad to see you here. It has been sometime to be able to meet to discuss the Farm bill, so it is good to 

have you back and I know you tried reaching me. I tried reaching 

you back. I was down at Senator Long’s funeral yesterday. 

It is not a very good year in Vermont for our Vermont dairy farmers. The price is something like $1.11 on milk. We had some 

relief by the MILC program, the Milk Income Loss Compensation 

Program so I would be interested in knowing what you are going 

to do on that. 

I am, as I notified you before, disappointed that the department 

has failed to implement the regional equity provisions of the Farm 

bill. That is one that provides a minimum level of conservation 

funding for every state. 

I will put my full statement in the record if I might, Mr. Chairman, but I would like to ask these questions. 

Now that the department is fully implemented the MILC program do you believe this program is a critical component of our response to crises in the dairy markets? What is your plan for improving the price of milk? I say that because the price of milk is 

now at a 25-year low. 

Secretary VENEMAN. Senator, we have, I believe, implemented 

the milk provisions as was designed by the Congress in the Farm 

bill. Dr. Collins addressed some of the dairy income issues earlier 

but I would ask him now to just repeat some of the economic conditions with regard to dairy and some of the things that we are looking at in the department. 

Mr. COLLINS. Senator Leahy, I agree with you that we looked at 

the April price of milk and indeed it is at a 25-year low for milk, 

so for right now we would certainly say that the Milk Income Loss 

Contract Program has been an incredibly important source of income for producers. The milk payment rate right now is running 

about $1.80 a hundredweight if you are eligible to get the full payment. That certainly helps restore some of the purchasing power 

for dairy producers. 

Regarding what we are doing to help the price of milk, it is simply trying to use to the best advantage the portfolio of tools we 

have available to us, which would include, of course, the MILC program, and we would expect that to continue for its life and that 

will provide a lot of income support to producers. We also have the 

on-going Milk Marketing Order Program, which helps about 70 

percent of the nation’s milk. We have the Dairy Export Incentive 

Program and we have used that to the fullest available for cheese 

and nonfat dry milk and for the first time since 1999 we have initiated it for butter this year. 

As I mentioned to an earlier question, we are also looking right 

now at our purchase prices for dairy products. We, of course, have 

33

established those prices but we are looking at those to ensure that 

we are taking account of perhaps any unique costs that manufacturers encounter when they have to produce a product to meet our 

specifications to make sure we are paying them enough to cover 

those perhaps additional things that they may have to do. 

We are trying to use all those tools to the best available advantage and the way Congress intended them. 

Senator LEAHY. Well, doctor, I will look at the earlier testimony 

on this, too. 

If I might, Mr. Chairman, I may have a couple of questions for 

the record on this issue. 

The CHAIRMAN. I would be happy for you to submit those, Senator, and we will ask the Secretary to respond in a reasonable 

time. 

Senator LEAHY. Thank you. I also note the Farm bill, when we 

wrote that, and this was a matter of some discussion both with the 

administration and among members, we put a strong regional equity provision for conservation funding in it. That was something 

worked out over a long-time negotiation. As part of that negotiation 

it was Senator Harkin and Senator Cochran, Senator Lugar and 

others. Under that, Vermont should have—and I realize it is almost unique for a parochial issue to be raised at a meeting of the 

Senate Agriculture Committee, but we should have received $12 

million in conservation funding. We received only $8.6 million. 

Now I say this notwithstanding that is an increase of $100,000 

over last year, but we increased nationally hundreds of millions of 

dollars in this program. We have been able to fund only 20 percent 

of our conservation applications, most notably EQIP in the past 

years, due to insufficient funds. The EPA regulations on large 

farms are coming. States like Vermont that have stepped up the 

provisions need it. 

Why can’t we implement the regional equity provisions? We have 

all the applications and everything else. Can you use nonallocated 

conservation funds and immediately implement the regional equity 

language? 

Mr. KNIGHT. One of the biggest challenges we face with putting 

more of this information up on the web and being more open on 

this is you are able to see exactly how the money has gone in your 

particular state and I knew full well you would be asking this 

question today, sir. 

The regional equity provision, as it was written in law, quite specifically asks us to look to ensure that we are implementing all 

these provisions in an equitable manner throughout the aspects of 

the bill and stated further that it had to apply to the provisions 

prior to April 1, and we are in the very difficult situation of this 

year, which will be very unusual, in that having had the late appropriations process, compounded by the late allocations process, 

we are very late in the year for being able to make those out, to 

be able to get at that program to be able to do as you had designed 

with the $12 million. 

The program allocations are all constructed and designed by formula that attempt to be able to gather the resource needs for each 

of the programs. We have a different allocation formula that is 

34

used to design EQIP. That one, as a matter of fact, takes 29 different factors and it combines everything from acreage to—— Senator LEAHY. Before you get too far out there, the provision, as I understood it, required each state to receive at least $12 million in conservation funds by April 1. Now what is so difficult to 

understand that? I realize you may have applications and everything else, but why does not each state just get their $12 million 

to begin with? That money is there. 

Mr. KNIGHT. The provision actually, sir, states that before April 

1 of each fiscal year the Secretary shall give priority for funding 

on the conservation provisions of subtitle D—it goes on with those 

things—for approved applications if not received for the fiscal year in aggregate amount of at least $12 million for these conservation 

programs. 

There have been lawyers on each side of the issues who have ad- vised whether it does, in fact, require that a minimum of $12 million be spent on each of these states and this gets to some of the 

provisions we have had before—the debate of the differing legal interpretations. 

Senator LEAHY. The interpretation seems to be that if you are in 

the so-called farm belt, you are going to get the money; if you are 

in the Northeast, you do not get the money. The flip side is if you 

are in the Northeast you pay the taxes to fund the programs. 

I am not trying to set up regional battles. I have supported those 

programs in the Midwest. It seems to me that any time we have 

something that seems to affect us, the Northeast, we are going to 

be asked for the tax dollars to pay for it but we do not get it. 

I am looking at the AMA funds, the Agriculture Management Assistance Programs. We all worked together to put that in because 

current crop insurance policies do not cover crops grown in the 

Northeast, could use these risk management funds, but now you 

have taken the AMA money for a new crop insurance subsidy. That 

is not going to benefit producers. We do not grow crops that you 

insure. 

We get a number of reasons. Penn here says that the regional 

equity language, he cited that as justification for redirecting it, the 

AMA funds. Now you do not implement it. We had 24 of the 30 

senators who would be affected by it ask you to reinstate the old 

program. Are you going to reinstate the previous innovative program? You invested the money in traditional risk management programs. 

Again it is a case like you guys in the Northeast pay the bills 

but no matter how you write the Farm bill, no matter how many 

things you put in there to get a response into your part of the country, forget about it. I can’t quite say it like my New York senators 

might say ‘‘forget about it,’’ but that is basically what happens. We 

get the bill, we send the check and wait for delivery. 

What are we going to do here? How many times do we have to 

rewrite the law? 

Secretary VENEMAN. Senator, I appreciate the concerns that—— Senator LEAHY. You know, I am a strong supporter of yours, 

Madam Secretary. I do not know what is happening here. 

Secretary VENEMAN. As I said, I appreciate your concerns and as 

Bruce Knight said, there have been some differing legal interpretaVerDate 0ct 09 2002 09:41 Sep 12, 2003 Jkt 089169 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 C:\DOCS\89169.TXT SAG1 PsN: TOSH
35

tions and I would be happy to have appropriate staff come and 

work with your staff to determine if we can work out some of these 

issues that are raising today, to determine how we can best address them. 

Senator LEAHY. I wish you would because it not just a parochial 

thing to Vermont, although we are really getting shafted by it. 

Again it is a Northeast issue, and I am not trying to pit one region 

against the other. My record is such for 30 years that I have 

strongly supported other parts of the country, but this was specifically to balance some of the equities and I do not think we are getting it. 

With that, Mr. Chairman, I know you are pressed for time, too, 

and I will submit my other questions if I might for the record and 

I will take the Secretary up on her offer to have her folks meet 

with mine. 

Secretary VENEMAN. We will do that. 

Senator LEAHY. I do appreciate your trying to reach me and am 

sorry we missed. 

The CHAIRMAN. Thank you, Senator. 

[The prepared statement of Senator Leahy can be found in the 

appendix on page 99.] 

Madam Secretary, the record is clear that you have led a gallant 

effort at the Department of Agriculture to expeditiously and with 

a degree of sensitivity that is very important implement this new 

writing of a farm bill and this hearing, as you observed in your 

statement, comes on the first year anniversary of the passage of 

that bill, the signing of the bill by the president, as a matter of 

fact. 

You had to hire temporary employees, over 2,000, to help staff 

the Farm Service Agency offices and undergo training to be sure 

they understood what their duties would be and how to carry those 

duties out in a responsible and sensitive way. It has been a massive undertaking and you have risen to the occasion and demonstrated a great deal of competence and good judgment in the 

process. 

I do not have any other questions. You have answered all the 

questions that have been put to you in a responsible way and the 

team you have with you—Dr. Penn, Mr. Knight, Dr. Collins—have 

done a commendable job, as well. 

Senator Harkin. 

Senator HARKIN. Thank you, Mr. Chairman. I have some other 

questions which I will submit in writing. It has to do again with 

the Venture Capital Fund and why we cannot move in a more 

timely manner on that. 

The CRP was covered in terms of a possible—I appreciate your 

getting back to me on that—a possible extension of time on that. 

We have covered the other things here. 

There is one issue, Madam Secretary, that I want to bring up because I have been asked about it and it is important that we air 

it a little bit publicly here. That has to do with the reports that 

are coming out that the press somehow is being locked out of doing 

their job at the Department of Agriculture. 

President Lincoln called the Department of Agriculture the people’s department and there a story that appeared in Feedstuffs and 

36

then there is another story that appeared in Congress Daily and 

there is another story that appeared in Agriculture about this and 

it has to do with obviously your press secretary, Alisa Harrison, advising three reporters, this one included—this is Sally Shift; I have 

not talked to her, Feedstuffs Washington editor—that the days of 

staking out closed press meetings in USDA buildings were over. 

She says in her report, ‘‘It went like this. The three of us were in 

the lobby of USDA’s Whitten Building on a stake-out of a closed 

door session’’—I have a little problem with this I will tell you 

about—‘‘a closed door session between high-ranking USDA, White 

House and U.S. Trade Representative officials and agriculture lobbyists on the thorny agricultural trade issues with Mexico. Stakeouts are reporters’ traditional way to seek hallway interviews,’’ as 

well we know up here, ‘‘as participants emerge from government 

meetings.’’ She went on to say that Harrison charged that our 

building passes only allowed us access to our offices. 

Now the report said here that she was standing out there and 

Harrison, ‘‘Just as reporters finished talking with the lobbyist’’—

oh, I know. The lobbyists came out, evidently, of the meeting. Lobbyists were meeting with your people. It is reported that Under 

Secretaries J.B. Penn and Bill Hawks and Chief U.S. Trade Representative Allen Johnson had no problem answering her questions 

but just as reporters finished talking with the lobbyists Veneman 

and her press secretary Alisa Harrison talked in the front door of 

the building. The reporters said Harrison walked over to them and 

told them they must never stake out a meeting at USDA again. 

The reporters said Harrison threatened that if they do, she would 

revoke their building passes or call their editors. 

I am wondering what is the policy at the Department of Agriculture in terms of letting reporters stand outside of doors and go 

ahead and question people when they come out? 

Secretary VENEMAN. Well, Senator, let me first say that we try 

very hard to have a very open and accessible relationship with the 

press. We have done numerous press briefings. We try to be available to the press. We answer their questions when they call. We 

have a very unique situation in USDA in that we have a radio studio and a TV studio. We try to do as much as we can so that people 

can all listen in. 

Yesterday when we did the announcement on the EU biotech 

case we had that webstreamed on our web so that anybody anywhere that had access to the web could actually watch the entire 

press conference. Just first of all, I want to make it clear that we 

try to have a very open press relationship. 

The difficulty, as I understand it, that our press people have 

been trying to deal with is we are one of the few departments of 

government that has press actually in our building. Defense and 

State and the White House have press in the building. They are 

all relegated to certain areas. They do not have free access to the 

White House or to the State Department or the Defense Department in those cases. The concern is that we need some reasonable 

guidelines for the press access. They are invited to every public 

event. I certainly talk to them and others do in any public event 

setting. The issue is really private meetings. 

37

In the meeting you talk about it was with people interested in 

trade issues with Mexico. I would not necessarily have termed 

them all lobbyists, although I am sure some of them are registered. 

My understanding of that meeting was it was a briefing with the 

private sector with interests in some of the trade disputes we have 

with Mexico to get a direct briefing from Dr. Penn and Mr. Hawks 

and Ambassador Johnson following the meeting that they had in 

Mexico. We often brief private sector interested parties. We think 

that is an important thing to do. 

We also brief the press often and they certainly had access to our 

people to talk about the trip after Mexico, to talk about the issues 

that were discussed. 

Senator HARKIN. Is this a departure? Is this a departure from 

past practice? 

Secretary VENEMAN. I have to tell you in all honesty until I read 

about this in the press, I did not know it had happened. My understanding of it is that it is an attempt to simply restate what the 

policy of the department has been, and that is we provide access 

at public meetings, we provide access that we think is responsible. 

Senator HARKIN. I understand that but this has to be cleared up 

for your benefit and for ours, too. 

Secretary VENEMAN. I agree, Senator. I agree. 

Senator HARKIN. Up here, because there is a concern here and 

we have to clear up one thing that was said in this story. I do not 

know. It said here that since you had just come in the door with 

Miss Harrison and she left from you to go to meet with these people, there is some thought that—oh, yes. ‘‘The fact that Harrison 

was observed entering the lobby with Agriculture Secretary Ann 

Veneman moments before she confronted us only added to suspicions that her instructions came from the top.’’

Did you instruct Miss Harrison to go over and tell the reporters 

that they could not stake out any longer? 

Secretary VENEMAN. No, I did not. I did not even know she was 

going to talk to them. We walked in talking about something else. 

Senator HARKIN. She did this on her own volition? 

Secretary VENEMAN. She did. 

Senator HARKIN. Well, Madam Secretary, you really ought to review this. I have been around the department now for 28 years, I 

guess, in and out, and I aware that reporters have been down there 

in the past, that they have access, which I have always thought 

was a very good thing. 

Again I am told that it is a departure from past practice on the 

access of these reporters with desks at USDA to the hallways, et 

cetera, that this is a departure. Again I would like to know why 

at this point in time are we making a departure from practices that 

have been going on for as long as I have been here and maybe 

longer? Why is there that departure? What happened? 

Secretary VENEMAN. Well, Senator, my understanding is that our 

press shop had tried to make reasonable guidelines, which generally are followed by representatives of the press. As I said, we 

have press people in the department, we have very good relationships with them and normally we do not have issues that arise 

coming out of these kinds of meetings. 

38

I have asked for a full review of this situation. I have asked for 

our folks to meet with the various members of the press to talk 

about exactly what the ground rules are. Obviously we need some 

ground rules in terms of the press accessibility since they do have 

access to the building and it is a unique situation in government. 

Most of the members of the press would agree that we need to have 

a common understanding of what the ground rules are, and that 

is what I have asked my people to do following this incident. 

Senator HARKIN. Well, I hope you will keep us apprised of that. 

I have no problem. Obviously we have meetings up here, too, that 

are not open to the press. The press accepts that. As soon as you 

walk out the door, there they are and we have that all the time 

up here—in the hallways out here, the hallways in the Capitol 

building. We may have a meeting, a closed door meeting to discuss 

things for whatever reason now and then but as soon as we walk 

out into the hallway the reporters are there to ask us questions. 

I believe it is a legitimate function of theirs to be there, to get 

immediate responses from people that were in the meeting, to ask 

them questions. Obviously if I come out of a meeting and the press 

asks me a question I can demur; I can say I do not want to answer 

that, but then they get a report that I refuse to answer it, too. The 

public has a right to know these things and the press, no matter 

how much we praise them or despise them, they are our link to the 

public and we have to make sure that they have that kind of accessibility. 

I hope you do review this because I have been asked about this 

a couple or three times and the more I looked into it, the more I 

thought we had to air it here and get it out and hopefully you will 

review that and get back to us with what your policy would be 

down there. 

Secretary VENEMAN. Well, Senator, I absolutely agree with you 

about the important role of the press. One of the things that we 

try to do at the department, and as we discuss the Farm bill here 

today we could not have gotten the information out to the recipients of the programs without the farm broadcasters and the ag 

meeting writing the stories about the message that we were all trying to give about the dates for sign-up, what you need to do, where 

to get information, how to get on the website. 

I absolutely agree with you that our relationship and our dependence on particularly the ag media is very important. 

Senator HARKIN. I appreciate that. I can only speak for myself, 

I would not propose to speak for any other senator, but look, we 

all have experience with stake-outs. The press is there and you 

come out of a meeting and we all have experience with that. Maybe 

it does make us uncomfortable once in a while but maybe that is 

the press’s job, to make us uncomfortable once in a while, too. 

Thank you very much. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Madam Secretary, thank you again for your cooperation with our 

committee and the attendance at this hearing. I commend you and 

your staff for the excellent job you have done. 

[The prepared statement by Secretary Veneman can be found in 

the appendix on page 42.] 

39

The CHAIRMAN. There is no further business to come before the 

hearing. The hearing is adjourned. 

[Whereupon, at 4:22 p.m., the committee was adjourned.] 

(41)

A P P E N D I X

MAY 14, 2003

42


89169.001
43


89169.002
44


89169.003
45


89169.004
46


89169.005
47


89169.006
48


89169.007
49


89169.008
50


89169.009
51


89169.010
52


89169.011
53


89169.012
54


89169.013
55


89169.014
56


89169.015
57


89169.016
58


89169.017
59


89169.018
60


89169.019
61


89169.020
62


89169.021
63


89169.022
64


89169.023
65


89169.024
66


89169.025
67


89169.026
68


89169.027
69


89169.028
70


89169.029
71


89169.030
72


89169.031
73


89169.032
74


89169.033
75


89169.034
76


89169.035
77


89169.036
78


89169.037
79


89169.038
80


89169.039
81


89169.040
82


89169.041
83


89169.042
84


89169.043
85


89169.044
86


89169.045
87


89169.046
88


89169.047
89


89169.048
90


89169.049
91


89169.050
92


89169.051
93


89169.052
94


89169.053
95


89169.054
96


89169.055
97


89169.056
98


89169.057
99


89169.058
100


89169.059
(101)

DOCUMENTS SUBMITTED FOR THE RECORD

MAY 14, 2003

102


89169.060
103


89169.061
(105)

QUESTIONS AND ANSWERS

MAY 14, 2003

106


89169.062
107


89169.063
108


89169.064
109


89169.065
110


89169.066
111


89169.067
112


89169.068
113


89169.069
114


89169.070
115


89169.071
116


89169.072
117


89169.073
118


89169.074
119


89169.075
120


89169.076
121


89169.077
122


89169.078
123


89169.079
124


89169.080
125


89169.081
126


89169.082
127


89169.083
128


89169.084
129


89169.085
130


89169.086
131


89169.087
132


89169.088
133


89169.089
134


89169.090
135


89169.091
136


89169.092
137


89169.093
138


89169.094
139


89169.095
140


89169.096
141


89169.097
142


89169.098
143


89169.099
144


89169.100
145


89169.101
146


89169.102
147


89169.103
148


89169.104
149


89169.105
150


89169.106
151


89169.107
152


89169.108
153


89169.109
154


89169.110
155


89169.111
156


89169.112
157


89169.113
158


89169.114
159


89169.115
160


89169.116
161


89169.117
162


89169.118
163


89169.119
164


89169.120
165


89169.121
166


89169.122
167


89169.123
168


89169.124
169


89169.125
170


89169.126
171


89169.127
172


89169.128
173


89169.129
174


89169.130
175


89169.131
176


89169.132
177


89169.133
178


89169.134
179


89169.135
180


89169.136
181


89169.137
182


89169.138
183


89169.139
184


89169.140
185


89169.141
186


89169.142
187


89169.143
188


89169.144
189


89169.146
190


89169.147
191


89169.148
192


89169.149
193


89169.150
194


89169.151
195


89169.152
196


89169.153
197


89169.154
198


89169.155
199


89169.156
200


89169.157
201


89169.158
202


89169.159
203


89169.160
204


89169.161
205


89169.162
206


89169.163
207


89169.164
208


89169.165
209


89169.166
210

Æ


89169.167