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SUBCOMMITTEE HEARING ON 

THE FUTURE OF SPECIALTY 

CROPS FOR SMALL FAMILY FARMERS 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

JULY 30, 2009 

Small Business Committee Document Number 111-041 

Available via the GPO Website: http://www.access.gpo.gov/congress/house 


Congress.#13
HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

DENNIS MOORE, Kansas 

HEATH SHULER, North Carolina 

KATHY DAHLKEMPER, Pennsylvania 

KURT SCHRADER, Oregon 

ANN KIRKPATRICK, Arizona 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

DAN LIPINSKI, Illinois 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

PARKER GRIFFITH, Alabama 

DEBORAH HALVORSON, Illinois 

SAM GRAVES, Missouri, Ranking Member 

ROSCOE G. BARTLETT, Maryland 

W. TODD AKIN, Missouri 

STEVE KING, Iowa 

LYNN A. WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

BLAINE LUETKEMEYER, Missouri 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KAREN HAAS, Minority Staff Director 

(II) 

STANDING SUBCOMMITTEE 

Subcommittee on Rural Development, Entrepreneurship and Trade 

HEATH SHULER, North Carolina, Chairman 

MICHAEL MICHAUD, Maine 

BOBBY BRIGHT, Alabama 

KATHY DAHLKEMPER, Pennsylvania 

ANN KIRKPATRICK, Arizona 

YVETTE CLARKE, New York 

BLAINE LUETKEMEYER, Missouri, Ranking 

STEVE KING, Iowa 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 1 

Graves, Hon. Sam .................................................................................................... 2 

WITNESSES 

Merrigan, Hon. Kathleen, Deputy Secretary Of Agriculture, U.S. Department 

Of Agriculture ....................................................................................................... 4 

Holbrook, Mr. Bill, Cold Mountain Farms, Waynesville, NC .............................. 18 

Barnwell, Mr. Kenny, Kenny Barnwell Orchards, Edneyville, NC ..................... 20 

Williams, Mr. Mark, CFO, Flavor 1st Growers & Packers, Horse Shoe, NC. 

On behalf of United Fresh Produce Association ................................................ 22 

Hudgins,Mr. Rich, President and CEO, California Canning Peach Association, 

Sacramento, CA. On behalf of National Council of Farmer Cooperatives ...... 23 

Anderson, Mr. Jim, Executive Director, Missouri Wine and Grape Board, 

Jefferson City, MO ............................................................................................... 25 

APPENDIX 

Prepared Statements: 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 38 

Merrigan, Hon. Kathleen, Deputy Secretary Of Agriculture, U.S. Department 

Of Agriculture ....................................................................................................... 40 

Holbrook, Mr. Bill, Cold Mountain Farms, Waynesville, NC .............................. 53 

Barnwell, Mr. Kenny, Kenny Barnwell Orchards, Edneyville, NC ..................... 56 

Williams, Mr. Mark, CFO, Flavor 1st Growers & Packers, Horse Shoe, NC. 

On behalf of United Fresh Produce Association ................................................ 58 

Hudgins,Mr. Rich, President and CEO, California Canning Peach Association, 

Sacramento, CA. On behalf of National Council of Farmer Cooperatives ...... 67 

Anderson, Mr. Jim, Executive Director, Missouri Wine and Grape Board, 

Jefferson City, MO ............................................................................................... 74 

Statements for the Record: 

National Stone, Sand & Gravel Association .......................................................... 79 

Community Food Security Coalition ...................................................................... 84 

Merrigan, Hon. Kathleen, Deputy Secretary Of Agriculture, U.S. Department 

Of Agriculture ....................................................................................................... 87 

(V) 

(1) 

SUBCOMMITTEE ON RURAL DEVELOPMENT, 

ENTREPRENEURSHIP AND TRADE 

HEARING ON THE FUTURE OF SPECIALTY 

CROPS FOR SMALL FAMILY FARMERS 

Thursday, July 30, 2009 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 10:00 a.m., in Room 

2360 Rayburn House Office Building, Hon. Heath Shuler [chairman 

of the Subcommittee] presiding. 

Present: Representatives Shuler, Bright, Dahlkemper, 

Luetkemeyer and Thompson. 

Chairman SHULER. Since the first establishment in 1973, the 

Farm Bill has bolstered countless family farms and sparked a boom 

in production in critical staples ranging from corn to cotton. Last 

year that bill was expanded. It now includes important provisions 

for crops such as fresh fruits, nuts and vegetables. These basics are 

more than just good sources of revenues for our farmers. They are 

the foundation for sound nutrition for all Americans. 

The 2008 Farm Bill recognizes that produce plays an important 

role in healthy diet. Importantly, it expands the USDA’s fresh fruit, 

vegetable snack program. That initiative, designed to improve nutrition and decrease childhood obesity, now reaches over one million kids nationwide. It also opens up the world of opportunity for 

American farmers. 

When combined with the efforts to increase production and promote specialty crops, the snack program means new businesses for 

small farms. 

In today’s hearing, we are going to examine specialty crop provisions within the 2008 Farm Bill. We will also evaluate process and 

its implementation. For thousands of small farms across the country, fresh fruits, nuts and vegetables are the primary source of income. In fact, the sales of these products, commonly known as specialty crops, comprise close to one-third of all crop cash receipts. 

But while the industry has seen growth in recent years, it is still 

plagued by numerous challenges. Despite the obvious benefits of 

buy fresh and buy local campaigns, domestic farmers are being 

crowded out by foreign competitors. Trade pressures have allowed 

farmers overseas to undercut producers here at home. While the 

U.S. was once a net exporter of fruits and vegetables, it is now a 

net importer. In fact, Americans pay $16 billion for foreign produce 

every year. 

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For this reason, Farm Bill provisions that encourage exports are 

especially critical. Exporting is an important means for reaching 

new markets. It allows business to win new customers and improve 

net margins. 

But while it makes sense to court consumers abroad, farmers 

should equally focus on customers here at home. A series of new 

and expanded programs in the latest farm bill will help them do 

that. 

Meanwhile the legislation also contains incentives to encourage 

organic production, for an example, measures to defray the cost of 

organic certification. 

The Farm Bill aside, many small agricultural farms are struggling. Like all small businesses, they are facing challenges in everything from securing loans to accessing health care. In terms of 

capital, even lending to the USDA’s Farm Service Agency, traditionally a lender of last resort, has been jeopardized. 

In the last year, applications for FSA loans have risen significantly. Even once we have addressed the small firms’ financial 

challenges, other obstacles will remain. Pests, challenging weather 

patterns, and natural disasters are obstacles that family farms face 

day in and day out. These are obstacles that the Farm Bill seeks 

to address. 

But in order to do so, it will have to be properly implemented. 

We need to be sure its provisions are working not just for big ag., 

but for smaller producers, too. Small farms have long been the 

foundation for the agricultural community. Today that role has expanded. 

As Congress works to fix the broken health care system, for example, they will play a pivotal role. We have heard a lot of talk 

about the increase in obesity rates and the need for improved nutrition. Well, fresh fruits and vegetables offer healthy alternatives. 

Although the 2008 Farm Bill contains important nutrition measures, the family farmers will be on the front line of delivering those 

healthy options. 

I would like to thank the witnesses in advance for their testimony. I am pleased that they could join us here today, and I look 

forward to hearing from them. 

With that, I will yield to the Ranking Member, Mr. Luetkemeyer, 

for his opening remarks. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman, for holding this 

hearing on this very important topic today, one that is particularly 

pressing for folks back home in my district and many other parts 

of our country. 

In May 2008, Congress passed a new Farm Bill. Many folks 

throughout the country were calling for specialty crops to occupy a 

larger role in Farm Bill policy discussions than in the past. The 

2008 Farm Bill contains provisions on marketing, crop insurance, 

and disaster assistance, protection against pests and diseases, export promotion, research and domestic food assistance, all of which 

are important to the competitiveness of U.S. specialty crops. 

And for the first time in the history of the Farm Bill, there is 

a separate title for fruit and vegetable production. The title provides substantial mandatory funding over the life of the Farm Bill 

and beyond for several major new and continuing programs. One 

3 

provision provides $466 million over ten years to expand the specialty crop block grant program. These block grants are provided to 

states to support projects and research, marketing, education, pest 

and disease management, production and food safety. 

Another provision expands the current farmer’s market promotion program to improve and increase farmer’s markets, roadside stands, community-supported agricultural programs and other 

direct producer-to-consumer market opportunities. Congress recognized that direct sales by farmers to consumers in some 4,300 

farmer’s markets and 1,200 community supported agricultural enterprises offers substantial opportunities for producers to increase 

their returns by capturing profits that would otherwise be paid 

wholesalers and retailers. 

Agriculture is the largest economic sector in my state and my 

district and is of vital importance to our national economy as well. 

In the past, grant money from the Farm Bill has gone to projects 

to project statewide farmer’s markets and to create a registry to 

help producers of pesticide sensitive crops, notifying applicators of 

their products’ locations. The grants are meant to assist specialty 

crop producers and seem to at least somewhat achieve that goal. 

Like other crops, specialty crops are facing tough international 

competition. So any support that is given to promotion and research for specialty crops should make the industry stronger and 

more competitive. In Missouri, this means maintaining agricultural 

land and jobs that agriculture provides. 

To be sure, enactment of Title X of the 2008 Farm Bill did not 

eliminate all issues associated with increasing returns to producers 

of specialty crops. The marketplace for specialty crops requires 

high-quality product available fresh almost every day. The consumers expect consistency in this quality. 

If producers and packers of specialty crops can deliver consistently high-quality product to the market, they will likely maintain 

or increase market share. The question remains whether programs 

for specialty crop producers in the 2008 Farm Bill will enable them 

to provide this high quality product to their consumers. 

I know this House Small Business Committee and this Subcommittee recognize how critical fruits, vegetables, and other specialty crops are to the economic health of this country. 

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

forward to hearing the witnesses, and am pleased to see another 

opportunity that this hearing presents us: a chance to further raise 

awareness of the critical role fresh produce plays in our lives. 

With that I yield back. 

Chairman SHULER. Thank you, sir. 

We will now move to testimony. Each of you will have five minutes to deliver your prepared statement. The timer begins when 

the green light illuminates. When one minute remains, the light 

will turn yellow. The red will say that time is up. 

Sometimes we are a little more lenient on that depending, but 

we try to move through as quickly as we possibly can for the testimony because obviously the Q&A is some of the most important information that we can gather. 

4 

At this time I would like to welcome our first witness, the Honorable Kathleen Merrigan. Dr. Merrigan is the Deputy Secretary of 

Agriculture at the USDA. 

Thank you for your attendance here today, and we look forward 

to hearing your testimony. You will be recognized for five minutes. 

STATEMENT OF THE HONORABLE KATHLEEN MERRIGAN, 

DEPUTY SECRETARY OF AGRICULTURE, U.S. DEPARTMENT 

OF AGRICULTURE 

Ms. MERRIGAN. Thank you, Mr. Chairman. Thank you to all of 

the Committee members here today for holding a hearing on a 

topic that is near and dear to my heart. 

I know it is a very, very busy time with August approaching. 

That you fit this into your schedules is really impressive, and I 

commend you for that. 

I appreciate the opportunity to testify today because of the importance of specialty crops and small family farmers to agriculture 

and our nation as a whole. These are exciting times, and this administration is moving forward on many fronts to revitalize rural 

America and improve the nation’s access to healthy foods, and I 

want to provide a few highlights. 

Secretary Vilsack testified last week before the House Budget 

Committee on how our recovery funds are working. The Recovery 

Act is transitioning America from bad times to better times. These 

investments not only create jobs and economic stability, but also 

fund the technology and infrastructure that will lay the groundwork for future economic growth in rural America. Just yesterday the Secretary announced a $1.7 billion business 

and industry loan program, money that’s there to support business 

opportunities in hard hit areas. These funds will be available until 

expended, and there is certainly a portion of that money that is 

going to be going to local and regional food system infrastructure, 

and I think that is exciting. 

Earlier this spring President Obama launched the Rural Tour 

with Secretary Vilsack accompanied by other cabinet members. 

They have been out in rural America leading a discussion about 

how best to rebuild and revitalize rural America through green 

jobs, bringing broadband access, and improving rural health care. 

President Obama, as you know, has made a safe, sustainable, 

and nutritious food supply a central goal for USDA. He is very concerned about the health and welfare of America’s children. The 

First Lady has also been very prominent talking about this issue. 

The President wants to make sure that children have access to nutritious food and lead active life styles. We are working our way to 

best use our programs to meet these goals. 

You may have heard about the People’s Garden at USDA, the 

First Lady’s White House garden. They are raising awareness, setting examples for communities across the nation on healthy eating 

and reconnecting folks to agriculture. 

Secretary Vilsack has charged me with leading an interagency 

initiative to think creatively and dynamically about how USDA can 

answer the President’s call to reinvigorate our local food systems. 

Through this initiative, I have involved all of the relevant agencies 

in an examination of our current activities, funding mechanisms, 

5 

and authorities, as well as the opportunities and obstacles to the 

creation of a more vibrant regional and local food system. 

This administration’s commitment to healthy eating and the importance of fresh, nutritious food is raising the profile of locally 

grown food and which can specifically help, I believe, specialty 

crops. So it is my belief that the future of specialty crops is clear 

and very bright indeed. 

My written testimony provides a fairly detailed description of the 

myriad of programs that can assist small and mid-size farms. I am 

not going to go through them in detail, but I want to bring your 

attention to some of the latest news on how USDA is working 

across agencies to increase coordination and bring targeted resources to critical issues facing young, small and mid-size farms. 

The Secretary and I are both very concerned about what has 

been described as the disappearing middle. We see from our census 

data small farms are actually thriving. We are getting some new 

farmers actually, some women farmers, which I find very interesting and exciting, and the larger enterprises seem to be doing 

okay, but there is this big swath in the middle of your small and 

moderate size family farms that are finding i hard to survive in 

this climate. 

And we believe taking a local and regional food system approach 

may help give them the tools they need to survive. Fred 

Kirschenmann of the Leopold Center, Iowa State, says, ‘‘Creating 

and expanding markets that value intrinsic qualities such as locally produce holds keys to saving the disappearing segment of agriculture.’’ 

Community supported agriculture and farmer’s markets are an 

area that we are spending a lot of time thinking about. Farmer’s 

markets, as the Chairman has said, has set the nation on a 

healthier course. CSAs, they’re growing, and we think that is important. 

USDA is also promoting specialty crops through our purchases. 

We purchased about $650 million in specialty crops in 2008 for domestic nutrition assistance programs, as well as leverage a lot of 

purchases through the SNAP Program, formerly known as food 

stamps, the WIC Program, and our own purchases for the school 

lunch program. Overall we figure that USDA supports the purchase of about $11 billion in fruits and vegetables. 

We have a number of programs that we are trying to revamp and 

get on to the 2008 Farm Bill agenda. Some of those were reinvigorated, new language put in, new twists, and some absolutely brand 

new programs that we’re moving very quickly to implement. 

I see my time has run out. Let me just conclude and then take 

your questions with a few thoughts on the National organic Program. As you may be aware, I have a bit of a history with this program, a bit of love for the program. It’s the program that, you 

know, regulates how products that carry the organic label, what 

must be done. 

We have been doing a lot of very important things since in the 

very early months. I have been in the job for about three and a half 

months. In may we announced that the National Organic Program 

will be elevated to its own division with a new Senior Executive 

6 

Service Director, a reform that recognizes the growth and importance of the organic industry. 

Second, the National Organic Program budget and staff dedicated to enforcement is increasing in size in this fiscal year and the 

next, insuring more robust oversight of the standards and aggressive prosecution of wrongdoers. 

And third, for the first time, the National Organic Program will 

be subjected to outside audit to insure rigor and consistency, three 

very important reforms that will make our program stronger and 

that will be a boost for small and moderate size farms. 

So as we make these improvements, we are going to also stress 

that the basic standards are well crafted and that the public process for establishing acceptable production materials is, will remain 

participatory and transparent and that consumers can continue to 

buy organic products with confidence. 

So in conclusion, Mr. Chairman and members of the Subcommittee, I am proud to be joining the team at USDA, to have an 

opportunity to work with you on these important issues, and I look 

forward to your questions. 

Thank you. 

[The prepared statement of Dr. Merrigan is included in the appendix.] 

Chairman SHULER. Thank you for your testimony. 

A few months ago I took what was called the Food Stamp Challenge that some local folks had asked me to try to live off of the 

same amount of money that people on food stamps would live on, 

and it ended up being about $1.10 per meal. So I thought that 

would be pretty easy, you know, live on $1.10. 

Well, I recognized pretty quickly outside of eating a box of Laura 

Lynn from Ingles food chain, a box of macaroni and cheese for 

three meals, that was about all I could afford, and everything that 

I looked at I realized that none of it was healthy. So if I wanted 

an entire meal, if I wanted to come down to the Cannon Carryout 

and buy an apple, it was a dollar. Well, that was my entire allotment for the meal for the entire day. 

What is being done from the USDA when it comes to the government programs to insure that our local growers, that their fruits 

and vegetables that we are getting from them are actually, you 

know, going to some of the subsidies programs, the WIC, food 

stamps, in order for us to buy their products and not these imported products? Is there anything within the Farm Bill that really 

specifically looks at looking at our farmers first as opposed to looking at especially in the government programs? 

Dr. MERRIGAN. Thank you, Mr. Chairman, a few thoughts. First, 

let me say in the Recovery Act that you all passed and provided 

extra money for these tough economic times, the SNAP recipient 

household, four person household is getting an average $80 more 

a month in SNAP benefits, which is equaling about $800 million 

a month. That is put out in the economy, and we find that for every 

$5 spent that provided SNAP benefits, it is a little over $9 that 

goes into the local economy, and we think that is good. 

But I understand. It is tough to always make the proper purchases, and one of the things that we are moving forward on very 

7 

aggressively is promoting farmer’s markets and then farmer’s markets that have EBT abilities, electronic benefit transfer, and the 

ability to take SNAP benefits at farmer’s markets. 

That is not nationwide yet, and we are trying to ramp that up 

as quickly as possible so that people, particularly in food deserts, 

areas where you may not have a grocery store or a place where you 

can buy much fresh product. We need to get farmer’s markets into 

those communities, find ways to incentivize farmers to go into 

those communities and make sure the electronic benefit transferability is there. 

We also need to do more, I believe, in school lunch and breakfast 

feeding programs. Many children unfortunately, almost their entire 

nutrition comes from the school meals. That is, by the way, a problem in the summer. Only about ten percent of our schools have 

summer feeding programs in place, but during the school year we 

have a very good program. We want to do better in terms of the 

nutrition that we have in those programs, and farm to school is one 

important way. That is something that, for example, in your district if you had a bunch of little producers and they want to go into 

the school systems sitting from the school, that is hard to deal with 

all of these different vendors and a little of this and a little of that 

product. 

This new business industrial industry loan program that the Secretary announced yesterday, you could be a person who decides 

your business is going to aggregate all of the product from those 

local producers and then be the vendor to the school. So that is an 

economic opportunity for entrepreneurs out there that would like 

to serve this public need, I believe. 

Finally in our WIC program, you mentioned that we are doing 

more in terms of providing WIC beneficiaries with abilities to buy 

fruits and vegetables. That is in the early stages, and we are not 

exactly sure how much that is ultimately going to cost, but we 

think it is the right way to go. 

Chairman SHULER. Some of the biggest challenges to be able to 

implement the 2008 Farm Bill because of the new programs, and 

there were so many programs for the specialty crops. What were 

some of the biggest challenges? What are the things that we can 

do as Members of Congress to be able to help implement the program? Sometimes it looks very good on paper, and it looks great 

but the implementation may be so difficult or it may be the point 

that we as members of Congress need to help and assist with our 

extension offices in the Farm Bureau and other organizations to be 

able to get the message out and get the word out, very similar to 

what you’ve given me today of how our farmers can co-op together 

to be able to make sure that their fruits and vegetables are going 

on the plates and the tables at school as opposed to these imported 

products. 

Dr. MERRIGAN. And we really appreciate your help in getting out 

the word on some of the programs that we do have at USDA that 

could help in this arena. I think part of the problem comes from 

USDA. We have these programs and sometimes it is the same old 

people who apply for the money and we get very comfortable with 

relationships, and this is how we conceive of the programs, and 

what I am trying to do first and foremost is be a matchmaker, I 

8 

suppose with the programs that USDA already has at its disposal 

and try to say to people who are interested in local and regional 

food systems, ‘‘Hey, do you know about these programs in a real 

development mission area and have you thought about how they 

might apply so that we also have, for example, a community facilities program?’’ It is a grant program, not a loan program where a 

group of producers could come together and apply for a refrigeration truck money to bring their product into the inner city where 

markets might exist, where they’re not in such quantity out in 

through the real countryside where they may produce their product. 

Part of my job is to get those ideas into our staff in rural development because that may not be how those programs have been 

utilized in the past, but certainly it is within the statutory authority of these program that you all have given us, and then it is also 

about creating the demand side out there to sort of say here are 

these programs. Stand up and apply. 

So there are a number of them, and I would be very happy as 

I start this match making process later this week actually to share 

that information with the Subcommittee and for you all to use your 

networks and your district offices to help get that word out. I 

would be very grateful for that. 

Chairman SHULER. Well, that would be good, I think as all the 

members, especially in the rural areas that look at the small business. We are very diverse. We have urban and rural, but we want 

to make sure that we have an opportunity for everyone, both the 

inner city kids making sure they get a healthy, well balanced diet, 

but also help our growers in rural areas to insure that their products are being sold. 

So I think it would be very helpful to all of us. 

At this time I will yield to the Ranking Member, Mr. 

Luetkemeyer for his questions. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

This is a rather interesting time in Congress. We have had a lot 

of bills that have come through in the last several months here 

that have had an impact on our agricultural community, and we 

had one yesterday, as a matter of fact. 

You made the statement that you believe that specialty crops’ future is quite bright. So I would like for you to address or if you 

are familiar with the food safety bill that was defeated yesterday 

and will probably come back up again today or tomorrow, with regard to the impact of the FDA overseeing the safety and soundness 

of some of our food process and food chains versus the USDA. 

Dr. MERRIGAN. I have not studied the latest version of the legislation. I do know that Secretary Vilsack has been working very 

closely with Secretary Sebelius at the request for the President to 

have this Food Safety Working Group where principles are laid out 

in terms of where we feel we need to go and make our food system 

stronger. 

USDA has actually some fine authorities under the Food Safety 

Inspection Service. We have recall authority. We have inspectors in 

all of our plants. I think we are trying to do more on the import 

side of the equation, but we have strong authorities, but there are 

still ways to improve. We still have too many people who get sick 

9 

from Salmonella. We still have doubts that, you know, come from 

E. coli. We have listeriosis. So we are trying to improve our systems so that no parent needs to worry about the food that they feed 

their children and no senior, also another vulnerable population 

has to worry about the food they eat. 

Part of it is education, too. USDA has tools out there. Here is the 

pickle. Do you know what the wattage is on your microwave oven? 

I have no idea what the wattage is on my microwave oven. 

Mr. LUETKEMEYER. I cannot use mine. So I would not know what 

the wattage would be. I just punch a ‘‘go’’ on it. It says ‘‘start.’’ 

Dr. MERRIGAN. I do not go there, but there are a lot of foods in 

the marketplace now where you purchase it, and you heat it up in 

your microwave oven. Well, what I found out is that microwave 

ovens have all different wattages, and if you read the very fine 

print, which I have never done, on frozen food, it will tell you based 

on the wattage how long that you have to heat it up for, and that 

is only the best packaging. 

So the frozen food industry, for example, comes to my office and 

says, ‘‘Well, you know, we have a lot of healthy food that with the 

convenience lifestyles people are going more to a microwave environment, but we are really concerned about getting the message 

out, educating people about wattage, and also maybe we can work 

with the companies who produce microwave ovens to have more 

standardizations.’’ 

So these issues are very complex, and we have a whole slew of 

work to do in the next four years. 

Mr. LUETKEMEYER. Well, you know, the reason for the question 

obviously is there is a concern. Food safety is at the heart of it, but 

initially the food safety bill had a lot of livestock and grain producers in it and they were eventually taken out. It is, you know, 

I think targeted toward the specialty crop folks. 

So as a result, you know, I have quite frankly much more 

strength and belief and support for what USDA does than what the 

FDA does, and so I would prefer that you be the oversight organization rather than the FDA with regards to food and at least getting it to the marketplace. At that point, if FDA wants to take over, 

but I think that the experience that you have in that field is much 

more important and much more broad and, therefore, I think that 

it is imperative that you do not relinquish that oversight. So that 

would be my concern. 

There are some comments and things in there as well about fees 

anyway for things like farmer’s markets. I was wondering if you 

have an opinion on how that is going to affect specialty crop folks. 

Dr. MERRIGAN. I will have to look at that, sir. I am not familiar 

with those permit fees. So I will respond in writing by tomorrow 

on that. 

Mr. LUETKEMEYER. One other question. I know the cap and trade 

bill has gone through the House. It is sitting in the Senate. I am 

just curious as to what your view would be on the effect on specialty crop folks. 

Dr. MERRIGAN. We feel very strongly that there is a role for agriculture in all of these various bills, that we really see that agriculture is a contributor to climate change, but it is also a great contributor to climate mitigation. And so we are very involved in tryVerDate Aug 31 2005 07:53 Dec 10, 2009 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\51036.TXT DARIEN
10 

ing to figure out the offset side, get the metrics, the methodology 

straight, and figuring out how to, for example, figure out how much 

carbon is sequestered on agricultural lands and how to articulate 

that and make sure that is a part of whatever package goes 

through. 

Mr. LUETKEMEYER. How long do you think that will take? 

Dr. MERRIGAN. Well, it is complicated, but we have to do it. I 

mean, we have to do it and we may not get it perfect on the first 

iteration. I think that— 

Mr. LUETKEMEYER. The reason I asked the question, I sit on the 

Ag. Committee, and I have asked this question of ag. folks for the 

last four months. At this point we still do not have an answer. 

Dr. MERRIGAN. I hear you, sir. I think it is also one of the challenges we have to make sure that USDA does not have their own 

metrics and Interior has their own metrics and EPA has their own 

metrics. So not only are we working within USDA, but we are trying to work with other departments of government to some to a 

common understanding of how we are going to move forward on 

this. So we are racing against the clock. We understand that. 

Mr. LUETKEMEYER. Very good. One more quick question for you. 

I know as a former director of tourism, that in the State of Missouri agri-tourism is an important part of that and in fact, we will 

have a gentleman here this morning from the Missouri Wine and 

Grape Board. 

What efforts is USDA putting forth to promote agri-tourism here 

in the United States? 

Dr. MERRIGAN. We are not doing enough. I had the very tough 

hardship assignment last summer of being in Italy. I was working 

for the Food Agricultural Organization of the U.N. Italy is the foremost country in the world for agri-tourism. They have it down to 

a brilliant science. I mean, it is really remarkable how wonderful 

that system is, and I hope that we do find more ways to promote 

agri-tourism. I think your point is well taken. 

What we do message to small and moderate size farms is that 

one of your best risk management strategies is to have a diverse 

operation, diverse in terms of crops, but also activities, and agritourism can be a part of that, and that can be part of your safety 

net, but I take your point. I think we need to do more. 

Mr. LUETKEMEYER. Well, I know there is an initiative to try and 

— we are one of the few countries, if not the only country, in the 

world that does not have an agency or division that promotes tourism in their country, and there is an effort to do that, to establish 

that, to put some funds aside. 

Could we ask for your support in something like that to be able 

to promote it to the Congress to see if we cannot get something 

done along that line? 

Dr. MERRIGAN. I am happy to talk and work with you on that. 

I think agri-tourism is very important. The specifics I would have 

to see. I cannot commit the administration in an area I do not really know very well, but I think you are absolutely right that it has 

great opportunity for farmers, and for where I am from in western 

Massachusetts, you may not think that is a big ag. state, but we 

actually have a pretty healthy agriculture enterprise in my part of 

11 

the world, and agri-tourism out there has proved quite successful, 

and it is a real income generator for farmers. 

It takes work, there are issues around liability and traffic and 

communities. I mean, it is not just, oh, added onto your farm without thinking about it. It is tough and we need to guide farmers, I 

agree. 

Mr. LUETKEMEYER. Well, we will look forward to working with 

you on that issue. Thank you. 

Thank you, Mr. Chairman. 

Chairman SHULER. Thank you, sir. 

At this time we will yield to Mr. Bright from Alabama for his 

questions. 

Mr. BRIGHT. Thank you, Mr. Chairman. I appreciate the hearing 

today, and, Madam Secretary, thank you very much for your time 

and your testimony here today. It has been very enlightening so far 

for this short period of time. 

Could you talk in detail about the specialty crops’ block grant 

program and give your opinion regarding its effectiveness in enhancing the competitiveness of specialty crops? 

Dr. MERRIGAN. The block grant program that you refer to was 

authorized in 2004, and it is basically chunks of money—that is a 

technical term, I suppose—that goes out to the states to do a variety of things that help support specialty crops. We think it is a 

very important program. 

Mr. BRIGHT. Has it been effective? 

Dr. MERRIGAN. I believe so. I should probably turn to my nifty 

Tab 15 or whatever it is in this briefing book to see if we sent any 

money to Alabama. 

Mr. BRIGHT. I would like to know for sure whether you have. 

Dr. MERRIGAN. My staff immediate turned to— 

Mr. BRIGHT. If you have not, I would like to see how we can 

make sure that happens. 

[Laughter.] 

Dr. MERRIGAN. It should happen. It is there for states to apply 

to, and I think it has been pretty successful. I think all told a little 

under 800 projects have been funded over the course of time, and 

let me see. Alabama, here it is, issued $125,779. That is very specific, to the Alabama Department of Agriculture and Industries, to 

expand efforts to target families in under served counties in Alabama in order to conduct workshops and teach parents how to incorporate fresh produce as a stable in the family’s diet and to assist 

Alabama specialty crop producers with direct marketing, value 

added operations, consumer ed., agri-tourism, and general promotions. 

Then there was another grant of $118,000 and such to do a 

whole bunch of other things, and I will have the staff hand this 

document to you. 

Mr. BRIGHT. Very impressive. Thank you very much. We just 

need to triple that or quadruple that if we can for the folks down 

in Alabama. 

Is there anything that the USDA could do to increase the awareness of this program that maybe we could help you with other than 

what you have already stated? 

12 

Dr. MERRIGAN. I hope that states are familiar with this, but I 

hold a monthly phone call with all state Departments of Agriculture, in some cases the Commissioners, Secretaries, Directors. It 

would be easier for me if they all had the same title, and so I don’t 

know in Alabama. 

Oh, well you have Ron Sparks. 

Mr. BRIGHT. We sure do. 

Dr. MERRIGAN. Well, he is important. He is the Chairman for the 

National Association of Departments of Agriculture. 

Mr. BRIGHT. That is right. 

Dr. MERRIGAN. So we have a monthly phone call, and we talk 

about issues, and on my next call I will raise this issue with them 

to see if they feel that they have enough information to be working 

effectively with us on this. 

Mr. BRIGHT. Good. Thank you very much 

In your testimony you mentioned that farmer’s markets are beginning to spring up in a number of areas, and particularly in 

under served areas. Could you talk generally about—and this gives 

you a little opportunity to expand your opening comments if you 

desire—on how the growth of farmer’s markets and community 

gardens can affect rural areas as a whole. 

Dr. MERRIGAN. Certainly. Thank you for that question. Farmer’s 

markets have proven to be so beneficial. We have, in fact, marked 

Friday Farmer’s Market in our parking lot at USDA. it is very vibrant. Come down at any time. We would love to have you visit. 

Mr. BRIGHT. You may see me. 

Dr. MERRIGAN. Okay, and we are challenging all federal facilities 

to think about putting farmer’s markets on their properties because 

it’s a win-win for everybody. 

The challenge is actually going into under served areas. I have 

been involved with this. It is hard because farmers go into areas 

where there is high crimes and not a lot of income, and so really 

I think we have to be more creative in figuring out ways to provide 

incentives for that to happen, but we do have the Farmer’s Market 

Promotion Program. I hope to build that program over the next 

four years. That has been quite successful. 

We also have the FSMIP Program, the Federal-State Marketing 

Improvement Program where states and other kinds of entities can 

apply to get money to help with farmer’s markets. I thought we 

also recently had an inquiry from the National Endowment for the 

Arts, staff there interested in trying to help farmer’s markets by 

engaging in their enterprise to find ways with design and art to 

bring people into farmer’s markets. 

So there is a lot of energy around those markets now. We count 

4,900 nationally. I would like to come back in a couple of years, sir, 

and tell you we have many, many morel 

Mr. BRIGHT. Good. Madam Secretary, thank you very much for 

your testimony. 

And, Mr. Chairman, I yield back my time. 

Chairman SHULER. Thank you, sir. 

And I would like to have a Small Business Committee turned 

into the Appropriations Committee, which would be really nice. 

[Laughter.] 

13 

Chairman SHULER. I always wanted to chair the Appropriations 

Committee. 

Mr. BRIGHT. I will volunteer. 

Chairman SHULER. At this time I would like to yield to Mr. 

Thompson from Pennsylvania. 

Mr. THOMPSON. Mr. Chairman, I will second that motion. 

I want to thank the Chairman and Ranking Member for this opportunity with this hearing. It is really important, and, Madam 

Secretary, thank you so much for being here and for your obvious 

passion in this area that we are talking about today. 

I want to revisit a little bit on food safety. Obviously that is incredibly important for consumers, and frankly it is important for 

producers as well. There is one isolated scare in some region of the 

country or even a false scare can devastate the producer, the whole 

market, and so we have an obligation to protect certainly consumers and also producers. 

Given the recent scares about food-borne illnesses, what steps is 

USDA taking to work with producers to reduce even minimal risk 

of food borne illness from consumption of specialty crops? 

Dr. MERRIGAN. In early June we received from the industry proposals for a leafy green marketing order. Some of you may be 

aware of that. It came from California where they do have such a 

plan in place. We have a whole marketing order program. We also 

have quality grade standards, maybe as many as 320 now for specialty crop where industry really proposes to us what they think 

those standards should be and we codify them and help them in 

the enforcement of those. 

The latest on the scene is this leafy green marketing order because of some of the concerns that came up around E. coli and 

spinach out in California a couple of years back now I guess it was. 

And when we receive a proposal like that from industry, it triggers a series of events that we do at USDA, and this would go to 

the agricultural marketing service. I used to be the Administrator 

there during the Clinton years. So I love this agency. 

Anyhow, so the agency will hold a series of public meetings 

around the country where people can give their input as we decide 

how to shape this marketing agreement and whether or not to put 

it in place. It is voluntary, but that said if enough of the big players actually are in it, then, while it is voluntary it become de facto 

the law of the land, and so as we have these hearings over the 

course of this next year, we are going to want to hear a lot about 

whether or not this marketing order is going to fit all sizes of operations. 

I mean, safety is not something that only big guys have to adhere to or, you know, there is no exception depending upon your 

size or your region. Everyone has to uphold high safety standards 

of course, but we want to make sure that these programs that we 

put out everyone in the agricultural enterprise are able to meet 

them, and if not, then we need to reconfigure them so that everybody is able to upgrade food safety and still remain competitive in 

the marketplace. 

Mr. THOMPSON. Great. I mean, with your testimony I hear you 

talking about things that USDA is doing with partnership with the 

industry and education and consumer input, and I have to tell you 

14 

those are the types of things that give me a lot of confidence actually in the USDA related to food safety, and frankly, some of the 

concerns I have with some current legislation that was defeated 

yesterday and is coming back, I think, today in terms of specifically 

with specialty crop and food safety, shifting to the FDA versus 

USDA. 

What steps are underway, if any, at USDA to coordinate further 

improvements in food safety for specialty crops? 

Dr. MERRIGAN. Well, we have work that we are doing in microbiological testing. We have a program in place both for pesticides 

and for microbiological contaminants where we go out and we actually get produce from supermarkets. 

So we play the role of citizen and any Mom or Dad who goes into 

the supermarket and gets their food, and then we bring these back 

to the laboratory and then we test them, and we collect data on our 

Website that is publicly available to people of all shapes and sizes 

to analyze, and we use these programs to identify hot spots, emerging problems. 

I think these are very important programs that we will continue 

and grow in the next couple of years to help us make sound decisions. 

Mr. THOMPSON. Thank you. 

It seems to me that the USDA is well positioned to do that, too, 

because you have a presence in almost every county in the country. 

Dr. MERRIGAN. We have a few employees. 

Mr. THOMPSON. Yes, you know, and have been there for support 

of agriculture community from many different perspectives and obviously representing the consumers as well. So just another good 

reasons to make sure that we keep that food safety responsibility 

with USDA and strengthen what you’re doing. 

Mr. Chairman, it looks like my time has expired, and thank you. 

Chairman SHULER. Thank you, sir. 

Maybe we can again defeat the bill again today and keep it with 

USDA. 

At this time it is really a privilege to have a member on the dias 

today who not only has been in the small business, but has been 

in the horticultural business herself, and so Ms. Dahlkemper from 

Pennsylvania probably has the most experience of all of us on the 

Small Business Committee, her own personal experience before she 

became a member of Congress. 

Ms. Dahlkemper. 

Ms. DAHLKEMPER. Thank you very much, Mr. Chairman. Thank 

you for holding this very important hearing. 

And Secretary Merrigan, thank you so much for joining us today. 

As the recession continues to take its toll and climate change 

continues to lead to even more unpredictable weather, it is increasingly important for family farmers to better cope with business risk 

by diversifying their operations. One way to do this is to grow and 

sell fresh fruits and vegetables. These fruits and vegetables are not 

only good for the economy, they are also healthy eating options. 

As a dietician for 25 years, I am very concerned with the obesity 

epidemic. With one in five four year olds now obese, we must find 

ways to provide our children with nutritious food options. 

15 

In 2008, the medical cost of obesity rose to 147 billion dollars 

while the human suffering is even greater. The availability of fresh 

and affordable produce is one component in addressing this tremendous public health problem. 

The 2008 farm bill greatly expanded the USDA fresh fruit and 

vegetable Snack Program and now reaches more than one million 

children in 50 states. This program creates a new partnership between farmers and local schools. Thanks to this program, more 

schools can rely on locally grown products for their school lunch 

programs. 

At the same time, schools are providing healthier meals to their 

students. This is a win-win program, and I am pleased that we are 

discussing how it helps specialty farmers and assured good programs like this can continue. 

I come from a district in Pennsylvania where specialty crops 

along with dairy really are the main agriculture in my district. We 

have seen, for example, this year many of our farmers deal with 

loss in their fruits from a late year freeze. Now we are having unprecedented rain, and so our specialty crop farmers really deal with 

a lot of these issues. 

But I also have this obviously very strong interest in the nutrition side of your program, and in your testimony today you discuss 

a proliferation of farmer’s markets and community gardens, particularly in under served areas, and you did mention the food 

desert, which is something that has been a concern of mine for 

many, many years. There are some food deserts in our schools, and 

I am so glad to see that we are finally addressing that. 

I know you talked a little bit about this refrigerator trucks and 

you talked about some other things. Is there anything else you can 

tell me that you are doing to try to deal with this particular issue? 

Because we have got to get these foods into the places where people 

most need them, and that is really into usually the urban areas, 

these food desert areas. 

Dr. MERRIGAN. Thank you for that question. 

Let me say first in terms of the schools I think that we are trying 

to do better with the help of the 2008 Farm Bill and getting fresh 

product into the school breakfast and lunch programs. For example, we just had a wonderful experience with sliced apples in small 

individual bags going to school children. They loved them. They 

were eaten up, and so I think we are going to expand that. 

And also on the horizon is to do the baby carrots in the school 

lunch program. So we are really looking at having an impact on 

what is served in those programs, and I appreciate what you are 

saying about obesity. 

I actually came from Tufts University, the Friedman School of 

Nutrition Science and Policy where I was the last eight years, and 

we spent a lot of time focused on the obesity crisis. It is really very 

compelling. We have childhood hunger and we have obesity, and 

paradoxically oftentimes the root of the problem is the same, lack 

of options, lack of access to a lot of the specialty crops that we are 

talking about today. 

In terms of getting into the inner cities, some of these good foods, 

I think we, again, have a whole slew of programs at USDA that 

we can reorient it to help here, and I will continue on that matchVerDate Aug 31 2005 07:53 Dec 10, 2009 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\51036.TXT DARIEN
16 

making process to try to help out, and if you know of communities 

that are particularly in need and you want to bring those to our 

attention, we will take a look at those and see what forces we may 

marshal to help out. 

Ms. DAHLKEMPER. Thank you. 

Another program that I have always thought was one of the better programs is WIC because versus food stamps which are very 

necessary obviously, but in WIC, the foods are targeted for the particular needs of the mother, infant and child. 

And you talked a little bit about adding fresh fruits and vegetables to that program. Are there any other suggestions you have for 

improving nutrition in that program to add to the Clinton administration initiatives? 

Dr. MERRIGAN. I think for our suite of programs that help with 

nutrition assistance, one of our challenges is to increase enrollment. We still don’t serve all of the people who are eligible for 

these programs. 

So it is really on our shoulders to get the word out, particularly 

seniors do not apply for benefits that they are eligible for under the 

SNAP program. They think it is not worth the bother. There is a 

stigma associated to it, and we really do between WIC and SNAP. 

We have a whole lot of support for people out there, and we need 

to figure out ways to make sure that people are not locked in their 

homes hungry when there really is help. 

We also do provide a lot of help through food banks. For example, just last week we announced a $14 million buy of cultivated 

blueberries. That’s one of these programs where we can relieve 

market access so that it helps producers. At the same time we are 

going to have fresh product. We are going to have product that we 

can put into our food banks and other nutrition programs. So it is 

a win-win, and we continue to do that and look for good product 

to buy to help out these various programs. 

Ms. DAHLKEMPER. All right. I see my time has expired. I have 

many other questions, but I do appreciate you coming today and 

look forward to continuing to work with you for good nutrition for 

this nation. 

Dr. MERRIGAN. Terrific. 

Chairman SHULER. Would any other member wish to be recognized again? 

[No response.] 

Chairman SHULER. At this time we would like to yield back to 

you again if you need more time. 

Ms. DAHLKEMPER. Thank you, Mr. Chairman. 

I did have a couple of other quick questions. In terms of the specialty block grant program, how much is appropriated for that? 

Dr. MERRIGAN. I do not know. 

Do you guys know the actual number? 

We will have to get back to you. Not off the top of our head. 

Ms. DAHLKEMPER. I appreciate that. 

My other question has to deal with SNAP. I probably am the 

only one on this panel, although I may not be, who actually was 

on food stamps once 30 years ago, and you did bring up the issue 

that I think is really probably at the height of why people do not 

apply for this program and it is a stigma. 

17 

I used to go grocery shopping, and I have told this story before, 

at 11 o’clock at night so that no one would see me using them. As 

a single mom, it is a really difficult place to be for people. It takes 

a lot of pride to be able to go out and use that program, but it is 

a very necessary program. 

But I am trying to think of a way where we can actually 

incentivize better choices, and we cannot be big brother here, and 

we cannot, I think, limit it too much, but I do not know if there 

is any thought or talk going on about how we could actually 

incentivize people to buy more produce, for example, more dairy, 

more of the food we know are more nutritious for them when they 

are using this program. 

And I just throw that question out there because I have been 

asking that all over the place trying to find out what we can do 

here to improve the health of this nation, particularly if you look 

at this obesity issue. We are talking about health care, but you 

know, until we get a handle on the childhood obesity issue in this 

country, we are never going to get a handle on our health care 

costs. 

Dr. MERRIGAN. Well, you raise a perennial issue that for many, 

many years people have talked about whether you put some condition on SNAP benefits in terms of what can be purchased. I do 

know what we can do because we are working within a certain 

statutory regime. We need to do better on the education side. 

We have a billion plus hits on the food guide pyramid Website, 

and yet we know, well, we get the hits of people looking at our 

Websites going up at the same time the obesity epidemic is going 

up as well. So there is a disconnect there, and we definitely have 

an education challenge in terms of getting people to understand at 

least five a day, right? 

Ms. DAHLKEMPER. That is actually one of the benefits of the WIC 

program, the education component. 

Dr. MERRIGAN. That is right. We also have the FNEET program 

at USDA, which is within our research education and economics division. It is a program that has been around for many, many years 

where we have professionals out there doing nutrition education. 

I am very interested from my own work at Tufts University in 

garden base learning, bringing gardens into the schools and having 

children participate in gardens. We found it increases their scientific literacy, their environmental awareness, and it improves 

their willingness not only to try to actually consume fruits and 

vegetables. 

So some of our, I think, interventions need to be targeted at 

young people. So we have a lot of work to do. The farmer’s market 

EBT benefits, again, I think is a really important place where if 

every farmer’s market, you know, allows SNAP participants to redeem their benefits there at farmer’s markets, that is going to be 

a win-win, terrific opportunity there. 

So some challenges, but I think we are making some headway, 

and one of the things I say to people is President Obama, I believe, 

when he was younger, his mom was a food stamp recipient. There 

is no shame in it. People need it, and what we are seeing in this 

hard time is that there are a lot of families who are coming into 

our offices for the first time, people who both spouses have lost 

18 

their jobs. They never thought they would see themselves in this 

situation, and there are people out there who need help, and they 

need to come in, and there should be no shame to it. 

Ms. DAHLKEMPER. Thank you very much, and I yield back. 

Chairman SHULER. Thank you, Ms. Dahlkemper. 

Madam Secretary, thank you so much for your attendance here 

today and for your testimony, and we look forward to working with 

you, and if there is anything that we can do on behalf of the Committee and the members on the dias, we would love to be able to 

help and support anything that we can to be able to help our local 

growers and American workers in producing things here in the 

U.S. 

So thank you. 

Dr. MERRIGAN. One final word, Mr. Chairman, if I may. 

Chairman SHULER. Yes, ma’am. 

Dr. MERRIGAN. There were a number of comments about the food 

safety legislation. I just want to be clear that the administration 

is supportive of the bill that went through yesterday. I do not know 

what may be emerging today. I know this is a moving target, but 

as far as I understand, it does not really change our jurisdiction 

at USDA, but it makes some fine tuning of what we can do that 

we think we will make our program stronger. So it is not a shift 

from FDA to USDA as I understand it at this time. 

Chairman SHULER. Thank you. 

Dr. MERRIGAN. Thank you, sir. 

Chairman SHULER. If the second panel would come forward, 

please. 

Once again, I want to thank the gentlemen for being here, and 

we look forward to hearing your testimony. Our first witness is Bill 

Holbrook. Mr. Holbrook is the owner of Cold Mountain Farms in 

Waynesville, North Carolina. He grows specialty crops from peppers, tomatoes, cucumbers, burley tobacco on the 35 acres of his 

farmland. 

Mr. Holbrook, you will be recognized for five minutes. 

Thank you. 

STATEMENT OF BILL HOLBROOK 

Mr. HOLBROOK. Chairman Shuler, Ranking Member 

Luetkemeyer, thank you for allowing me to testify today. 

My name is Bill Holbrook. I am a full-time farmer from 

Waynesville, North Carolina, which is in the Chairman’s district. 

I grow specialty crops such as peppers, tomatoes, cucumber and 

burley tobacco on 35 acres. I am the sixth generation to farm my 

land. 

Running a small family farm is about survival. Unpredictable 

weather, disease pressure always makes raising a crop a challenge. 

The risk I have in my crop is concentrated, and the slightest disruption, whether draught or new regulations can seriously impact 

my operation. I am able to keep farming by being resourceful and 

creative. Farming is not easy, but I am passionate about it. And 

so I keep planting a crop each year with the help of god and my 

family. 

The 2008 Farm Bill contains the specialty crop title. This title 

would expand opportunities for direct producer to consumer marVerDate Aug 31 2005 07:53 Dec 10, 2009 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\51036.TXT DARIEN
19 

keting, improve farmer’s market roadside stands, and help fruit 

and vegetable producers address food safety, pests, and disease 

management issues. These provisions should benefit me as a producer as well as the general consumer. 

In addition, the Farm Bill also provides states for funding for 

various programs through the specialty crop block grant initiative. 

I anticipate these grants will help expand markets for my crops by 

increasing marketing and promotional opportunities. I am hopeful 

Congress will fully fund the Farm Bill’s pest and disease detection 

and control program because recent regulations issued by EPA restricting the use of fumigants by requiring larger setbacks are a serious threat to the future of my farm. 

The Farm Bill does contain risk management tools, such as crop 

insurance. I understand the value of crop insurance. In fact, I purchased multi-peril crop insurance for my crops for many years. The 

expense became too unbearable for me to bear. 

An alternative, I purchased NAP coverage, non-insured crop disaster assistance. At best, this covers less than one-third of the 

value of my crop. The NAP program is very inadequate as a risk 

management tool, especially for specialty crops. 

Overall the 2000 farm bill should help my farm if it survives 

other pending legislation in Congress. The first example is the food 

safety bill in the U.S. House of Representatives. 

My farm has just completed the USDA food safety audit. This 

audit showed me that most small farms do not have the moneys, 

personnel capabilities as do large corporate farms to pay for water 

testing equipment to develop standing operating procedure manuals. Some of these procedures required in the audit are just not 

practical and it will pit farmer against farmer. 

Also, my farm probably cannot survive the Clean Water Registration Act pending in the U.S. Senate. This act would require buffers 

along all waters. These buffer areas reduce the amount of crop in 

the fields adjacent to these waters. To farm you have to have land 

and water. If either of these are eliminated and/or reduced, this becomes a real threat to the survival of my farm. 

In closing, I believe that one of the greatest threats at this time 

to my farm or any small farm is regulations that increase cost and 

limit the use of any part of the farm. As a subcommittee, you can 

help me continue to farm by insuring that the voice of the small 

farmer is considered as important legislation is drafted. 

Thank you, Mr. Chairman, for allowing me to testify at this 

Committee today. I look forward to your questions. 

[The prepared statement of Mr. Holbrook is included in the appendix.] 

Chairman SHULER. Thank you, sir. 

Our next witness is Mr. Kenny Barnwell. Mr. Barnwell is the 

owner of Kenny Barnwell Orchards in Edneyville, North Carolina, 

and has been in the apple industry since 1980. He is involved in 

numerous boards and committees, including North Carolina Apple 

Growers Association Board of Directors and North Carolina Horticultural Council. 

Mr. Barnwell, you will be recognized for five minutes. 

20 

STATEMENT OF KENNY BARNWELL 

Mr. BARNWELL. Thank you. 

Commissioner Shuler, Ranking Member Luetkemeyer, my name 

is Kenny Barnwell. I am an apple farmer from Henderson County, 

which is located in the Chairman’s district. 

When I returned to the family operation after I graduated from 

Greensboro College in 1980, the apple industry in Henderson County was a thriving industry. At that time there were 33 packing operations and almost 10,000 acres of apple orchard. Today there are 

only four packing operations and about 5,500 acres of apple orchards. 

These numbers, however, do not accurately reflect the present 

condition of the industry. In the late 1980s the apple market in 

Henderson County began to disappear. This change was brought 

about by the use of controlled atmosphere storage in Washington 

State. This change enabled the growers in Washington State to 

market apples year round, which removed the window when North 

Carolina had been marketing most of its apples, a time that occurred before other apples were available for the new crop. 

With the loss of this market advantage and the depressed prices 

of early apple production, many growers went out of business or reduced their acreage. Most of the rest of the growers then began to 

rely more heavily on processing great apple production. The processing apple market was a way for growers to balance their apple 

production mix. Growers produced less great apples, but made up 

the difference by producing more processing grapefruit. 

This business model worked until the juice processing plant in 

Mountain Home and the Berger processing plant in Ashville, North 

Carolina and the National Fruit Processing Plant in Lincolnton all 

closed within about a year and a half of each other. 

As a result, growing apples in Henderson County in the 1990s 

was a very challenging undertaking. The loss of markets and the 

boom on real estate put a lot of pressure on many growers to make 

hard decisions about what they were going to do for the future. 

At this time many new varieties of apples were shown to work 

very well in the climate in Henderson County. Most of the other 

research was done at the Mountain Research Station in Fletcher, 

North Carolina. This research station is operated by N.C. State, 

A&T, and the North Carolina Department of Agriculture. 

This new production is now coming in full production and has 

opened many new markets for our apples. The local grown movement has been important in our area because we are very near 

large markets, Atlanta, Charlotte, and all of Florida. 

Also, a new processing plant to slice apples has been built in 

Henderson County by the Henderson family. This plant production 

and many of the fresh apples produced in Henderson County are 

now going into the school’s nutrition program thanks to increased 

funding from the new Farm Bill. 

The Farm Bill also provided much needed funding for research 

and mechanical harvesting of apples. With new methods of harvest, 

we would be less dependent on migrant labor. 

My own route in the apple industry has followed a changing 

course. When I returned to the farm, I worked for my uncle for 

nine years in the 1980s and then went into business for myself. I 

21 

bought an apple orchard in 1983, and then rented additional acreage in 1989 and became a full-time farmer. Since then I have purchased part of a packing house where we no longer pack apples. 

We have changed from older varieties and large trees to almost all 

new varieties and dwarf trees. 

In that time I also worked as a federal crop insurance adjuster 

and have served on most of the agricultural committees that you 

can serve on in Henderson County and in North Carolina. The 

apple industry in Henderson County is now strong and doing very 

well. However, the industry is still very fragile and faces many 

challenges. Some of these challenges are the increased cost of production, the new regulations in food safety, and the questions about 

availability of enough labor to harvest the crop. 

We as growers feel that we will be able to deal with this changing environment with the help of research and continued recognition that apples and other specialty crops are an important part of 

agriculture in the United States. Without the funding in the Farm 

Bill, we growers could not continue. We must have federal crop insurance to mitigate the inherent unpredictability of the weather as 

we experienced in 2007 when most of the crop was destroyed in an 

Easter freeze. 

Chairman Shuler came to our packing house and met with growers twice to give much needed support in Edneyville and in Washington. His hard work helped apples and other specialty crops be 

included in a crop disaster bill that provided much needed help in 

a very difficult time and is one of the reasons I would call the apple 

industry in Henderson County healthy. 

As we producers face many challenges, I feel that we need to be 

able to meet them all with the continued help and understanding 

from members of Congress like yourselves. 

[The prepared statement of Mr. Barnwell is included in the appendix.] 

Chairman SHULER. Thank you, Mr. Barnwell. 

Before I introduce our next witness, as you can tell three of these 

gentlemen are from the 11th District, which is just an honor to be 

able to represent. As we saw the Easter freeze and we saw the 

floods obviously come through Haywood county, we have seen devastation, and I just want everyone to know what an impact these 

three gentlemen have had in our communities in a day in and day 

out basis with the volunteerism, the things that they do, the work 

that they associated with, the committees that they are on. They 

truly are the backbone of our communities and what they are able 

to establish. 

And so before I introduce Mark I wanted to just tell how much 

I appreciate what they do in our communities, especially when it 

comes to our farmers and the workforce. 

Our next witness is Mark Williams. Mr. Williams is the Chief Financial Officer for Flavor 1st Growers & Packers in Horse Shoe, 

North Carolina. Mr. Williams is also Commissioner, Liaison of the 

Agricultural Advisory Board in Henderson County. 

Mr. Williams, you will be recognized for five minutes. 

22 

STATEMENT OF MARK WILLIAMS 

Mr. WILLIAMS. Thank you, Chairman Shuler, Ranking Member 

Luetkemeyer and other members of the Committee. Thank you for 

the opportunity to present today. 

As mentioned, I do serve as Chief Financial Officer for Flavor 1st 

Growers & Packers. Additionally, I serve currently as a County 

Commissioner in Harrison County, North Carolina. 

I also happen to be a part owner of a small family farm growing 

apples as well as some ornamental trees. 

If I may tell you a little bit about Flavor 1st, it is a grower, packer, shipper, and a repacker specializing in tomatoes, sweet corn, 

and other Southern vegetables. We source product year round and 

have operations from Florida all the way up to North Carolina with 

our primary facility being located there in the State of North Carolina. 

We also partner with and depend upon a number of small growers to serve our customers, and our customer base basically includes larger chain type stores, grocery stores as well as food service companies. 

We certainly appreciate the inclusion of specialty crops in the 

Farm Bill, and we hope to see continued support in the future. Today’s topic, the future of specialty crops for small farmers, is a 

broad one. I want to briefly touch upon three different issues, good 

safety being one, risk management, and also credit access. 

In regard to food safety, the United States arguably has the 

safest source of food in the world. Over a billion servings of produce 

are consumed each day in the United States, and it happens with 

almost without a food safety incident. Of course, one is too many. 

At the same time, consumer confidence is probably at an all time 

low, which presents a threat to the industry. In the federal government I feel like can help protect public health and also help build 

consumer confidence when it comes to consumption of produce, but 

in doing so, it does have to be cautious so as not to devastate small 

family farms or entire commodity groups. 

Public policy principles should include commodity specific approach based on the best science available. I think it needs to be 

consistent throughout the U.S. and have the same standards for 

produce that is being imported into the country. I think that is critical. It needs to be federally mandated with reasonable oversight 

just to give the credibility. 

Additionally, we cannot afford to have multiple standards of food 

safety audits. Currently different customers require audit programs 

or standards which is inefficient and costly to produce or needs to 

be tiered levels of standards I feel like based on size and customer 

base. With too stringent regulation a small farmer simply may 

choose to quit or economically be forced out of business. Flavor 1st paid approximately $25,000 in this past year just to 

set up our current food safety plan that we have in place, and that 

is the initial requirement, plus the ongoing cost. Small farmers 

simply cannot afford that. 

A sound science based program is also imperative as once a recall is issued, there is immediate impact and even if there is no 

fault by producers of the product implicated, damaging effects can 

last for years. Flavor 1st lost an estimated $400,000 last year due 

23 

to the Salmonella scare with tomatoes, and to my knowledge not 

a single tomato tested positive for the bacteria. After the event 

there was no government statement clearing tomatoes. 

On the issue of risk management, others have and probably we 

will talk about this particular topic, and I addressed it in my written testimony. I will simply say the federal crop insurance program 

does need work concerning specialty crops. We have some of the 

highest value products on a per acre basis, and there is a high level 

of cost associated in bringing those crops into production. Availability to cost effectively protect against loss is needed. 

Additionally, our growing seasons often do not coincide with 

USDA’s crop years, and past programs have favored some areas 

over others and distorted markets. 

Finally, on the access to credit, it is essential for a successful 

business, particularly important to agriculture given their susceptibility to weather related events and other uncontrollable factors. 

The farm credit system is operated in a responsible, conservative 

manner for many years. They are not immune to the credit crisis. 

Their sources of funds have constricted along with the rest of the 

global banking system. 

In regard to commercial banks, we have experienced in this past 

year an increase, what we are looking at, of rates being offered of 

250 basis points higher than what we saw last year even though 

the markets actually would indicate that the price should be cheaper. We also are seeing more stringent balloons. 

Loan guarantees have their place. Global interest rates have 

their place in terms of government help, but the underwriting process and application process tends to be burdensome, and there is 

little enticement for banks to use FSA guarantees. 

Most farmers that remain in operation today are good managers. 

Given the tremendous risks associated with their business, all they 

are asking for is a fair chance to continue to operate in this unusual economic circumstance that we currently face. Nobody is 

looking for handouts. 

So appreciate your time. 

[The prepared statement of Mr. Williams is included in the appendix.] 

Chairman SHULER. Thank you, Mr. Williams. 

Our next witness is Rich Hudgins. Mr. Hudgins is the president 

and CEO of California Canning Peach Association, Sacramento, 

California. He is also testifying on behalf of the National Council 

of Farmer Cooperatives. 

Mr. Hudgins, you will be recognized for five minutes. 

STATEMENT OF RICH HUDGINS 

Mr. HUDGINS. Chairman Shuler, Ranking Member Luetkemeyer 

and members of the Subcommittee, my name is rich Hudgins, and 

I am president and CEO of the California Canning Peach Association, a grower owned marketing and bargaining cooperative which 

represents nearly 500 growers who produce 80 percent of the nation’s canned peach supply. 

I am also a council member of the National Council of Farmer 

Cooperatives, or NCFC. On behalf of my California cling peach 

24 

grower members and, more broadly, of the more than two million 

farmers and ranchers who belong to one or more farmer co-ops, I 

appreciate this opportunity to submit testimony regarding issues 

facing co-ops in the specialty crop industry. 

As you may know, farmer co-ops are businesses owned and controlled by farmers and ranchers and offer the best opportunity for 

our nation to realize the farmer focused ideal of an enduring, competitive agricultural industry. Farmer co-ops supply just about any 

agricultural input imaginable, provide credit and related financial 

services, including export financing, and market a wide range of 

commodities and value added products. 

Earnings from these activities are returned to their farmer members on a patronage basis, helping to improve their income from 

the marketplace. These earnings are then recycled through rural 

communities as farmers and ranchers purchase goods and services 

from local businesses. 

Established in 1922, the California Canning Peach Association is 

the nation’s oldest farm bargaining association. As a farm co-op, 

the CCPA is owned and directed by its grower members and dedicated to serving their needs with a variety of services. Our average 

member grows just 40 acres of peaches and typically farms other 

tree crops as well. 

Many of the issues before Congress have the potential to impact 

farmer co-ops, and especially the future of the specialty crop industry. Those issues include climate change, integration and labor, 

food safety, as well as water, international trade, tax issues, and 

Farm Bill implementation. And believe it or not, farmer co-ops also 

have a stake in pension issues, especially in light of the market 

crash last year. 

I will highlight just a few of these issues today, but urge the 

Committee to refer to my written statement for more details. 

While NCFC supports an energy policy that maximizes energy 

independence, farmer co-ops and their members are very concerned 

that current proposals will result in higher business costs, including those related to energy, fuel, and fertilizer. 

For specialty crop, there is very little data on the potential gain 

or the impacts that this diverse sector may face from a cap and 

trade program like the one recently passed by the House. Production of many fruits, vegetables and tree nuts is a resource intensive 

process involving considerable investment in inputs and energy. It 

is unclear if or how specialty crop producers will benefit from an 

agricultural offsets program. 

Furthermore, those agricultural products with the least opportunity to participate in an offset market, specialty crops for instance, will have the highest sensitivity to competition from international competitors, such as China and South America, who are 

not subject to the same emissions reduction standards. 

Another vital issue to the future of the specialty crop industry is 

immigration and labor. Farmer co-ops and their member owners 

must have access to an adequate, dependable, and flexible labor 

force in order to insure their continued competitiveness in the 

international marketplace. 

Thousands of U.S. family farmers provide this country with the 

lowest cost, safest, and most reliable food supply in the world, but 

25 

in order to do so, they need an immigration policy which permits 

temporary guest workers to pick our fruits and vegetables, milk 

our cows, and perform all the other jobs that are being filled today 

by workers who lack legal status. Just as we cannot have a thriving Wall Street while Main Street suffers, we cannot having a 

thriving Main Street in rural America if more of our food production is forced to relocate outside the borders of the U.S. 

The question for members of Congress is whether the harvest 

will place in our country or in a foreign country. 

A cornerstone to President Obama’s domestic policy agenda is 

the goal of energy independence. Wouldn’t it be ironic if we developed a new strategy for energy independence only to find ourselves 

more reliant on something even more vital to our country than oil, 

the nation’s food supply. 

The final issue I will mention is the Child Nutrition Act which 

must be reauthorized this year. Whether it is the National School 

Lunch Program, the School Breakfast Program, and the WIC Program, NCFC supports increasing the consumption of all fruits and 

vegetables without pitting one form of fruit or vegetable against 

another. Sound science and the USDA’s dietary guidelines do not 

distinguish between fresh, canned, dried or frozen fruits and vegetables, and we encourage Congress not to make a distinction either. 

Our goal should be increased fruit and vegetable consumption 

which will lead to a healthier future for all sectors of the society 

and reduce future health care costs for our nation. 

In closing, let me thank you for the opportunity to testify today. 

We appreciate your attention to these issues, and I would be happy 

to respond to any questions. 

[The prepared statement of Mr. Hudgins is included in the appendix.] 

Chairman SHULER. Thank you, sir. 

At this time I would like to yield to the Ranking Member for introduction of our next witness. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

It is my pleasure and honor to introduce today Mr. Anderson. 

Jim Anderson is Executive Director of the Wine and Grape Board 

for the Missouri Department of Agriculture. As Director, his duties 

are to coordinate with wholesalers, restaurants, retailers, and the 

general public on Missouri wines and juices. 

As stated earlier, as the former Director of Tourism, I have 

worked with the Wine and Grape Board. It is exciting to have them 

here today, and I look forward to your testimony, Mr. Anderson. 

Thank you. 

STATEMENT OF JIM ANDERSON 

Mr. ANDERSON. Thank you, Ranking Member Luetkemeyer. 

Chairman Shuler, thank you very much and also the Committee. 

I want to thank you for the opportunity to be here. 

My name is Jim Anderson. I am the Executive Director for the 

Missouri Wine and Grape Board in Jefferson City, Missouri. 

The Missouri Wine and Grape Board is responsible for researching, developing and promoting the selling and marketing of grapes 

and grape products grown in Missouri. Missouri now has 90 

26 

wineries and 1,500 acres of grapes planted presently. Made of 

mostly small and mid-size wineries in the state. Right now the 

state contributes about $701 million to the state’s economy. 

As an emerging and growing specialty crop industry that is populated by small and family farms, we are pleased to see the mandatory funding for specialty crop programs is included in the Farm 

Bill, considering Mr. ANDERSON. s now that make up 50 percent of 

the current farm gate value for the United States, providing money 

for research, marketing, quality improvement and good investment 

for agriculture and the future of small farms. 

We are particularly pleased to see the inclusion of the specialty 

crop block grant program, in addition to clean plant network as 

permanent programs in the Farm Bill. These two programs that 

the Missouri wine and grape industry will directly benefit from. 

The specialty crop block grant program was initially established 

as a stand-alone program in 2001. But since that time these grants 

have been used by the industry nationwide for marketing research 

and wine trails, establishing wine and cuisine partnerships, developing online educational manuals for new and existing wineries 

and growers, procurement for a more efficient wine processing 

equipment and other projects to help the industry producers. 

Missouri began using specialty crop block grants in 2004 by 

funding a multi-year project with a goal of reducing the shortage 

of adequately educated young people entering the wine and grape 

industry. A network of grower based demonstration vineyards 

stretching across Missouri. The Missouri River Hills region, west 

central part of the state allows local FFA chapters, vocational ag. 

classes in high school, and producers to participate in these onfarm demonstration programs which gives the tools to start their 

own vineyards in the state. 

In fiscal year 2008, Missouri Department of Agriculture started 

a specialty crop grant program calling for projects to enhance Missouri specialty crops. One special project is a voluntary online registration database for farmers such as grape growers, organic growers, special farmers and other producers or pesticide sensitive specialty crops to alert applicators of crop locations. This will help prevent damage, and danger to crops by legal applicators and co-ops 

that commercially spray. 

Presently fiscal year 2009 grant applications are being collected 

at this time for the state specialty crop block grant program. The 

National Clean Plant Network is a new program with mandatory 

Farm Bill funding and will be involved in decisions that are about 

importing and clearing new varieties and developing plans to insure that plants available commercially are disease free. 

Plant centers will be used for diagnosis, packaging elimination 

services and the effort to produce clean plant material, including 

vines for propagation, and maintain blocks of pathogen tested plant 

material. The clean plant material will be made available to states 

for certified plant programs as well as private nurseries and growers. 

Missouri is one of the states that will be in the loop, in the network through the University of Missouri at Columbia and the Missouri State University in Springfield, Missouri. 

27 

Healthy plant stock is a key to cost effective production of horticulture crops, such as fruit trees, nuts, and grapevines. Healthy 

plant stock is used to propagate, requires fewer chemical inputs 

and produces higher crop yields and better crop quality than common plant stock. 

Healthy planting stock is necessary for U.S. agriculture to remain internationally competitive and economically viable. The most 

effective approach to producing healthy plant stock is through programs that screen viable plant selections for viruses and other diseases that can spread contaminated plant stock. 

Quarantined services provided by clean stock programs reduce 

the chance of introduction of exotic pests that also can be difficult 

and costly to control. For example, the cost planting a vineyard is 

$10,000 to $15,000 per acre in Missouri, and these vines do not 

bear fully mature until the fifth year. 

A grower generally plans to have the vines producing for about 

30 years. Therefore, if a disease shows up and destroys part of 

their crop in, say, eight growing years, the grower has not only lost 

production years, but also stays with tremendous cost of replanting. Having a clean plant stock generally reduces or eliminates the 

risk of such a loss. 

The grape and wine industry’s economic impact is significant in 

areas not affected in most other agricultural industries. When 

wineries are built, bed and breakfasts are also put in, restaurants, 

hotels, gift shops, artisans and other tourist attractions soon follow. 

As the industry matures, the clusters of tourism are developing 

statewide. 

The industry also benefits other businesses, such as oak barrel 

businesses in Missouri, stainless steel tank manufacturers, chemical and equipment dealers, wine wholesalers, and retailers in the 

state. This rural economic development is common and can be seen 

in other States, such as California, New York, and Oregon. 

Presently, about a million people hit Missouri wineries every 

year as far as tourism. As a tourism cluster develops in these rural 

areas, small producers and businesses can grow, and it helps benefit the area. 

In 2007, the Missouri wine industry paid about 39 million in 

state taxes and 28 million federal taxes and provide over 6,000 fulltime jobs. Missouri’s 1,500 acres of vineyards and 90 acres or 90 

wineries are made up of small farms with an average of less than 

15 acres of grapes and family wineries of about 10,000 gallons, 

what they produce. 

Data indicates that grape and wine production in Missouri offers 

sustainable growth in jobs, income, and tax revenue to the state. 

With eight percent of the wine market share currently being served 

by Missouri wineries, the opportunity for growth is excellent. 

In conclusion, the Missouri Wine and Grape Board strongly supports the Farm Bill and specialty crop industry in the United 

States. 

Thank you for my testimony. 

[The prepared statement of Mr. Anderson is included in the appendix.] 

Chairman SHULER. Thank you, Mr. Anderson. 

28 

Mr. Williams, as you look at the possible expenses that could 

come forward from new legislation from Congress based upon what 

was voted on yesterday and defeated in the House on food safety, 

obviously I think we are all in agreement that food safety is very, 

very important. No one would deny that. 

But what added expense would that place upon you as a small 

growers? What added expenses are you looking at that it will cost 

you, and what impact will it have to your bottom line? 

Mr. WILLIAMS. There is a great deal. Initially, the initial costs 

are bringing facilities up to standards, and that can be rather expensive, particularly for family owned farms. Oftentimes, that will 

be older facilities that may never be capable of being brought up 

to standard at a reasonable cost. That is the initial cost. 

I think the bigger cost is the ongoing cost, the administrative 

cost. The record keeping is enormous, and that is just basically 

right now to meet some of the standards that have been set in 

place, the common practice particularly that the chain stores are 

already requiring. This is not a government requirement, but requirement by the customer base. 

It is very extensive. So you are actually looking in many cases 

having to employ additional labor just to keep up and to administer 

the programs. Those are things which are astronomically expensive 

and could be devastating from my viewpoint to the small farmer. 

Chairman SHULER. Mr. Anderson, how about you, I mean, in the 

wine industry? 

Mr. ANDERSON. Well, we see that in similar ways that it does affect us, and it is a growing concern. 

Thank you. 

Chairman SHULER. Mr. Barnwell, when we are talking about the 

different markets that the 2008 Farm Bill has expanded, what part 

has the USDA played in helping you expand those markets? 

Mr. BARNWELL. Well, particularly in Henderson County, one is 

being into the schools. It has been very, very hard for a long time 

to get local produce in there. It has made it more accessible. It also 

is buying all of those sliced apples that are working very well in 

the nutrition part for Mr. Henderson, and also the local farm markets and some things like that it is supporting. 

There is a really good market in Ashville. The state farmer’s 

market is there. We have got the Curb Market in Harrisonville, a 

Tail Gate Market that is actually done in the Commissioner’s parking lot in Hendersonville. Those are some things that it has specifically done and helped to support for us. 

And the new money for some of the grants on the export markets 

is also there, but we had not seen that direct effect yet in our area, 

but we see the direct effect of the nutrition part of the bill. 

Chairman SHULER. And correct me if I am wrong, and maybe Mr. 

Williams has more detail being a Commissioner, but I think Henderson County is number two in the state of a state that is second 

in the country of being diversified in cash crops. 

Mr. WILLIAMS. That is correct. Total crop production, it does rank 

second in the State of North Carolina. We are quite proud of that. 

Chairman SHULER. Absolutely. Maybe Mr. Luetkemeyer will ask 

about tourism. That may be a really good one to ask. 

[Laughter.] 

29 

Chairman SHULER. It is really good. I will not give it away, but 

they do a great job in Henderson County, especially with their apples. 

Mr. Holbrook, talk to me about crop insurance. I know in your 

testimony you talked about how difficult it has become, the added 

expense. You know, what added pressure does that put on your 

farm? What added pressure does it put on you personally? 

And obviously with loans, if there are outstanding loans, they are 

not necessarily looking at you, but maybe from your neighbor farmers. How difficult is it? They do not have the crop insurance to get 

the loans and how that plays an important, vital role within the 

bottom line, but obviously the financial structure of the company. 

Mr. HOLBROOK. The crop insurance, I have taken multi-peril crop 

insurance every year since I have been farming. In 2004, when 

Ivan and Frances came through and flooded my fields, I got up one 

morning and what am I going to do now? Well, I have got crop insurance. I did not get a dime out of it. 

So that expense, some farmers did not have the insurance, could 

not afford to guy it. So the cost kept going up, and eventually I just 

dropped it. I have NAP insurance now, which would cover very little of it if there is a loss. 

Raising tomatoes and peppers, they are high capital crops. The 

average prices is around $9,900 dollars an acre just to get a crop 

in and harvest it. We need some type insurance back-up for that 

much expenditure. It is a very important part of our farm, insurance, but it has to be able to be manageable and workable for us 

when we do need it and in disasters like we had in ’04. 

Chairman SHULER. Why wasn’t it covered under the insurance? 

I mean that was a devastating flood. I remember seeing your peppers floating down the river through the middle of Canton. 

Mr. HOLBROOK. Yes, I gave them all to Canton. 

Chairman SHULER. Every single one of them. 

[Laughter.] 

Chairman SHULER. You guys would not believe it, but I mean 

there were peppers everywhere. 

Mr. HOLBROOK. It was eight foot deep in my field. 

The reason it did not help me primarily I insured for a 65 percent coverage. In other words, if I harvested over 65 percent of the 

crop, then there is no coverage. And on September 8th when it 

came, I had already harvested 70 percent of the crop. It does not 

matter that the price that I had already harvested the crop at 70 

percent of it. I did not matter what the price was, but I had harvested over the allowable 65 percent coverage I had. That is the 

reason it did not cover it. 

Mr. Hudgins, before I yield to the Ranking Member, in canned 

peaches, are there competitors in the import market in canned 

peaches? Are there competitors out there from other countries that 

you are having to compete with? 

And if you are, then what are some advantages they have that 

you may not have? 

Mr. HUDGINS. We face significant international competition. 

Today the largest player internationally in terms of imported product into this country is China. The advantages there would be very 

apparent: low labor cost. So when it comes to our ability to compete 

30 

internationally, we cannot touch the Chinese, and no one else can 

either. 

Our argument would go back to more of the quality issues, the 

reliability of the product, the fact that we have a domestically produced product that is available in a timely manner, but when we 

look at the Chinese today, the Chinese are counting for more than 

70 percent of the imported product coming into this country today. 

It is a real challenge. 

Chairman SHULER. And that is really a shame. I mean, if you 

look at it, legislation from Congress, you know, regardless of the 

administration, Democrats, Republicans, you look at more added 

pressures and restraints on our local farmers, which makes it more 

difficult for them to produce. 

We went from 35,000 acres of producing apples in Henderson 

County now to 5,500 acres, but the outside world does not have to 

abide by those same requirements and regulations that we are having to push our farmers to do. 

I certainly think if we were to require those same requirements 

and level the playing field, that we would be what I have been 

talking about earlier, net import and net export. I think we would 

be then exporting and have a much stronger exportation of our 

fruits and vegetables and allow the backbone of all of our communities in the rural area, which is our farmers, to be able to support 

their families. 

I mean, I remember 20, 30 years ago—I am only 37—but all of 

the communities, when you looked at the people who were on the 

bank boards, who are financially very strong in the community, it 

was all of our farmers, and now our farmers are struggling day in 

and day out, and we have got to put our farmers back on the top 

of the economic structure in our communities. 

That is one of the things that I know the Ranking Member and 

I have had a couple of hearings already based upon trade, and if 

there is one area that we can really focus on, textiles would be obviously great for North Carolina, but our farmers particularly 

would be a very good place for us to start and look at leveling that 

playing field if we are going to have any type of continuation of 

small farmers and small ag. in our country. 

So at this time I will yield to the Ranking Member, Mr. 

Luetkemeyer, for his questions. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Some of the themes that we have seen so far have been crop insurance. We need to find a new way to revamp the program. Obviously it is not working. It is not effective. It is not something that 

can really bring some relief in situations that you all are engaged 

in. I think that is one thing that we need to take a look at here. 

Import standards the Chairman just mentioned. I think it is another thing that we need to take a look at as well, and perhaps, 

Mr. Chairman, we need to take a look at maybe doing a report of 

our findings here today to submit to the different other folks who 

would be involved in these things or have further hearings that we 

can develop some of these things. 

So I think these gentlemen here today have really pointed out 

some problems with specialty crops that I think need to be addressed. 

31 

The Clean Water Act was brought up by Mr. Holbrook. We had 

a hearing on that, I think, last week in our full Committee, and 

it is a huge issue in my district from the standpoint they have a 

lot of crop, a lot of livestock production in my district, and it just 

caused all kinds of problems. 

So what are your concerns with that, sir? I know you mentioned 

it in your testimony. I would like to see you follow up with some 

information on that. 

Mr. HOLBROOK. Thank you. 

My concerns with the Clean Water Act is it requires certain buffer areas. In Western North Carolina, my average field is like four 

acres. You know, I have got eight different fields, and all of them 

join waterways, and if they take a buffer area and some of the buffer areas require we take the whole field because they are narrow 

and long running with the field. It would take the whole production 

area out of my farm. That is one of the reasons that I resent it. 

Mr. LUETKEMEYER. Do you have any problems with runoff into 

your water areas, for instance, the herbicides or pesticides or fertilizers that you use? Is there a problem with that? 

Mr. HOLBROOK. No, sir. I am glad you asked that question. I am 

a member of the Haywood Waterway Association, which is a nonprofit organization in our county that watches the water quality, 

and the Pigeon River that runs through my farm runs through developments, residents, farms, 100 acres of tomato and pepper 

farms, and the water quality was ranked higher than it is coming 

out of the Smoky Mountain National Park there at Chattaloochee 

Creek. So we are doing a good job. 

And most of our land is flat. It does not erode, and we have to 

be along waterways, and therefore it is in bottomland. 

Mr. LUETKEMEYER. Very good. Mr. Barnwell, what about you? 

Are you experiencing any problems with the Clean Water Act herbicide and pesticide runoff, anything like that? 

I know with orchards I am sure you spray. 

Mr. BARNWELL. Oh, yes, a lot. We had the Mudd Creek Watershed Project came in and tested specifically the Lewis Creek watershed, which two of my biggest orchards sit right on, and the reason 

is it has got the most apple acreage of any watershed in Henderson 

County, and I cooperated with them. I told them what I was spraying with and let them test below my orchard. 

That went on for about a year and a half, and they stopped the 

thing before they wrote their conclusion because they couldn’t find 

anything. 

Then they came back another year later with their findings, and 

unfortunately they did not use good scientific methods. They had 

formed their conclusion and did not have the details to work it up, 

and they were funded by the Clean Water Trust in North Carolina. 

And when the Assistant Commissioner of Agriculture presented 

the results to the head of the Clean Water Trust, as we presented 

them from the agriculture community, they pulled the money from 

that research project. They left. 

We deal with it a lot. We are good stewards of the land. We have 

reduced the amount of pesticides, herbicides that we put out. We 

have scouts that travel orchards. So we only spray with what we 

need to. I use a computerized spray that uses sonar, reads the 

32 

shape of the tree and turns it off where there are spaces in the orchard or spaces where there are no limbs. And we work very hard 

to be very good stewards of the land. 

There is trout in the stream between two of my orchards. There 

is a culvert there, and I have seen trout swimming in that stream. 

So we have worked very hard to be very good stewards, and I want 

to leave that land to my grandkids just like my grandfather did to 

me, and I want to make sure it is as good or better when they get 

it than it was when I got it. 

Mr. LUETKEMEYER. I think that is one of the problems that we 

have with the Clean Water people. They do not understand that 

farmers are probably better stewards of their property than they 

would be themselves. I appreciate your testimony. 

Mr. Hudgins, you made the comments with regard to climate 

change about costs. Can you expand on that just a little bit? 

Mr. HUDGINS. Well, certainly, With regard to— 

Mr. LUETKEMEYER. Well, you made the comment that said with 

the impending climate change, I guess cap and trade, you are looking at the increased cost of production. Apparently you looked at 

the bill, and you represent 80 percent of the peach production. You 

are going to be impacted significantly, I would assume. 

Mr. HUDGINS. Yes, to the extent that our fertilizer costs increase 

and our fuel costs increase, as I referenced in my remarks earlier, 

our world today is under severe pressure from imports coming in 

from China and from Greece and from South Africa, Chile, and to 

the extent that we find ourselves less competitive with the global 

producers of our canned peach products, we will lose more of our 

domestic market to lower cost imported product entering this country. 

At this point it appears very doubtful that we have the ability 

to pass on higher farm gate costs back through the food chain, and 

there is a real concern that we are already at the lowest bearing 

acreage position that our industry has been at in the last 50 years, 

and so there is real concern about our ability to sustain the industry if we have another layer of cost imposed on peach growers that 

we cannot pass on into the marketplace. 

Mr. LUETKEMEYER. I know I am about out of time here, but Mr. 

Anderson, just very quickly, I know that you made comment about 

the research dollars in the Farm Bill. I know it is a really, really 

big deal to the wine and grape folks. Would you expand on it just 

a second? 

Mr. ANDERSON. Sure. The research dollars coming in especially 

on clean plant is very important to us, and I would say for the 

grape industry in the United States it is very costly to get started 

in the business and then five, eight to ten years down the road 

having a disease that wipes it out, going back to the cost of that 

production loss and the start of the grapes again, starting back in 

the field, so very important. 

The Clean Plant Network, having clean plants start out, and I 

think if you are in the fruit industry or nut industry, it is very important, too, because of the loss of time and the cost per acre. So 

this is a very important piece to us, having a clean plant, having 

nurseries with clean stock before it goes to the farmer’s fields and 

being planted out in the vineyards. 

33 

Mr. LUETKEMEYER. Thank you. 

Thank you, Mr. Chairman. 

Chairman SHULER. Mr. Thompson. 

Mr. THOMPSON. Thank you, Mr. Chairman. 

Mr. Anderson, coming back to the role of tourism with its contributions as a result of the wine and grape industry playing a vital 

role, I understand you had a bit of a decline last year with weather 

and high energy costs. Can you provide us an update on how the 

business has been this spring and into the summer? 

Mr. ANDERSON. It has been interesting this year, too. As other 

parts of the United States, Missouri has been awful wet, too, and 

we will catch a lot of rain again this year. Fuel prices have gone 

down some, but input costs, such as fertilizers and sprays still continue to stay high. 

And so with the weather conditions, we are out there spraying 

quite often, more than we would like to to keep our crop. 

In Missouri, we are about two weeks out before harvest, and we 

will continue harvest through the end of October. The challenge is, 

of course, agri-tourism wise is that it is weather related. Having 

fuel prices down and then having good weather to get people out, 

we get close to about a million people hit Missouri wineries every 

year. So activities are bringing them out to that region, and also 

trying to get the consumer confidence back to come out there and 

spend an extra day or two just so that money stays at the community, those tax dollars and that stuff stays in that community and 

recycles back. 

So it is very important to us, but again, a lot of it is weather 

based, and we are hopeful that in the next few weeks it will have 

some sunshine and we can start harvesting grapes. 

Mr. THOMPSON. I hope so, too. You have not much of a presence 

of that in my very rural district, but I wish we could replicate that 

agri-tourism with milkshakes and dairy farmers right now. That 

would be a blessing if we could figure out how to do it. I love milkshakes so I don’t see why it would not work. 

[Laughter.] 

Mr. THOMPSON. I throw this just open to all the members of the 

panel. Have any of your farms or products ever been subjected to 

a recall as a result of food-borne illnesses? Anyone? 

Mr. WILLIAMS. We have had threat of it from the standpoint that 

it is very simple for a consumer to catch wind of someone getting 

sick from a particular product, and all of a sudden you know, the 

mind plays tricks on you and you begin to think, well, maybe I am 

sick as well. 

We have had folks to call in and to indicate, well, they had some 

of our product and now they are not feeling well. Fortunately, we 

have got a system in place where we can trace back and be able 

to clear ourselves of such indications. 

The problem comes in from my perspective we can take every 

step, every measure possible to protect and provide safe food supply. Once that product ends up on the shelves on the grocery store 

or in a school system, it is easy enough for anyone to come through 

as a consumer, to pick up an item maybe not having washed their 

hands, maybe sneezed on it, a mother that has changed the diaper 

of a young child and not washing hands, and contamination can 

34 

occur. And yet that falls back so much with the liability and responsibility, falls back on the producer, and there is just that point 

of contamination that can occur in so many other areas. 

But there is always a threat looming, and you always have a little bit of an element of fear of what is going to happen in the event 

of a recall, and I do know of several folks that have and experiences they have gone through. 

Mr. THOMPSON. Just following up on that, I would be curious to 

see what the opinion of the panel is. Do you have an opinion on 

the effectiveness that USDA has had in terms of food safety and 

their oversight of that? 

Mr. HOLBROOK. I think it was mentioned earlier about the fiasco 

that happened on tomatoes last year that was falsely blamed. We 

lost a lot of money last year just on a rumor or false Salmonella 

being on tomatoes, and it really has not recovered yet. 

Mr. THOMPSON. Any others? 

Mr. ANDERSON. Congressman, for us in the wine industry, we are 

a little bit unique. We do work with USDA, but we are pretty much 

overseen by the Trade and Tax Bureau, TTB. So we have another 

agency involved that oversees us. So it is kind of interesting that 

there is FDA, there is TTB, and the USDA, and for us we have had 

a pretty good working relationship, speaking for the wine industry 

in the United States, with the Trade and Tax Bureau that oversees 

our labeling, our inspection process in the United States. 

Mr. THOMPSON. Let’s see. Just real quick because I know my 

time is going, have any of you or your members utilized the Small 

Business Administration or the USDA’s guaranteed loan program 

to expand your operations? 

And if so, what was your experience with those programs? 

Mr. WILLIAMS. I’ll speak from the banker’s side. I have worked 

for 18 years with the farm credit system, and although I never obtained a loan myself, I did do a number of loans that had FSA 

guarantees. 

The experience that I think most at that time our customer base 

went through was that burdensome application process. It did take 

some time to go through that. 

Also, the fact that every bit of property was secured or the loan 

was secured by every bit of property. I am talking real estate, 

equipment, crops, the whole nine years. That becomes very cumbersome. 

Then the process of providing annual records in support. It is a 

difficult process not only for the applicant, but also for the lender 

that is assisting in those programs as well. It does become cumbersome to the point that there is some reluctancy to want to go 

through that process, and so I would say anything that could be 

done to help simplify that would certainly be beneficial to those 

that are in need of those type programs. 

Mr. THOMPSON. Well, I thank the panel and, again, thank the 

Chairman and Ranking Member for this opportunity. 

Chairman SHULER. Thank you, Mr. Thompson. 

I am going to yield back to the Ranking Member, Mr. 

Luetkemeyer, for a follow-up question. 

Mr. LUETKEMEYER. Because the food safety situation is on our 

minds and we have got a bill in front of us, and we are very conVerDate Aug 31 2005 07:53 Dec 10, 2009 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\51036.TXT DARIEN
35 

cerned about the overreach of the bill with regard to what its impacts may be and whether we really have a problem, let me just 

ask the question this way. 

Has there been a problem in the past that this bill is going to 

solve or are we just creating more levels of bureaucracy, more intrusion into your business? Is it going to have a real effect on the 

quality of food safety? 

And it is concerning to me from the standpoint that all of you 

are going to go out of business if you have a problem. So you have 

a vested interest in making sure you have something and you do 

it right to begin with. I do not know why you need anymore oversight. 

Tell me what the problem is and if it is being addressed correctly. 

Mr. BARNWELL. We store apples for Gerber Foods for baby food. 

We already had a trace back policy in place. If something is not 

right with those apples, they do not get shipped, you know. Apples 

we have had very little problem. The only thing was a little bit of 

fresh cider a few years ago in an organic orchard. Apples have been 

very safe even though they have got some bad raps about specifically alar, which the science never do come close to supporting the 

claims that were made. 

But you know, we work very, very hard. When we packed apples 

we sold to Kroger Food Stores. Now we are dealing with Nestle 

Foods. We deal with large places, and it is just another level of regulation by and large. There is a lot of it in that that makes a lot 

of sense, but everything that is in that that we are going through 

right now getting certified, it is going to cost us about $4,000 just 

in our small operation to get certified. It is things that we are already doing. We just do not write down. That is basically the biggest thing. Testing the water, making sure your employees wash 

their hands, these are just common sense things that we do. 

Mr. LUETKEMEYER. Basically what you are saying is that you already do a lot of these things already. It is just going to be put in 

law and you will be forced to do this now. 

Mr. BARNWELL. And document that you do it. So now we have 

to have a food safety officer. 

Mr. LUETKEMEYER. And, quite frankly, that is probably why we 

have the quality of food that we have, because you have these 

things already in place. 

Mr. BARNWELL. I think that we have the safest food in the world. 

Talk like Mark was talking about. When I go in my orchard, we 

have got some plums, some peaches that are ready now. I pick 

them off the tree, wipe them off on my sleeve and eat them. 

If I go to the grocery store and buy that, I take it home and wash 

it because somebody else has handled it. I would a whole lot rather 

eat out of my orchard than out of a grocery store, and I mean I 

feel completely safe eating my food out of there. I know how we 

spray it. 

I mean, I do not take it home and wash it, and I did it to my 

three year old granddaughter the other day. If you ever saw anything any better, she was eating plums and the juice was running 

down the side of her face and she looked and said, ‘‘Kenny, I like 

plums.’’ And you know that I am not going give somebody that preVerDate Aug 31 2005 07:53 Dec 10, 2009 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\51036.TXT DARIEN
36 

cious something that is going to hurt them. I am absolutely going 

to make sure it is as close to perfect as we possibly can, and the 

vast majority of the farmers in the United States have exactly 

what. Well, all farmers, I think, have exactly that same feeling. 

A lot of times where this stuff has come through is being like the 

peanuts, was after it was into the farmer or like a lot of times in 

the meat. It is the processing plant, not what the farmer sent to 

them. 

The farmer gets a lot of bad rap, but you know, you were talking 

about being the head of the community. The perception I see in our 

county right now is the little old man and the little old lady in the 

picture with him holding the pitchfork. That is the way a farmer 

is supposed to be in western North Carolina right now. They are 

supposed to be dirt poor. They should not be able to have ever 

made any money. 

Mr. LUETKEMEYER. Thank you. 

Mr. Williams. 

Mr. WILLIAMS. Yes, sir. Thank you, Ranking Member 

Luetkemeyer. 

I would say that food safety is really market driven. From the 

standpoint of us as a shipper and repacker for smaller farmers, we 

are meeting the demands of our customer base, largely the retail 

chain stores. Just as someone might meet the demands of a local 

farmer’s market, there are going to be requirements, expectations 

of the consumer that is going to drive the market in a direction. 

I do not think that the government necessarily needs to try to do 

that and try to get involved. That will take care of itself. 

I think that where government can actually be of benefit, two 

areas. One is standardization. For instance, we have multiple 

metrics out there that may be required. One chain store may require this one. We go through a prime slabs. There are others. 

There is EuroGAP, GAP. I mean, the list goes on and on and on 

about the metrics. 

We could be required by one store to have this set and by another store to have this set. So when you get duplication, that in 

itself can create problems. So some standardization, you know, 

would be of great benefit to the industry. 

Another thing that food safety does and being able to document 

the process of which you have grown and processed fruit, it is beneficial whenever you do have scares to be able to basically show your 

innocence, that there is not a trace-back to your farm or to your 

facility, and so that can be very beneficial. 

But the biggest thing still that concerns me is the way that that 

is done in terms of recall and not being science based because that 

is just hugely devastating to an industry. We have seen it time and 

time again. We go back to in the ’80s apples with alar. We have 

seen the recent tomato deal, and we can go on and on and on and 

on, and generally speaking, whenever we have those recalls, it has 

not been very science based. 

Yes, people have gotten sick, and there have been reasons. More 

often than not, it comes imported product, not domestically grown 

product, and we just need to be very cautious in that area, and I 

think the government can help by exercising some science based 

data whenever this happens. 

37 

Mr. LUETKEMEYER. We will indulge the Chairman here for how 

long to go with this. How long do you want to allow the comments 

to continue? 

Chairman SHULER. Let’s let Mr. Hudgins response. 

Mr. LUETKEMEYER. Mr. Hudgins? Okay. Go ahead. 

Mr. HUDGINS. Thank you. 

I would like to echo some of Mr. Barnwell’s comments. As I 

speak right now, some of our California peaches are on their way 

to Gerber, and obviously, we have a very great awareness of the 

importance of food safety for product that is going into baby food 

use. 

I can also say that there has never been a single documented 

case of a food borne illness that has been attributed back to a 

canned fruit item in this country. So we look at the food safety legislation that is under consideration today and say that it certainly 

represents an improvement over where the discussion started, but 

clearly NCFC would have a concern with regard to facility fees 

which essentially would be a tax on our member producers with, 

again, very limited ability to pass along those costs in the marketplace. 

I would also echo Mr. Williams’ comment that in our world, in 

the peach industry what we have seen is a dramatic increase in the 

imported product entering this country and would hope that the 

same scrutiny and the same level of certification would go into 

verifying the safety of those products because in the end if there 

is a problem with a consumer, no one is going to read the fine print 

to say where did that product come from. It is going to be there 

was a food safety problem relative to the canned peach, and no one 

will look at where that product originated form. 

Mr. LUETKEMEYER. Very good. Thank you. 

Chairman SHULER. Thank you. I want to thank all of the witnesses for their testimony today, and I look forward to working 

with my colleagues to address any issues that may have arisen 

today. 

I ask unanimous consent that the record be open for five days 

for members to submit their statement. Hearing no objection, so ordered. 

This hearing is adjourned. 

[Whereupon, at 12:03 p.m., the Subcommittee meeting was adjourned.] 

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