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S. HRG. 115–168 

HEARING FROM THE HEARTLAND: 

PERSPECTIVES ON THE 2018 

FARM BILL FROM KANSAS 

FIELD HEARING 

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

FEBRUARY 23, 2017 

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry 

( 

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

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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

PAT ROBERTS, Kansas, Chairman 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

JOHN BOOZMAN, Arkansas 

JOHN HOEVEN, North Dakota 

JONI ERNST, Iowa 

CHARLES GRASSLEY, Iowa 

JOHN THUNE, South Dakota 

STEVE DAINES, Montana 

DAVID PERDUE, Georgia 

LUTHER STRANGE, Alabama 

DEBBIE STABENOW, Michigan 

PATRICK J. LEAHY, Vermont 

SHERROD BROWN, Ohio 

AMY KLOBUCHAR, Minnesota 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

JOE DONNELLY, Indiana 

HEIDI HEITKAMP, North Dakota 

ROBERT P. CASEY, JR., Pennsylvania 

CHRIS VAN HOLLEN, Maryland 

JOEL T. LEFTWICH, MAJORITY STAFF DIRECTOR

ANNE C. HAZLETT, MAJORITY CHIEF COUNSEL

JESSICA L. WILLIAMS, CHIEF CLERK

JOSEPH A. SHULTZ, MINORITY STAFF DIRECTOR

MARY BETH SCHULTZ, MINORITY CHIEF COUNSEL

(II) 

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(III) 

C O N T E N T S 

Page 

FIELD HEARING(S): 

Hearing from the Heartland: Perspectives on the 2018 Farm Bill from Kansas .......................................................................................................................... 1

Thursday, February 23, 2017 

STATEMENTS PRESENTED BY SENATORS 

Roberts, Hon. Pat, U.S. Senator from the State of Kansas, Chairman, Committee on Agriculture, Nutrition, and Forestry ................................................. 6 

Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan ..................... 9 

Welcome Panel 

Myers, General Richard, President, Kansas State University, Manhattan, 

KS .......................................................................................................................... 2 

Marshall, Hon. Roger, M.D., Congressman, U.S. House of Representatives, 

Washington, DC ................................................................................................... 4 

McClaskey, Hon. Jackie, Secretary, Kansas Department of Agriculture, Manhattan, KS ............................................................................................................ 5 

Panel I 

Clawson, David, The Clawson Ranch Partnership, Plains, KS ........................... 13 

Foster, Lynda, Foster Dairy, Fort Scott, KS ......................................................... 14 

France, Amy, France Family Farms, Marienthal, KS .......................................... 15 

Heinen, Lucas, Farmer, Heinen Family Farms, Everest, KS .............................. 16 

Lahey, Tom, Owner/Operator, Tom Lahey Farms, Moscow, KS .......................... 17 

Moore, Kent, Director, Kansas Corn Growers Association, Iuka, KS ................. 19 

Peirce, Cameron, Owner/Operator, Peirce Farms, Hutchinson, KS .................... 20 

Springer, Michael, Springer Family Foods, LLC, Independence, KS .................. 21 

Wood, Kenneth, Owner/Operator, Riverside Stock Farm, Inc., Manhattan, 

KS .......................................................................................................................... 24

Winter, Kent, Owner/Operator, Kent Winter Farm, Mt. Hope, KS .................... 23 

Panel II 

Hanes, Shan, President & CEO, First National Bank of Elkhart, Elkhart, 

KS .......................................................................................................................... 37

Moyer, Catherine, General Manager, Pioneer Communications, Ulysses, KS ... 38 

O’Brien, Kathleen, General Manager, Nemaha-Marshall Electric Cooperative, 

Axtell, KS .............................................................................................................. 40 

Ott, Gena, Financial Officer, Frontier Farm Credit, Emporia, KS ..................... 36 

Peine, Derek, Chairman of the Board, Renew Kansas, Oakley, KS .................... 41 

Ruehle, Greg, President & CEO, Servi-tech, Inc., Dodge City, KS ..................... 42 

Scott, Clay, Kansas Water Congress, Ulysses, KS ................................................ 44 

Tieben, Cherise, City Manager, Dodge City, KS ................................................... 45 

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IV 

APPENDIX 

PREPARED STATEMENTS: 

Clawson, David ................................................................................................. 58 

Foster, Lynda .................................................................................................... 63 

France, Amy ...................................................................................................... 70 

Hanes, Shan ...................................................................................................... 80 

Heinen, Lucas ................................................................................................... 92 

Lahey, Tom ....................................................................................................... 94 

Marshall, Hon. Roger ....................................................................................... 99 

McClaskey, Jackie ............................................................................................ 100 

Moore, Kent ....................................................................................................... 105 

Moyer, Catherine .............................................................................................. 109 

Myers, General Richard ................................................................................... 119 

O’Brien, Kathleen ............................................................................................. 122 

Ott, Gena, .......................................................................................................... 126 

Peine, Derek ...................................................................................................... 130 

Peirce, Cameron ................................................................................................ 136 

Ruehle, Greg ..................................................................................................... 139 

Scott, Clay ......................................................................................................... 144 

Springer, Michael ............................................................................................. 152 

Tieben, Cherise ................................................................................................. 167 

Winter, Kent ..................................................................................................... 168 

Wood, Kenneth .................................................................................................. 171 

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

McClaskey, Jackie: 

Addendum to Written Statement .................................................................... 178 

QUESTION(S) AND ANSWER(S): 

Clawson, David: 

Written response to questions from Hon. Pat Roberts .................................. 182 

France, Amy: 

Written response to questions from Hon. Pat Roberts .................................. 185 

Heinen, Lucas: 

Written response to questions from Hon. Pat Roberts .................................. 189 

Moore, Kent: 

Written response to questions from Hon. Pat Roberts .................................. 190 

Springer, Michael: 

Written response to questions from Hon. Pat Roberts .................................. 191 

Wood, Kenneth: 

Written response to questions from Hon. Pat Roberts .................................. 192 

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(1) 

HEARING FROM THE HEARTLAND: 

PERSPECTIVES ON THE 2018 

FARM BILL FROM KANSAS 

Thursday, February 23, 2017 

MCCAIN AUDITORIUM, 

KANSAS STATE UNIVERSITY, 

Manhattan, KS 

The Committee met, pursuant to notice, at 2:02 p.m., McCain 

Auditorium at Kansas State University, 1501 Goldstein Circle, 

Manhattan, Kansas, Hon. Pat Roberts, Chairman of the Committee, presiding. 

Present: Senators Roberts and Stabenow. 

Chairman ROBERTS. Good afternoon. I call this hearing of the 

Senate Committee on Agriculture, Nutrition, and Forestry to order. 

I am privileged to convene this Committee as Chairman here in 

Manhattan, where I spent many years of learning as a student. I 

learned about journalism and a few other things. As your Senator, 

I continue to learn about how important agriculture is to our Nation’s economy and our national security. 

Kansas State University exemplifies higher education, especially 

when it comes to preparing young people for lives in agriculture, 

from conducting fundamental practical research and extension to 

advance production to providing critical policy analysis and development to address our challenges. I am humbled and honored to 

be your Chairman and to kick off the 2018 farm bill right here, 

right now, at home. 

I am also very proud to welcome my partner, Senator and former 

Chairwoman Deborah Stabenow from Michigan, back to Kansas, 

this time to Manhattan—the first time in Wichita and now Manhattan. Together, we will blaze a trail to a new farm bill. 

Before we offer our opening remarks, we will hear from our distinguished welcoming panel. I will introduce you all and then turn 

it over to you for your individual remarks. 

First we have our host, president of Kansas State University, Retired U.S. Air Force General Richard Myers. After a decorated career where he rose to the rank of four-star general and Chairman 

of the Joint Chiefs of Staff, President Myers retired to his home 

State to serve as president of his alma mater. We are proud of him, 

and we are grateful for his leadership. 

In 1863—I would remind my dear friend and colleague—Kansas 

State University became the first fully operational land-grant college in America. Since its founding, Kansas State has continued to 

serve its students, Kansas, the Nation, and the world by providing 

high-quality education, research, and extension services. President 

Myers, thank you for hosting us today. 

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Next is Congressman and Doctor Roger Marshall, the newest 

member of the Kansas delegation in the U.S. Congress. He represents the 1st Congressional District. We obviously call it the ‘‘Big 

First.’’ Roger was recently appointed to serve on the House Agriculture Committee, and I am pleased to work with him on all the 

issues that we face. 

Prior to being elected to the House, Dr. Marshall was a practicing OB/GYN from Great Bend. Dr. Marshall also served his 

country and earned the rank of captain in the United States Army 

Reserves, where he served 7 years. Dr. Marshall earned his undergraduate degree from, you guessed it, Kansas State University and 

his medical degree from that other university next to Baker. 

[Laughter.] 

Chairman ROBERTS. The University of Kansas. Thank you for 

your testimony today, Congressman Marshall. 

I am also very proud to have Dr. Jackie McClaskey, our Kansas 

Secretary of Agriculture, join us this afternoon. Secretary 

McClaskey grew up on a diversified farm near Girard and is also 

a proud alumna of K–State. She understands Washington well as 

she was a staff member for then-Congressman Sam Brownback. 

She earned a master’s degree from Texas A&M. 

[Laughter.] 

Chairman ROBERTS. But came to her senses, returned to K–State 

for her Ph.D. in animal science, specializing in animal disease response policy. 

Thank you to our distinguished welcoming panel, President 

Myers, Dr. Marshall, Congressman Marshall, Secretary McClaskey. 

Each panelist is recognized for 3 minutes for remarks. Sorry for 

that limit, but basically we are like King Tut. We are pressed for 

time. 

[Laughter.] 

Chairman ROBERTS. President Myers. 

STATEMENT OF GENERAL RICHARD B. MYERS, PRESIDENT, 

KANSAS STATE UNIVERSITY, MANHATTAN, KANSAS 

General MYERS. I do not know where to go with that, but, Chairman Roberts, it is indeed a pleasure to welcome you on behalf of 

Kansas State University to the campus of our great university and 

your alma mater. Welcome. All Kansans value your leadership on 

this important Committee. Senator Stabenow, thank you for wearing purple. You do us proud, and we very much appreciate that. 

[Applause.] 

General MYERS. We welcome you to Kansas State University as 

well, another great land-grant institution which you are well familiar with. 

To my co-panelists up here for the introduction, Congressman 

Marshall, always good to be with you, and Secretary McClaskey. 

These are teammates as we try to make progress here in the State 

of Kansas, indeed the Nation and the world. 

What an opportunity we have today to watch Government in action. This is a serious hearing, a very serious hearing, just like if 

it were held in one of the hearing rooms on Capitol Hill. This is 

the same deal. You get to watch it right here up close and personal. 

You get to see the effort and the intelligence and energy that is put 

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into these hearings, and we just feel so privileged that you chose 

Kansas State University to hold your hearing here today. 

Everybody in this room is going to be impacted by the policy that 

comes out of these deliberations, and so everybody has an interest, 

and I am glad you are all here. 

Kansas State University, we are the land-grant institution of the 

State of Kansas, and, of course, research and extension is a big 

part of that. We provide trusted, practical education to help individuals, businesses, and communities solve problems and develop 

skills to build a better future. A couple of examples. 

As many of you know, Senator Pat Roberts and many others on 

the Kansas delegation—Federal, our local legislators, the city of 

Manhattan, in fact, the whole State—were instrumental in getting 

the National Bio and Agro Defense Facility located here in Manhattan, Kansas. It is changing a lot of things for the way we view 

the world. Just recently last month, we had the Blue Ribbon Commission on Bio Ago Defense visit Kansas State University for 2 

days. Both of these honorable folks here next to me were part of 

that as well. 

Senator Daschle led the Blue Ribbon Commission, and he passed 

on in his remarks, by the way, about how much he enjoyed working 

with you in the Senate when he was in the Senate as well from 

South Dakota. 

He said on the second day, in opening up a series of panels that 

were going to inform on bio-agro defense, he said, ‘‘From what I 

have seen the first day, Kansas State is the Silicon Valley of bioagro defense.’’ I think that is probably true in lots of ways, but particularly since we have the NBAF here, this is not something that 

Kansas State could do by ourselves. But we think we are probably 

maybe the epicenter of how we protect our food system from both 

natural-caused issues and those by terrorists. So it is an opportunity, I think, to put the importance of agriculture 

infrastructure on the front burner in Washington, DC, and that 

is why we did it. Senator Daschle has been a good friend in that 

work. 

A few other brag points from research and extension. When it 

comes to wheat breeding, they say that the world’s population is 

going to double by 2050, and how are we going to feed all these 

new mouths? Well, there are a lot of innovative practices that benefit Kansas, our Nation, and the world through cutting-edge research in areas such as genetics, disease prevention, and food security. We help agriculture—Kansas’ largest employer—be more profitable, sustainable, and efficient. 

With a name befitting its place at the summit of Kansas agriculture, the K–State-produced wheat variety called ‘‘Everest’’ just 

completed its fourth year as the top variety in the State and the 

fifth time out of the last 6 years that a K–State variety has held 

the top spot. Everest was first in the field in 2009. 

Of course, we have a lot of interest in sorghum as well. As a 

global leader in sorghum research and promotion, K–State cofounded a unique coalition with industry leaders and producers. In 

early 2016, the Kansas Grain Sorghum Commission, United Sorghum Checkoff Program, the Kansas Department of Agriculture, 

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gram. The program focuses on expanding markets for sorghum and 

increasing the average national sorghum yield from 62 bushels per 

acre to 100 bushels per acre by 2025 by funding research in such 

areas as plant breeding, genetics, and field-level management. 

Then trying to tie a lot of things we do here in Kansas between 

the urban settings and the rural settings, 5 years ago it seemed 

like a simple idea: How do we find a way for our smallholder farmers in Kansas to sell the food they grow to more people? So K–State 

Research and Extension helps do this and helps farmers become 

more efficient, more profitable, and more self-sustaining. We also 

assist consumers and communities in developing their local food 

system, which adds a lot of vitality, of course, to the community. 

This food hub is a producer cooperative that goes beyond just the 

farmers markets and finds ways to get their produce to the larger 

buyers, such as restaurants, hospitals, schools, and food companies. 

It has been a very successful program to date. 

So, in closing, I could not be prouder that both you Senators are 

here holding this hearing with these number of constituents that 

are out there that will be very interested in everything we talk 

about today, and we are just as proud as we can be as Kansas 

State University to be hosting you. Thank you so much. 

[The prepared statement of General Myers can be found on page 

119 in the appendix.] 

Chairman ROBERTS. Mr. President, thank you very much. 

Congressman Marshall. 

STATEMENT OF THE HON. ROGER MARSHALL, M.D., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KANSAS 

Dr. MARSHALL. Chairman Roberts and Ranking Member Stabenow, let me also be among the first to welcome you to the Big First 

Congressional District of Kansas, our Nation’s largest ag-producing 

district. 

You are now in the leading State for wheat and sorghum production, the largest district for beef sales, and home of the fastest 

growing dairy herd in the country. This is a fitting place to launch 

a review of our current farm programs and discuss solutions for the 

upcoming 2018 bill. 

You are also at ground zero for the challenges facing America’s 

farmers and ranchers. The hurt in farm country is real. I am confident that today you will hear from folks in the trenches of this 

current economic downturn. I am looking forward to hearing their 

ideas and solutions to take back to Washington. 

For me, the downturn in the ag economy we all hear about becomes very real when I see the Kansas Farm Management Association reporting that net farm income in Kansas was less than $6,000 

in 2015. I cannot imagine trying to raise a family on that income 

level. We know that these levels will fall in 2016, and unless something drastically different happens, they are going to fall even 

lower in 2017. 

Today’s hearing is focused on the 2018 farm bill, but I want to 

instill this: We cannot make farm policy in a vacuum. Monetary 

policy, trade policy, regulatory and economic policy all impact our 

producers’ bottom lines just as much as the programs we will be 

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tural trade agenda would work hand-in-hand with our safety net 

programs to provide revenue from the marketplace and opportunity 

for our producers to succeed. 

I do not have all the answers on any of this current crisis, but 

I am committed to working with my colleagues across the aisle, 

down the aisle, and across the Capitol as we begin to write this 

2018 farm bill. It is my hope that we can identify the areas where 

the 2014 bill fell short, correct them, and ensure we have farm, 

food, and nutrition policy that works for our farmers, ranchers, and 

consumers. 

I am honored to be here. I am honored to represent Kansas State 

University in the Big First District of Kansas. Thank you for having me. 

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

99 in the appendix.] 

Chairman ROBERTS. Roger, thank you very much. 

Secretary McClaskey. 

STATEMENT OF THE HON. JACKIE MCCLASKEY, SECRETARY, 

KANSAS DEPARTMENT OF AGRICULTURE, MANHATTAN, 

KANSAS 

Ms. MCCLASKEY. On behalf of the State of Kansas, Governor 

Sam Brownback, and the entire agricultural industry, it is also my 

honor to welcome you both here today—Chairman Roberts, to welcome you home, and, Senator Stabenow, to welcome you back. We 

are very pleased to have you here. 

Obviously, agriculture is important to Kansas. It is our State’s 

largest industry. Forty-three percent of our economy is dependent 

upon agriculture. It contributes nearly $65 billion to our State 

economy. We export nearly $5 billion in agricultural exports. When 

we think about the future of agricultural policy, we know how critical that is not just to agriculture but to our entire State economy. 

So we very much appreciate the opportunity to be here with you 

today and join with you. 

When we think about that agricultural economy in our State, it 

is dependent on the farmers and the ranchers that you are going 

to meet today. You are going to meet some of the State’s best and 

brightest agricultural leaders, and they are going to share with you 

their concerns. I will tell you that, without question, our economy 

is not where—it does not have the potential it is—agriculture is not 

as important to us without those individuals. They embody the 

same pioneer spirit of their forefathers. They show the values of 

family and faith and hard work and persistence and entrepreneurship and community and achievement every day in what they do. 

Because of those people and because of what they do, it is really 

interesting to me as I travel the State, and I was just thinking, as 

I sit here, in the last 48 hours I have been from Ulysses to Kansas 

City, Kansas, and then back here to Manhattan, and had the 

chance to see a lot of agricultural leaders. While, yes, everybody is 

concerned about commodity prices in a depressed farm economy, at 

the same time what I see is a positive attitude, an outlook to the 

future, a desire to grow and think about how we can do things better. It is because of those pioneer spirit values that they have that 

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Kansas farmers and ranchers are able to continue to look forward 

and look to the future. 

But we hear the same challenges that I am sure you are going 

to hear about today. They are looking for a stable and a predictable 

safety net. They are looking for policy that is going to allow us to 

have a reliable workforce to serve the agricultural industry. They 

want to make sure that there are conservation policies out there 

that allow us to balance the needs of natural resources and economics. They want to make sure that regulations are based off 

sound science, common sense, and a good business mind-set. Like 

I am sure you are going to hear over and over today, we need access to more and more international markets so that we have a 

place to move our product. 

I sit here very confident that under your leadership, especially 

when you two talk about working together, that we can meet those 

challenges and we can do it together, whether that is State and 

Federal or the industries all working together. If you think about 

all the entities represented in this room, I am pretty sure there is 

nothing that we cannot accomplish. 

It is National FFA Week, so I will do my shout out to FFA and 

know that I am not the only person, that you all share this, that 

I believe in the future of agriculture, and I know this room does, 

and I believe that we can reach solutions together. 

Thank you for giving us the opportunity to be here. 

[The prepared statement of Ms. McClaskey can be found on page 

100 in the appendix.] 

Chairman ROBERTS. Madam Secretary, thank you very much. 

Congressman, thank you so much. 

General Myers, President Myers, take care of your new knee, 

and do not do stupid things. 

[Laughter.] 

General MYERS. Yes, sir. 

Chairman ROBERTS. I ask that our first panel of witnesses now 

take their seats. Senator Stabenow and I will then give our opening 

remarks. Thank you all. Would the first panel please come and 

take your seats? 

[Applause.] 

STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE 

STATE OF KANSAS, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

Chairman ROBERTS. Thank you very much to all of you for coming, and we look forward to your testimony. 

Senator Stabenow, ladies and gentlemen on the panel, others 

here in McCain Auditorium, where as a freshman member of a social fraternity, Pi Kappa Alpha, I used to sit right up there in those 

seats because every assembly was required. I will not tell you what 

we did up there, but then that is beside the point. 

Welcome to the Senate Committee on Agriculture, Nutrition, and 

Forestry’s first hearing on the 2018 farm bill. We start the journey 

to a successful and timely 2018 farm bill in the heartland because 

that is where it matters most. On our farms and ranches, businesses, and city and county halls all across the countryside, products, agribusiness, and our rural communities are the ones who 

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sign up for the programs, comply with the regulations, and feel the 

burden firsthand of overburdensome or unsupported policies. 

So it is only right that we start this conversation here with you. 

No one understands the impacts of farm bills or policies set in 

Washington like America’s farmers and ranchers in rural communities. Your experience, your story is what we need to hear before 

we start writing a new farm bill. What a success story you have 

to tell. America’s producers, the folks that Paul Harvey spoke about 

in his famed ‘‘So God Made a Farmer’’ speech, have overcome 

drought, disease, floods, tornadoes, embargoes, and even their own 

Government to produce the safest, most abundant, and affordable 

food and fiber supply the world has ever seen or known. 

Your fight and perseverance yields results. According to the most 

recent census of agriculture, your hard work resulted in over $394 

billion worth of ag products sold. In Kansas, that value is over $18 

billion. More specifically to the Sunflower State, Kansas planted 

23.2 million acres to crops in 2016. Livestock in Kansas includes 

6.25 million cattle, 1.9 million hogs, and over 140,000 dairy cows. 

Those folks are growing pretty quick. 

Our agriculture industry throughout the value chain must grow. 

Technology must advance to better service this growth. Critical to 

that growth is stability and an adequate safety net. That is why 

we need a good farm bill. 

This farm bill journey will not be like the last one. The agriculture sector enjoyed high prices during the last debate. Now we 

face multiple years of low prices across the board. I am working to 

make Washington understand the differences between the economic conditions then and what you all are facing now. You all understand it. Washington needs to as well. Senator Stabenow understands it as well. 

To those who say passing a farm bill in this environment is a 

daunting task, I say together we can get it done. We have done 

that. We can get it done again. We must embrace the attitude of 

our producers’ optimism and ingenuity. A farmer does not plant the 

seed without the faith and optimism of harvesting a good crop. 

But passing a new farm bill will not be easy. That is why with 

your help in crafting a bill that meets the needs of producers across 

all regions and all crops is absolutely necessary. Note that I said 

all regions and all crops. All of agriculture is struggling, not just 

one or two commodities. We must write a bill that works across our 

entire Nation. 

At the same time our Government is spending money it does not 

have, our national debt exceeds $19 trillion, agriculture, and specifically the farm bill, has consistently answered to that call to do 

more with less. The last farm bill voluntarily cut spending. The 

previous crop insurance contract with the Department of Agriculture was cut $6 billion from the program. I could go on and on, 

on where ag gave at the store. Farmers and ranchers pulled themselves up from their bootstraps. They understand fiscal responsibility. Therefore, we must be judicious with the scarce resources 

that we have. We must ensure programs accomplish their fundamental purpose. We must ask relevant questions and reexamine 

programs to determine their effectiveness. 

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Are our conservation programs keeping farmland in operation or 

are they merely used to comply with overburdensome regulations? 

Are rural development programs helping to increase economic opportunities in farm country, or are they being used to build out infrastructure in urban areas? 

Now is the time to examine the core mission of USDA programs 

to ensure they are operating as intended, and if they are not, then 

we must refocus them. We need bold thinking and new ideas to address today’s challenges during tough economic times. 

Let us not forget—it has been said before by our president, the 

president of Kansas State—that in a few short decades the global 

population will top 9 billion people, agricultural production will 

need to double—double—in the near future to meet demand. Accomplishing this task requires efficiency not just on the farm and 

ranch but also in our Government. Feeding an increasing global 

population is not simply an agriculture challenge. It is a national 

security challenge. Show me a country that cannot feed itself, and 

I will show you a nation in chaos. Look around the world. 

This means we need to grow more and raise more with fewer resources. That will take research, new technology, lines of credit, 

proper risk management. It takes the Government providing an 

adequate safety net and then getting out of the producers’ way and 

then, of course, a robust and aggressive and transparent trade policy, quickly—quickly. I know the President wants strong bilateral 

trade agreements. It is time. It is time. We need to get our Secretary of Agriculture on board. 

Madam Senator—I do not think I have ever called you that before. 

[Laughter.] 

Chairman ROBERTS. To my colleague, but we need to get Sonny 

Perdue on board. We need a new Secretary. We need the Under 

Secretaries; they do the work. We need to implement a robust 

trade policy just as soon as possible. 

So that is why we are here today, to hear from the entire value 

chain of agriculture on what is working, what is not, and how we 

can improve. Thank you to our witnesses for taking time to provide 

your advice and counsel and perspective. Thank you to those in the 

audience for being here as well. 

Now, for those who want to provide advice and counsel on the 

farm bill, we have set up an email address on the Senate Ag Committee’s website to collect your input into the farm bill discussion. 

Please go to Ag.senate.gov. That is pretty simple, Ag—even I can 

get that—Ag.senate.gov, click on the farm bill hearing box on the 

left side of your screen. You can send us your own input for the 

Committee to consider as we write the next farm bill. That link 

will be open for 5 business days following today’s hearing. We want 

to hear from you. We want to hear your advice, your counsel, and 

your suggestions. 

I now recognize the distinguished Senator from Michigan, Senator Stabenow, for her opening remarks. 

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

FROM THE STATE OF MICHIGAN 

Senator STABENOW. Well, thank you, Mr. Chairman, and good 

afternoon. It is really wonderful to be back with all of you in the 

great Sunflower State and to have the opportunity to hear from all 

of our distinguished witnesses today. I appreciate very much Kansas State University hosting us, and I thank President Myers for 

his welcome, and Secretary Jackie McClaskey. I have to say that— 

Mr. Chairman, I have to clarify one thing, because Kansas State 

is the first land-grant university only because your State legislature beat us. We are actually the oldest—Michigan State University, Michigan Agricultural College was the oldest land-grant university, but after the law passed, you beat us to the punch. So we 

will share that. We are the oldest; you are the first official. 

[Laughter.] 

Senator STABENOW. I just have to get that straight in case any 

of my Spartans are watching here. 

Chairman ROBERTS. I am just happy to be anywhere where I am 

not the oldest. 

[Laughter.] 

Senator STABENOW. So needless to say, we have a terrific tradition together of land-grant universities as well as agriculture production. I also want to thank Congressman Roger Marshall. 

In the coming weeks, I really look forward to hosting you as well, 

Mr. Chairman, at the oldest land-grant university, Michigan State 

University, for our second field hearing. We did this before when 

we wrote the last farm bill together, and I am very proud of the 

work that was done in a bipartisan way, and that is what we can 

do when we work together. We had the opportunity to be in Kansas 

and in Michigan, and so I am looking forward to having that happen again. 

Now, I do have to say, because we both like our sports teams, 

that I saw that the Wildcats had an impressive finish in the football season this year, winning your Bowl Game against Texas 

A&M. Unfortunately, Michigan State did not do so well in football 

this year. I was hoping we would be in a better spot going into 

March Madness, but I think both the Wildcats and Spartans are 

just hoping maybe to get in there, right? It has been a tough year 

for both of us. But hope springs eternal, and I am looking forward 

to betting you in the future when our two teams face each other. 

I really do want to start the hearing, though, by thanking Chairman Roberts for his years of leadership on issues important to 

American agriculture. We do have a great working relationship. We 

have had some very, very difficult issues to work through together, 

and despite some great odds, we have gotten a lot done. He is one 

of the hardest-working Members of the Congress, and I think it is 

because he reminds me all the time that he is a Marine. Let me 

tell you, nothing says honor, courage, and commitment like battling 

more than 70 amendments together to get the bipartisan farm bill 

through on the Senate floor the last time around. 

Kansas has a noteworthy history of Senators creating great legislative partnerships to advance and support American agriculture 

and food policy. Many of you may know the name Senator Arthur 

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10 

Capper as the author of the Capper-Volstead Act of 1922—I was 

not there, but Pat was telling me about it. 

[Laughter.] 

Senator STABENOW. Which authorized the creation of agriculture 

cooperatives, and we all know about the wonderful partnership of 

Senator Bob Dole and Senator George McGovern and their important work together to fight hunger. 

So I am looking forward to continuing the legacy of partnerships 

with a great Senator from Kansas as we work together on the 2018 

farm bill. 

Looking back at the last farm bill, many people thought we 

would not get it done. The process was long. It was unconventional. 

We had to actually pass it twice in the Senate. We had a very 

tough budget situation and had to make hard choices. But we 

never lost sight of the fact that 16 million people—16 million people—have a job in our country because of agriculture and the food 

industry. So it has been our priority, and will continue to be, to 

support farmers and ranchers, to ensure consumers have access to 

affordable, nutritious food, and that we advocate for small towns 

and rural communities in our States and all across the United 

States. 

Despite all the challenges we faced, we accomplished a lot: reforming the commodity programs and supporting new risk management tools; providing permanent funding for three livestock disaster assistance programs, which I believe were accessed first after 

we passed the farm bill because of the droughts and the weather; 

creating new opportunities for voluntary conservation; streamlining 

nearly 100 different programs, either cutting or consolidating them. 

These historic reforms saved billions and protected the integrity of 

critical safety net programs like crop insurance. 

I am also proud of the work that Senator Roberts and I did together to create new partnerships on funding research, which I 

know is critical both here in Kansas and Michigan, and all across 

the country, including the creation of the Foundation for Food and 

Agriculture Research as a permanent agriculture research asset for 

us. 

So looking ahead to the next farm bill, we know that the farm 

economy, as the Chairman has said, is not where we want it to be. 

Low prices have pinched margins, made it tough for many producers to make ends meet. It is a tough time. We have heard from 

many producers that we need particularly to take a look at dairy 

issues and cotton issues, and we look forward to other issues that 

you raise with us today. 

I think our Senate Agriculture Committee members agree that 

we need to focus on the needs of farmers and rural communities 

in the next farm bill and not arbitrary cuts. We, in fact, created 

savings in the last farm bill. We were the only ones that offered 

up savings, $23 billion in cuts, in our own areas on the Committee. 

Now I think it is important that we address the needs that farmers 

and ranchers and others have. 

Furthermore, the Congressional Budget Office recently estimated 

that the current farm bill that we wrote is projected to save about 

$80 billion more than initially expected, largely driven by reduced 

spending in nutrition as people have found jobs and no longer need 

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11 

help, which is the way it is supposed to work. The safety net for 

families is working. Now we need to make sure the safety net for 

farmers is working as well as it needs to work. 

But savings from the current farm bill unfortunately are not allowed under budget rules to be used to address the other needs 

that we have, and so we will have challenges. We have a budgetary 

challenge facing funding 37 different key programs that do not 

have what we call ‘‘budget baseline’’ going forward, including beginning farmers and ranchers and veterans programs, food access, 

rural development, and the emerging bio-based economy. 

The good news is that just last week more than 500 groups from 

every part of the farm and food sector came together to reject calls 

for additional cuts to farm bill programs, including crop insurance, 

nutrition, and conservation. We know the farm bill is doing more 

than its fair share to reduce the deficit, and further cuts would be 

made at the detriment of farmers and families. 

In this new Congress, we face a political climate unlike any 

other, and if there is anyone who can come together and pass a 

comprehensive bipartisan bill, I believe it is our Senate Agriculture 

Committee. I like to think our Committee is unique, and we certainly are going to work hard to get this done. 

Our interests are rooted in bipartisanship because we share the 

goals of supporting our Nation’s farmers and ranchers who produce 

the safest, most abundant, and most affordable food supply in the 

world. 

Writing a farm bill is no simple task. We certainly cannot do it 

alone, and that is why we are here. This is the first of many hearings we will conduct to get input, and I cannot stress enough how 

important your input is to all of us. 

So today I look forward to learning about your priorities, what 

is working, what we should focus on to improve, and what is the 

best way to make those improvements. I am looking forward to 

your thoughts and ideas that we can take back as we get to work 

on the farm bill. 

Thank you, Mr. Chairman. 

Chairman ROBERTS. I thank my colleague, and thanks so much 

for coming to Kansas State and helping us kick off the first farm 

bill hearing. 

The folks on this panel are leaders in the Kansas agriculture sector. These individuals have devoted tremendous time and dedication to their industries over the years. We are interested to hear 

your perspectives as we embark on the development of the 2018 

farm bill. First let us start with brief introductions of each of the 

witnesses. 

Mr. David Clawson of the Kansas Livestock Association, owner/ 

operator, the Clawson Ranch Partnership, Plains, Kansas. Mr. 

Clawson joins us today from Plains. He is the president of the Kansas Livestock Association. He is the owner of several agriculture 

businesses, including a cow-calf operation, a dairy operation, a row 

crop farm, and he is a partner in the Plains State Bank. Mr. Clawson is a graduate of Kansas State University. David, thank you for 

joining us today. 

Second, Mrs. Lynda Foster is here today on behalf of the Dairy 

Farmers of America. She and her husband own and operate Foster 

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Dairy in Fort Scott. After earning her degree in dairy production 

right here at Kansas State University, she and her husband became third-generation dairy farmers, and they currently milk 170 

cows, raise corn, soybeans, alfalfa, and grass hay. Her son and 

daughter-in-law have also joined the operation. Welcome, Mrs. Foster. 

Mrs. Amy France is here today from Marienthal and is representing the Kansas Farm Bureau. Amy was raised off the farm 

by parents who were public educators and found her passion for agriculture later in life. She began the first 10 years of her career in 

a small-town lending institution at the First National Bank of 

Scott City. Amy now works alongside her husband, Clint, on their 

crop and livestock operation in western Kansas. Thank you, Mrs. 

France. 

Mr. Lucas Heinen joins us today from Everest. He is the district 

1 director and president of the Kansas Soybean Association Board 

of Directors. He and his wife, Kendra, farm in Brown County and 

work with his parents, Harold and Ruby Heinen. They have a soybean, corn, wheat, and cattle farm. Lucas has been a full-time 

farmer for 15 years. He graduated from Kansas State in 2000 with 

a degree in agronomy and worked as a crop consultant. Welcome 

to the panel. 

Mr. Tom Lahey is here with us today on behalf of the Kansas 

Cotton Association. Yes, we grow cotton in Kansas. I keep reminding my colleagues from the South, when Stephen Foster wrote that 

old song, ‘‘those old cotton fields at home,’’ he was writing about 

Kansas. He is a fourth-generation farmer and rancher from Moscow. Tom served in the army during the Vietnam War. Thank you, 

sir, for your service. Tom has spent more than 40 years farming 

and ranching in southwest Kansas. He raises cotton, wheat, corn, 

milo, and has a cow-calf operation. Welcome to the panel. 

Kent Moore with the Kansas Corn Growers is from Iuka. He is 

a fifth-generation family farmer in northwest Pratt County. Mr. 

Moore raises irrigated and dryland corn, irrigated soybeans, and 

dryland wheat. He received his bachelor’s degree from Kansas 

State University in agriculture economics. Thank you for joining us 

today, Mr. Moore. 

Mr. Cameron Peirce from Peirce Farms in Hutchinson, Kansas, 

is a sunflower, wheat, canola, and soybean grower from a fifth-generation family farm in Hutchinson and Reno County. He currently 

serves as the vice-chairman of the Kansas Sunflower Commission. 

Thank you for being here today. 

Mr. Michael Springer is a third-generation pork producer from 

Independence. He is the past chairman of the Kansas Pork Association. He, along with his wife, Christie, their two young sons, and 

other members of the Springer family run a family business that 

includes a farrow-to-finish swine operation, in addition to growing 

wheat and corn and soybeans. The Springer family employs 32 individuals, and they market 85,000 pigs annually. Mr. Springer is 

also a graduate of Kansas State University. Thank you for your 

testimony today, sir. 

Mr. Kent Winter, of Kent Winter Farms, Mt. Hope, Kansas, with 

the Kansas Sorghum Producers, fifth-generation farmer from 

Andale. Kent’s family farm operation is primarily dryland and promw42035 on AGRINON012 with DISTILLER

13 

duces sorghum, wheat, soybeans, corn, and alfalfa. Kent holds a 

bachelor’s and master’s degree in agronomy from Kansas State 

University. Thank you for being here, Mr. Winter. 

Mr. Kenneth Wood, Riverside Stock Farm, Incorporated, Manhattan, Kansas. Ken, of Dickinson County, joins us on behalf of the 

Kansas Association of Wheat Growers. He is the owner/operator of 

Riverside Stock Farm, Incorporated, near Chapman, a cash grain 

farm on which he grows wheat, corn, soybeans, and milo. He is a 

graduate also of Kansas State University. Welcome to the panel, 

Kenneth Wood. 

We will now begin the testimonies. I ask each of the witnesses 

to try to keep their statements to 3 minutes. I know that is tough, 

especially after you have listened to us speak and the distinguished 

panel before us. But we are going to try to keep statements to 3 

minutes. Your full written statements will be printed in the official 

record and are publicly available online. 

Mr. Clawson, you may begin. 

STATEMENT OF DAVID CLAWSON, THE CLAWSON RANCH 

PARTNERSHIP, ENGLEWOOD, KANSAS, AND PRESIDENT, 

KANSAS LIVESTOCK ASSOCIATION 

Mr. CLAWSON. Thank you. Mr. Chairman, Senator Stabenow, 

thank you for having me. Thank you for the nice introduction. I am 

president of the Kansas Livestock Association, and it is a true 

honor and privilege to be here to speak with you today. 

Development of the next farm bill is an important process for 

livestock producers. Whether directly or indirectly, provisions included in the farm bill can have a dramatic impact on the livestock 

sector. We oppose agriculture policies that pit one industry group 

against another, that distort market signals, and inadvertently 

cause economic harm to the livestock sector. 

KLA opposes a Livestock Title in the next farm bill. We think 

provisions with industry-wide support can easily be put into the 

Miscellaneous Title. 

KLA members oppose the involvement of the Federal Government in determining how cattle are marketed. The beef industry 

continues to transition toward more value-based marketing different types of methods. These systems allow cattle producers to 

capture more of the value of the cattle they produce. 

Many KLA members see significant benefits in value-based marketing programs. They have made it clear through KLA policy that 

the appropriate role of our organization is to protect each member’s 

ability to market their cattle in the manner that best fits their 

businesses. 

With that in mind, KLA reiterates its opposition to the Grain Inspection, Packers and Stockyards Administration’s interim final 

rule on competitive injury. The rule has been opposed by the vast 

majority of cattle producers since it was first introduced in 2010. 

Not only did GIPSA ignore the written testimony of thousands of 

cattlemen, they also chose to ignore eight separate Federal appellate courts. Finally, they chose to ignore the intent of language included by Congress in the 2008 farm bill. 

Our analysis of the interim final rule leads us to believe that 

packers will offer just one price for all cattle, regardless of quality, 

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if the rule is implemented. Packers have indicated they will not accept additional legal risk that the change in the competitive injury 

standard would create. 

As the 2018 farm bill is developed, KLA asks you to delete the 

language which led to the GIPSA interim final rule. We also ask 

for your assistance in convincing GIPSA to withdraw this rule immediately. 

We look forward to working with you on this upcoming farm bill, 

and thank you. 

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

58 in the appendix.] 

Chairman ROBERTS. With 3 seconds to spare. David, thank you 

so much. 

Lynda Foster, Foster Dairy, Fort Scott, Kansas. Lynda. 

STATEMENT OF LYNDA FOSTER, OWNER/OPERATOR, FOSTER 

DAIRY, FORT SCOTT, KANSAS, ON BEHALF OF THE NATIONAL MILK PRODUCERS FEDERATION AND DAIRY FARMERS OF AMERICA 

Ms. FOSTER. Thank you, Mr. Chairman and Ranking Member 

Stabenow. My name is Lynda Foster, and I own and operate Foster 

Dairy in Fort Scott, Kansas with my husband and son. We milk 

170 cows, and we farm approximately 750 acres of corn, soybeans, 

alfalfa, and grass hay. I am pleased today to be here to offer testimony on behalf of Dairy Farmers of America and also the National 

Milk Producers Federation. 

The last farm bill established a new Title I program for dairy 

called the ‘‘Margin Protection Program,’’ or MPP. The final version 

of the program, which was originally designed by National Milk, 

cut the MPP benefit by 10 percent, rendering the program ineffective. That program is not working as we know it today. 

The changes that Congress made to the original MPP diluted the 

real cost that farmers like myself face every day and diluted the 

effectiveness of that program. The most important change needed 

in the MPP is the return of that 10-percent cut. Other MPP adjustments include, but are not limited to, the feed formula calculation 

as it relates to milk and feed prices. This is the right program. We 

do not need another program. What we need is to have the original 

cut put back in, and with a few tweaks, I really think dairy farmers will participate at even a greater participation. 

Additionally, dairy farmers want the opportunity to use—like 

their commodity producers, we want the opportunity to use both 

the RMA, or the risk management agency, programs and Title I 

programs without any restrictions. Give me the same opportunity 

to protect my dairy as my friends have to protect their crops. 

A few other of the priority issues that the dairy industry is concerned about is, of course, farm labor, and I urge Congress to act 

immediately to address those needs for a stable and legal workforce. On our dairy farm, we chose to use robotic milkers and 

transitioned last September so that our labor problems are more 

solved because cows milk themselves now. 

The trade issue is also critical. Dairy farmers export almost 15 

percent of their products, so we are really dependent upon trade. 

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In child nutrition, I appreciate the Committee’s bipartisan work 

on the issue of child nutrition. The dairy industry remains eager 

to help work with you to pass options for school kids. Kids are used 

to drinking what they drink at home. Research shows that they are 

not drinking skim milk and 1 percent flavored. They are drinking 

2 percent or whole milk. 

So I thank you for this opportunity to present to you what the 

dairy industry feels. I love the dairy industry. I am passionate 

about working on the farm, and I want to be able to pass this on 

to my son and my grandkids. Thank you. 

[The prepared statement of Ms. Foster can be found on page 63 

in the appendix.] 

Chairman ROBERTS. Lynda, thank you so much for your pertinent testimony. I do not like blue milk either. 

[Laughter.] 

Chairman ROBERTS. Mrs. Amy France, France Family Farms, of 

Marienthal, Kansas. Amy? 

STATEMENT OF AMY FRANCE, OWNER/OPERATOR/PARTNER, 

FRANCE FAMILY FARMS, MARIENTHAL, KANSAS, ON BEHALF 

OF THE KANSAS FARM BUREAU 

Ms. FRANCE. Thank you, Chairman Roberts, Ranking Member 

Stabenow. I am honored to represent Farm Bureau’s Young Farmers and Ranchers Committee, along with my friends and family in 

western Kansas. Marienthal is where my husband, Clint, and I are 

blessed to raise our family of five, bringing them up knowing what 

hard work is all about and what it can accomplish. We want them 

to understand that it is a privilege as well as a responsibility to 

work our land and to feed our Nation. 

We raise wheat, grain, sorghum, corn, soybeans, along with grazing our cattle on pasturelands. Our ultimate goal is to leave our 

operation better than we found it and to be able to pass it on to 

the next generation. The EQIP program has been something that 

is helping us do just that. Through that program we will soon be 

rebuilding 35-year-old terraces to help hold in moisture and improve soil quality, as well as drilling a water well for our cattle. 

Without the assistance, our farm would not be able to afford making such critical improvements during these tough economic times. 

In lending, we are required to carry an appropriate level of crop 

insurance coverage. However, with the decline in our APH, that is 

becoming harder to do. When drought takes its tool, claims are 

made, APHs are lowered, insurance revenue guarantees decrease, 

and rates go up. Paying premiums is inevitable. But how can we 

increase our underlying coverage in order to stay in the system? Although as it sits crop insurance is not perfect, it has been shown 

to be the most timely and effective way to get money back to the 

farmers, unlike ARC and PLC, which can take up to 14 months 

after harvest. 

Right now, cash wheat is $1.05 under the board price at our local 

elevator. We also must have a workable Commodity Title safety 

net. Unfortunately, in regards to USDA programs, I have heard 

‘‘complex,’’ ‘‘confusing,’’ ‘‘burdensome,’’ and those are just a few 

words I can say in front of my children. 

[Laughter.] 

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Ms. FRANCE. Although they are intended to help the farmer, it 

is obvious the individuals writing and implementing these programs have little hands-in-the-dirt experience. One might even 

argue that these programs have caused additional risks on our operations. 

One step further is regulations. We must act on EPA regulations 

with Congress, and if we do not, then we will have to sell our spray 

rigs and depend on professional applicators to do the work for us, 

and they are overbooked. We need Congress and EPA to let private 

pesticide application continue. 

Senators, we thank you for spending your time with us and coming and hearing directly from us. Although some rules and proposals may sound good sitting behind a computer screen on Independence Avenue, they have real effect on me, my husband, our operation, and ultimately whether we can put food on the table tonight and in the next years. 

Thank you. 

[The prepared statement of Ms. France can be found on page 70 

in the appendix.] 

Chairman ROBERTS. Amy, thank you so much for some very pertinent testimony. Five children, right? 

Ms. FRANCE. Yes, sir. Three of my very own; two I am blessed 

to call mine. 

Chairman ROBERTS. I see. I did not mean to get into that. 

[Laughter.] 

Ms. FRANCE. I was not sure how to address it. I hope that is 

okay. 

Chairman ROBERTS. We both were sort of wondering about that. 

Thought you got married at 11 or something. 

[Laughter.] 

Ms. FRANCE. No. 

Chairman ROBERTS. Okay. I will straighten up. Sorry. 

Mr. Lucas Heinen, please present us with your testimony, sir. 

STATEMENT OF LUCAS HEINEN, FARMER, HEINEN FAMILY 

FARMS, EVEREST, KANSAS, AND PRESIDENT, KANSAS SOYBEAN ASSOCIATION 

Mr. HEINEN. Good afternoon, Chairman Roberts, Ranking Member Stabenow, and member of the panel and members of the audience. I am Lucas Heinen, a soybean farmer from Everest, Kansas, 

and I am president of the Kansas Soybean Association. We appreciate the opportunity to appear at this first hearing of your Committee on the 2018 farm bill. 

I understand that the conventional view in Washington is that 

the cost of farm programs and other parts of the farm bill will need 

to be reduced again, just as they were in 2014. But this is not acceptable to producers in Kansas. Farm prices are down over 40 percent since 2013, and U.S. farm income is expected to fall for the 

fourth straight year, by 8.7 percent, in 2017. 

Five hundred and two organizations that depend on the farm 

bill, including the Kansas Soybean Association and the American 

Soybean Association, have just sent a letter to the Congressional 

Budget and Appropriations Committees opposing further spending 

cuts in the 2018 farm bill. The letter points out that agriculture 

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voluntarily accepted the $23 billion in cuts in 2014 which you mentioned, and that other sectors have made no contribution to deficit 

reduction whatsoever. 

As Congress looks forward to writing the 2018 farm bill, we believe the sharp and continuing fall of farm prices and income since 

2013 justifies an increase in funding to strengthen the farm safety 

net and to make other worthwhile investments. Soybean producers 

have identified the following priorities: 

First, the crop insurance program needs to be protected. For 

many soybean producers, crop insurance is their most important 

risk management tool. 

Second, most Kansas producers signed up for the county ARC 

program and want to see it continued in the next farm bill. We do 

need to change the yields used under the program from NASS data 

to RMA data, when available, to minimize county-to-county discrepancies. 

Third, we support full funding of current conservation programs, 

including EQIP and the Conservation Stewardship Program, increasing funding for agricultural research under the AFRI, and authorization and funding for programs that promote biodiesel and 

bio-based products. 

Finally, we strongly support doubling mandatory funding for the 

Foreign Market Development Program and the Market Access Program to promote U.S. agricultural exports. 

In closing, Mr. Chairman, I would note the importance of keeping 

programs that support farmers and programs that support consumers together in the next farm bill. There is a relationship between the need to provide assistance to those who produce food and 

those who consume it, when either needs assistance, which explains how Congress has been able to enact farm bills for over 40 

years. 

Thank you again, Mr. Chairman, for the opportunity to appear 

today. 

[The prepared statement of Mr. Heinen can be found on page 92 

in the appendix.] 

Chairman ROBERTS. Well, thank you, Lucas. 

Tom Lahey is with us today from Lahey Farms in Moscow, Kansas. Tom? 

STATEMENT OF TOM LAHEY, OWNER/OPERATOR, TOM LAHEY 

FARM, MOSCOW, KANSAS, AND VICE PRESIDENT, KANSAS 

COTTON ASSOCIATION 

Mr. LAHEY. Chairman Roberts and Ranking Member Stabenow, 

thank you for this opportunity to provide testimony on the farm bill 

and policy needs of the cotton industry. 

I am a fourth-generation farmer and rancher from Moscow, Kansas, and raise cotton, wheat, corn, and grain sorghum, and have a 

cow-calf operation. Shortly after the passage of the 2014 farm bill, 

cotton prices began a steep decline, the result of a build-up of global cotton stocks, decreased demand, and reduced exports. Since 75 

percent of our cotton is exported, international markets heavily influence the financial condition of the U.S. cotton industry. 

While U.S. cotton acres are expected to recover, a major concern 

still exists since cotton is not eligible for the price and revenue polimw42035 on AGRINON012 with DISTILLER

18 

cies like other crops. While ARC and PLC policies have generally 

performed well for me in responding to the market downturn that 

we are experiencing in crops like wheat, corn, and grain sorghum, 

I continue to be largely exposed to the full market impact on cotton 

since it was excluded from these programs. The National Cotton 

Council has been working to get cottonseed designated as a covered 

commodity and eligible for the ARC and PLC programs. We strongly believe this policy is needed to provide a bridge until the new 

farm bill is enacted. 

We urge the Committee to seek any opportunities to increase the 

Federal funding and farm policies that ensure consumers have the 

safest, most affordable and secure supply of food and fiber. Given 

the significant decline in farm bill spending, the dramatic downturn in farm income, and generally weak commodity prices, a 

greater investment in these critical policies for rural America 

should be in order. 

Our industry is extremely concerned about the further payment 

limits and eligibility requirements since these policies are too burdensome and restrictive given the scale of production necessary to 

be competitive. EQIP and CSP conservation programs continue to 

be extremely popular across the Cotton Belt. These programs have 

become integral parts of many producers’ operations to help improve and protect the environment. 

Given our reliance on exports, it is essential that U.S. agriculture 

have a well-funded public-private partnership to expand export 

markets and grow demand. A central part of this effort is USDA’s 

MAP and FMD programs. We believe it is justified for the new 

farm bill to invest additional funds in these programs. 

In closing, over the past 3 years, cotton producers have struggled 

with low prices, high production costs, and the resulting financial 

hardships. This has demonstrated the need and it is imperative for 

the next farm bill to bring cotton back into the Title I commodity 

policy to access the full complement of risk management tools such 

as other crops. 

Thank you. 

[The prepared statement of Mr. Lahey can be found on page 94 

in the appendix.] 

Chairman ROBERTS. Kent, I am going to delay you just for a moment. 

Sitting to my right, about three or four rows up is a gentleman 

that I think should be recognized, the former president of Kansas 

State University, who is going to have a hall dedicated—or not a 

hall, but it is an institution of learning, named after him. 

When I came back from Russia and got access to a secret city 

over there during the days of the Nunn-Lugar program, I saw a facility that was producing pathogens—and, Deborah, you have 

heard this speech many, many times. I am sorry to repeat it. But 

the man responsible for me to come back and to really—we sat 

down, and we would talk about agriculture and things, and I said, 

‘‘My gosh, I do not know what we can do. I do not know how we 

can get ready if, in fact, there was an attack on our food supply.’’ 

He said, ‘‘I know what we can do. Kansas State can do it.’’ So the 

person behind the person behind NBAF is sitting right over here 

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19 

and has done so much for this University in Kansas. Jon Wefald, 

please stand up. 

[Applause.] 

Chairman ROBERTS. Jon always did a splendid job of officiating 

football games from his position in the stadium. 

[Laughter.] 

Chairman ROBERTS. I just cannot tell you—I do not know why 

the referees did not agree with us, but that is beside the point. 

Kent Moore from Moore Farms in Iuka, Kent Moore, Kansas 

Corn Growers. Kent, please. 

STATEMENT OF KENT MOORE, FARMER, IUKA, KANSAS, ON 

BEHALF OF THE KANSAS CORN GROWERS ASSOCIATION 

Mr. MOORE. All right. Thank you. I really do appreciate the opportunity to be here and represent Kansas Corn. I am a fifth-generation farmer from Pratt County, Kansas, in the south-central 

part of the State. 

Kansas Corn is very interested in improving and keeping the 

crop insurance program intact and bolstering the areas of weakness that need to be addressed during this farm bill process. But 

today I am going to focus my main comments in regard to Foreign 

Market Development and Market Access Program. 

The growth potential for ag exports is greater today than any 

other sector, and we believe it is time to increase our efforts to provide access to these growing markets around the world. We can 

produce bumper crops, and we need the ability to aggressively pursue trade to sell American grains and American meat around the 

world. Programs like the Market Access Program and Foreign Market Development are critical in building export markets for our ag 

products. But these two programs have had stagnant funding levels 

for a number of years, and we support the efforts of the agriculture 

trade community to increase funding for MAP and FMD. 

Over the years, the effective spending power of these programs 

has decreased by over 40 percent due to factors like sequestration, 

administrative costs, and inflation. Our farmers, through their 

checkoff dollars, support the U.S. Grains Council to develop export 

markets for corn, ethanol, and DDGS. Our checkoff dollars also 

support efforts to build export markets for red meat through the 

U.S. Meat Export Federation. The MAP and FMD programs make 

our farmers’ investment of those checkoff dollars efficient and effective. 

Many of our State’s ethanol plants that provide a needed market 

for our corn today in the State of Kansas were started and funded 

by Kansas farmers who sought new markets for their corn and sorghum. Today our grain surpluses are proof that we can provide 

more than enough corn for feed and fuel. Our ethanol plants provide a key market for our grains, clean domestic fuel for vehicles, 

and a desirable feed for livestock. Ethanol plants in Kansas have 

been a key factor in improving the lives of many rural Kansans. 

Located mainly in rural communities, our 12 Kansas ethanol 

plants produce nearly half a billion gallons of ethanol per year. 

How can the farm bill help ethanol? One way is increased funding for MAP and FMD. Exports are becoming an increasingly important segment of the ethanol industry. Ethanol and ethanol prodmw42035 on AGRINON012 with DISTILLER

20 

ucts are relative newcomers to this export world, and these programs are vital as we seek to expand international sales of both 

ethanol and DDGS. 

While farmers continually improve and adopt new technologies in 

seed, inputs, and equipment that allow us to sustainably manage 

our fields down to the square inch, much risk remains. This is why 

it is imperative that Kansas farmers have a Federal farm program 

that provides themselves and our Nation with the security needed 

to navigate an increasingly complex and challenging world. 

Thank you so much for the opportunity to speak. 

[The prepared statement of Mr. Moore can be found on page 105 

in the appendix.] 

Chairman ROBERTS. Thank you, Kent. 

We now have Cameron Peirce from Peirce Farms in Hutchinson. 

STATEMENT OF CAMERON PEIRCE, OWNER/OPERATOR, 

PEIRCE FARMS, HUTCHINSON, KANSAS, AND VICE-CHAIRMAN, KANSAS SUNFLOWER COMMISSION 

Mr. PEIRCE. Thank you, Chairman Roberts and Ranking Member 

Stabenow. Welcome to the Sunflower State. My name is Cameron 

Peirce. I am the vice-chairman of the Sunflower Commission, and 

I am pleased that you are here to listen to the farm bill programs 

and the impact that they have on the Midwestern producers. 

Annually, Kansas plants around 90,000 acres of oil seed and confection flowers. In 2016, USDA estimated 1.6 million acres of sunflowers were planted nationwide. 

Similar to other commodities, the market price for the sunflower 

has declined over the past 3 years while international production 

has increased, making it increasingly difficult for farms to be profitable. In these challenging times, farm bill programs, and particularly the risk management programs, are vital food security mechanisms that keeps American food safe and affordable. Farm bill dollars are infused back into rural America through purchases of farm 

goods and services, ag inputs, and everyday household needs. 

These programs keep American agriculture successful and give producers a vital safety net. The volatility of weather and markets are 

unpredictable for the Kansas farmer; having a safety net in place 

ensures safe and affordable food can continue to be produced in 

Kansas and across the Nation. 

As you look at priorities in this new farm bill, please consider 

that producers still need a safety net for crop failure and disaster. 

Crop insurance has been and still is the best tool for these situations. Full funding for the crop insurance program is the highest 

priority for sunflower growers, as it is for all commodities. Both 

production and revenue protection insurance products are important options for producers. The flexibility these options offer is important as producers weigh input costs, planting decisions, and premiums. I encourage the Committee to continue the flexibility currently found in Federal crop insurance. 

Conservation programs in the farm bill are also an important 

part of crop production, and sunflowers benefit from having those 

programs in place. Sunflowers are generally part of a robust no-till 

rotation, a practice that has gained wider acceptance and implementation through EQIP funding. NRCS’ soil health initiative has 

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been a big success in the last few years. Producers, agribusiness, 

and commodity investors now understand how important soil 

health practices are to increasing productivity on the land and protecting our natural resources at the same time. Programs like 

EQIP need to be maintained at the current funding levels. 

Some of the newer programs contained in the last farm bill have 

been important to producers, especially over the last 2 years, specifically ARC–County and PLC. These are vital tools for producers 

to maintain their businesses. 

Both of these programs were well intentioned when authorized, 

but could use some improvements in the next version of the farm 

bill to even things out. I hope the Committee will examine some 

of the flaws in these programs as the discussion about reauthorization takes place. 

I understand there will be many more public interests lobbying 

your Committee for other programs and overall debt reduction actions, so I will take this opportunity to remind you that American 

agriculture is the original industry that got this country started. 

We still produce the safest and most abundant food worldwide. 

In Midwest States like Kansas, ag is still a major contributor to 

the State and local economies. We need your support and leadership in Congress to continue our tradition and our way of life. With 

the utmost respect to you and the difficult decisions you have 

ahead, I would ask you remember those of us out in the country 

that put food on your tables as you make these decisions. 

Thank you. 

[The prepared statement of Mr. Peirce can be found on page 136 

in the appendix.] 

Chairman ROBERTS. Cameron, thank you very much for that reminder. Thank you for your strong testimony on behalf of crop insurance. 

Mr. Michael Springer of Springer Family Foods, Independence, 

Kansas. 

STATEMENT OF MICHAEL SPRINGER, SPRINGER FAMILY 

FOODS, LLC, INDEPENDENCE, KANSAS, ON BEHALF OF THE 

NATIONAL PORK PRODUCERS COUNCIL 

Mr. SPRINGER. Good afternoon, Chairman Roberts, Ranking 

Member Stabenow, and members of the Committee. I am Michael 

Springer, a third-generation crop and hog farmer from southeastern Kansas, and I am proud to represent the Kansas and U.S. 

pork industry today. 

Like all pork producers, in the next farm bill I would like to see 

provisions that help strengthen my industry’s competitiveness. I 

would hope it does not contain provisions that would restrict our 

ability to raise and sell animals or compete in the global marketplace. 

The U.S. pork industry’s top priority for the next farm bill is establishing a foot-and-mouth disease vaccine bank. If this country 

ever had an FMD outbreak, it not only would devastate my farm 

and the whole livestock industry, but the entire U.S. economy. An 

Iowa State University study estimates that an outbreak of FMD 

would immediately shut off our meat exports, would cost the U.S. 

pork, beef, corn, and soybean sectors alone $200 billion over 10 

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years. We need the capacity to produce enough vaccine to quickly 

control and eradicate the disease. We need the funds to make that 

happen. 

Specifically, we want the farm bill to direct USDA to contract for: 

an offshore, vendor-maintained vaccine antigen bank that would 

have antigen concentrate to protect against the 23 most common 

foot-and-mouth disease strains currently circulating in the world; a 

vendor-managed inventory of 10 million doses, which is the estimated need for the first 2 weeks of an outbreak; and an international vaccine manufacturer with the capacity to produce 40 million doses of vaccine. That is a mouthful, 40 million doses. 

While an FMD vaccine bank would protect the U.S. pork industry from likely inevitable crisis, a more here-and-now issue is efforts to regulate the buying, selling, and raising of animals. Chief 

among these efforts pushed by the last administration is the Farmer Fair Practices Rules, specifically an interim final rule that is set 

to take effect in a couple of months. That regulation will make it 

easier to sue and win Packers and Stockyard Act cases, which 

carry triple damages. Livestock industry experts have said this will 

lead to an increase in lawsuits and an increase in legal risks for 

the meat industry, which no doubt will take steps to reduce that 

risk. That likely would mean consolidation of the livestock industry, which would reduce, not increase, competition in the marketplace. 

We do not need Government intervention in the market because 

it is working. We are seeing it work now in the U.S. pork industry. 

Five new producer-owned packing plants will be coming online in 

the next 2 years, and there is no doubt these plants will be chasing 

hogs, meaning producers will be good, which should mean getting 

some good prices for animals. 

The bottom line on the farm bill, Congress should craft legislation to help farmers remain competitive and provisions that would 

help us compete. We ask that the Congress consider in the farm 

bill helping us protect our markets and help us protect ourselves 

from disasters like FMD so that our family can help feed your family and the rest of the world bacon. 

Thank you for the opportunity, Mr. Chairman. 

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

152 in the appendix.] 

Chairman ROBERTS. Michael, several years back, we had an exercise on what would happen with an FMD outbreak, with an attack 

from a foreign entity. I was asked to serve as President of the 

United States during that time. I think Secretary Ann Veneman 

came, along with all the Cabinet. During that exercise, it played 

out that it started in Texas, and by the time Texas closed its border, obviously it was in Oklahoma, and by the time—and you can 

see what happened all the way up to North Dakota. We were trying to isolate. By the time we really found out what was going on 

with certain strains of cattle to preserve them, that did not work 

either. We ended up having to terminate a lot of cattle, all sorts 

of problems with that, and I will not go into it. 

All of our export stock—not just meat. When something like this 

happens, it affects all of our exports. Then we lost a lot of products 

from grocery stores—not only 1 year—2 years, 3 years down the 

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road. It was just devastating. That was one of the exercises that 

Jon Wefald and I talked about that made us really work so hard 

for NBAF. So we need a vaccine, and that is a possible thing. I 

mean, this is not some impossible dream. We can do this. So I 

thank you for your comments on that, and thank you for coming. 

Mr. Kent Winter, Kent Winter Farms, Mt. Hope, Kansas. 

STATEMENT OF KENT WINTER, OWNER/OPERATOR, KENT WINTER FARM, MT. HOPE, KANSAS, AND PRESIDENT, KANSAS 

GRAIN SORGHUM PRODUCERS ASSOCIATION 

Mr. WINTER. Chairman Roberts, Ranking Member Stabenow, and 

members of the Committee, I want to thank you on behalf of the 

Kansas grain sorghum farmers for this opportunity to share our 

views on the discussions surrounding the upcoming farm bill. 

I farm near Andale in south-central Kansas, just outside Wichita, 

mostly dryland, producing grain sorghum, wheat, corn, soybeans, 

and alfalfa, and I currently serve as president of the Grain Sorghum Producers Association here in Kansas. 

Kansas again last year was the Nation’s leading producer of 

grain sorghum, coming in with 55 percent of the U.S. crop. Sorghum is used as a feedstock for ethanol, for livestock feed, and is 

also exported to other countries. Prices for most commodities this 

last year have collapsed, and lenders and farmers are very worried 

about producers being able to stay in business. When producers 

apply for a farm operating loan, the banker has two questions for 

them: A, what are your crop insurance guarantee levels? B, what 

do you anticipate in other farm program safety net payments? The 

ability to secure annual operating loans directly depends upon the 

stability of farm programs. That operating capital is what bolsters 

local rural economies. 

The current Price Loss Coverage program is working for sorghum. As prices dropped significantly in the past year, needed support has kicked in for sorghum farmers. We appreciate a PLC program that today helps fill the void that low grain prices have 

caused. 

Mr. Chairman, in regards to the conservation of our natural resources, sorghum is not only the Nation’s premier water-saving 

grain crop, but it also offers many valuable conservation characteristics. Additionally, sorghum is drought tolerant and well suited for 

the arid conditions and is especially important in areas that draw 

water from the Ogallala Aquifer. Sorghum is a proven water-sipping crop and will be a solution, I think, to which many irrigation 

farmers will turn. 

Finally, trade by way of exports remains vital for our industry. 

We support increased funding for the Market Access Program and 

the Foreign Market Development program in this farm bill. 

One last item I would like to address is research. Unfortunately, 

our industry is being plagued by a new insect called the ‘‘sugarcane 

aphid,’’ which has caused significant financial and management 

challenges for our farmers. Research remains the answer for a 

long-term solution to this growing challenge, and we need help to 

deal with it and the damage that it is causing. 

In closing, sorghum is a crop that is planted to make the most 

of difficult growing conditions, and it is also uniquely exposed to 

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risk. Well-thought-out farm programs that address these risks will 

benefit our growers as well as our local, State, and national economies. 

Thank you. 

[The prepared statement of Mr. Winter can be found on page 168 

in the appendix.] 

Chairman ROBERTS. Kent, thank you very much, more especially 

your pointing out the need for forbearance in regards to our situation with credit. We are aware of that particular little fellow that 

is infesting our products, Kansas State is on top of it, and we hope 

we can get some answers for that just as quickly as we can. 

Kenneth Wood—Kenneth, I do not know why on Earth you are 

sitting next to last and then we are reversing this. Obviously very 

poor staff work. 

[Laughter.] 

Chairman ROBERTS. The first speech I ever made when I worked 

for Frank Carlson was for the Kansas Wheat Growers in Dodge 

City. So I guess, Mr. Winter, you will not mind me saying that we 

saved Ken, the best, for the last and for our wheat growers. Please 

proceed. 

STATEMENT OF KEN WOOD, OWNER/OPERATOR, RIVERSIDE 

STOCK FARM, INC., MANHATTAN, KANSAS, AND PRESIDENT, 

KANSAS ASSOCIATION OF WHEAT GROWERS 

Mr. WOOD. Thank you, Mr. Chairman. You may want to reserve 

judgment on that until after I have given my testimony. 

[Laughter.] 

Mr. WOOD. Mr. Chairman, Ranking Member Stabenow, and 

members of the Committee, thank you for the opportunity to address you today. My name is Ken Wood, and I farm in central Kansas. I am president of the Kansas Association of Wheat Growers 

and am honored to submit the following comments: 

Wheat is an important crop for Kansas. With record yields during the 2016 harvest came record stockpiles of wheat in Kansas 

and around the world, resulting in historically low prices. Many 

feel that these low prices and a struggling farm economy are what 

caused Kansas wheat farmers to plant nearly 1 million fewer acres 

last fall, the second lowest planted wheat acres in Kansas in over 

a century. 

Low prices and rising costs are placing even more stress on the 

Kansas wheat farmer, forcing them to cut budgets and find efficiencies. This situation highlights the need for Federal programs 

like crop insurance in Title I and illustrates the vital importance 

of a farm safety net. 

Crop insurance, for me, is the most important segment of that 

farm safety net. When a natural disaster looms on the horizon, 

whether it is a drought, flood, or in my case, a tornado, we know 

that crop insurance will help keep us in business. 

On May 25, 2016, my farm, home, vehicles, most of my machinery, and approximately 300 acres of my crops were destroyed by an 

EF4 tornado. The availability of crop insurance was not the deciding factor, but certainly a contributing factor in my decision to rebuild my business. I honestly do not think that I would have had 

the courage to start over without having the protection that crop 

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insurance offers. I insure my buildings and machinery investment. 

Likewise, I want to insure my crop investment. For most of us, 

crop insurance will not guarantee a ‘‘good year,’’ but it offers the 

promise of ‘‘another year.’’ 

Despite passage of a 5-year farm bill, some in Congress continue 

to come after Title 1 farm programs and the Federal crop insurance 

program. Efforts to cut crop insurance have come after the Federal 

share of premium support, either through hard caps or through establishing AGI limitations on eligibility. Such caps would limit participation and make crop insurance more expensive for all of us. 

Increasing demand for wheat products is one way to help turn 

the agricultural economic situation around through increasing food 

aid and by supporting international trade. Increasing trade is one 

of the easiest and most effective way to increase commodity prices 

and improve the rural economy. Kansas ranks as the 8th largest 

State in terms of exports of agricultural products. Because of this, 

our association has been a major supporter of international trade 

deals such as NAFTA and TPP. On average, half of the wheat 

grown in Kansas is exported. Without trade, the Kansas farmer 

will continue to struggle. 

Finally, once we do have trade deals, we need to make sure that 

we are taking action to enforce them. U.S. farmers are not on a 

level playing field in the international marketplace due to subsidies 

employed by other countries. 

I would like to thank you for holding this farm bill hearing in 

Kansas, and I look forward to answering any questions that you 

might have. 

[The prepared statement of Mr. Wood can be found on page 171 

in the appendix.] 

Chairman ROBERTS. Thank you again to all of you for taking the 

time to join us today. 

Senator STABENOW. I have a few questions here, and I a going 

to turn to you. Then if there are any other questions that you feel 

that we have not covered—I am talking to the panel—please let us 

know. 

Everybody up here has talked about crop insurance, thank goodness. Over the last couple of years, Kansas producers faced a range 

of natural disasters—floods, drought, wildfires, freezes—wildfire, 

man, that was something else in south-central Kansas—yes, even 

tornadoes. For years, Kansas producers have said the crop insurance program is not simply beneficial, but it is critical to managing 

risk. We just heard that testimony from the Kansas wheat growers. 

From your standpoint and the commodities you represent, is crop 

insurance working to provide adequate coverage for these types of 

natural disasters? Ken, I am going to start with you, and just go 

right down the line. Where are you, Ken? Right there. Down the 

line and back again, if you want to. 

I am sorry. Are you talking about Kent Winter? 

Staff. Start at that end and work back. 

Chairman ROBERTS. Okay. Since there was this terribly egregious mistake that staff made, we are going to start at the end of 

the table and go that way. All right? 

Mr. WINTER. Mr. Chairman, would you please repeat the question again? 

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Chairman ROBERTS. Crop insurance, how valuable—— 

[Laughter.] 

Chairman ROBERTS. We are back to crop insurance. I am sorry. 

Basically, I am asking from your standpoint and the commodities 

you represent, is crop insurance working to provide adequate coverage for these types of natural disasters? 

Mr. WINTER. Mr. Chairman, I believe that crop insurance has 

been working very well for our situation, and I also want to mention that the amount of assistance that we have on our premiums 

is what helps make this program work. I am fearful that if that 

was not out there, we would not have the participation level that 

we now have. 

Chairman ROBERTS. I want to thank the distinguished Senator 

from Michigan for joining me and several others on the floor of the 

Senate where there was proposed yet another—after $6 billion and 

another $6 billion, they proposed another $3 billion cut with the 

last continuing resolution. I sort of had a conniption fit, and we 

took the floor. We had a colloquy, we had bipartisan support, and 

that cut was eliminated. 

I can just tell you, in terms of crop insurance, we have to have 

adequate funding. If that is not going to happen, well, it is not 

going to happen. So I appreciate that. 

Does anybody else want to contribute to that? 

Mr. WOOD. I would have to agree with Kent about how important 

crop insurance is. It is vitally important for us as producers to 

know what the worst-case scenario is so we can plan from there, 

and along that same line, it is very important that our lenders and 

our bankers and people who finance us also know what our worstcase scenario is. So like I said before, it is not going to make a good 

year for you, but it actually gives you some stability and a little 

bit of confidence that you will be able to go into the next year. 

Chairman ROBERTS. I appreciate that. Thank you very much. 

Mr. Clawson, your testimony mentions that decisions regarding 

marketing of cattle and beef are best left to the industry rather 

than Congress. Can you describe an example where beef producers 

as an industry banded together to address marketing concerns? 

Mr. CLAWSON. Yes. For more than a year, the National Cattlemen’s Beef Association has had a working group that has been discussing issues like price discovery, market volatility and futures 

contract specifications. The Fed Cattle Exchange, which is an online fed cattle market, is the result of this working group that got 

together, and it has come to fruition. The Fed Cattle Exchange 

gives pricing information back into the markets, so that is one 

area. 

Another one is our KLA working group that we are trying to 

come up with different ideas, and we think we have come up with 

more robust pricing information being available in the mandatory 

price reporting data. Now, this is data that is already being reported, and we have asked for access to that so we can do our analysis, and we have been denied. So we would ask this Committee’s 

help in getting access to that data so we can do our analysis. 

[Pause.] 

Chairman ROBERTS. We are going to work with you on that. 

Mr. CLAWSON. Thank you. 

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Chairman ROBERTS. I had asked simply if we have made that request, and we will be working with you to get that done. 

Amy, you mentioned in your testimony some of the regulatory 

burdens impacting your farming operation. During these tough 

times, I am sure these costs can be very crippling. Can you elaborate or share other regulatory challenges impacting your farm’s 

profitability? My next question tied into that is: Do you feel resources at the USDA, for example, conservation program dollars, 

are being directed to address regulatory requirements? Or would 

anybody else on the panel wish to add anything along these lines? 

Please. 

Ms. FRANCE. Yes, thank you. I got a little distracted by my time 

limit, and you said the gavel would go down at 3 minutes. I actually wanted to address regulatory burdens. Again, with EPA restricting more and more chemicals, in turn that increases our tillage, burning more fuel and adding wear and tear on our already 

aging equipment. So that is another thing. For instance, atrazine 

is one that we use, and although there are alternatives out there, 

it has been forecasted that if we lost atrazine, it could cost the 

farmers between $30 to $59 per acre, which would be extremely 

devastating to our bottom line. 

Another way is, unless Congress acts on the Worker Protection 

Standard (WPS), we will be forced to sell our spray rig and hire 

it done. In that case, we are the ones that know our fields better 

than anyone else and when things need to be done, and we cannot 

wait on overbooked professional applicators. So that is something 

as far as regulatory burden that we feel needs to be addressed. 

Chairman ROBERTS. Thank you for that. 

Anybody else? 

Mr. WINTER. Mr. Chairman? 

Chairman ROBERTS. Yes, sir. 

Mr. WINTER. I would also like to comment on atrazine. If we lose 

that, that will be devastating to our industry. It is frustrating—and 

I will try to be respectful here, but it is very frustrating to see that 

the EPA is ignoring decades and decades of sound science, over 

7,000 studies that have proved the safety of the chemical, the herbicide called ‘‘atrazine.’’ A lot of what appears to be going on from 

my side of the fence is they are changing the rules, they are moving the goalpost to where the sound science is being discarded, and 

they are using models that really are not applicable to modern-day 

agriculture to make these decisions with. 

The other thing I would like to point out is regarding the Waters 

of the US. I want to give you just a little bit of a sense of how that 

would have impacted me. A year and a half ago, in August of 2015, 

we learned that it was time to spray sugarcane aphids. They had 

come up out of Oklahoma very, very rapidly. So while we were lining up the artillery, so to speak, to take care of this situation, we 

did not have much time. We just had a couple of days. We did not 

know it at the time, but we were protecting 150-bushel-an-acre 

dryland grain sorghum. Had WOTUS been fully implemented, we 

would have been mired and mired and mired in the process for getting permit applications in order to do this spraying. So that would 

have been devastating to us in that particular situation. 

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Chairman ROBERTS. What water would WOTUS have been protecting on that ground or on that crop? 

Mr. WINTER. As I understand it, the WOTUS regulations, if fully 

implemented, would impact and take into account every little low 

spot in the field, every little gully in the field that drains toward 

a creek or a river. We are talking about small gullies that may only 

have water in them a couple of days out of the year. 

Chairman ROBERTS. So, in other words, WOTUS was being made 

applicable to dry creek beds and farm ponds where no self-respecting duck would ever land, right? 

Mr. WINTER. That is correct, Mr. Chairman. 

Chairman ROBERTS. Yes, that is now before the courts, and as 

a CRA—the Congressional Review Act—subject, we are going to 

have a lot of talks about that. 

Senator Stabenow, I have taken way too much time here for 

questions. Please. 

Senator STABENOW. Well, thank you, Mr. Chairman, and thank 

you to each of you for your input. It is very important. 

I wanted to ask a little bit about our voluntary conservation 

practices. Many of you have mentioned EQIP and the Conservation 

Stewardship Program in particular. But, Mr. Lahey, I wondered if 

you might speak a little bit. You stated that both the EQIP and 

CSP programs are highly accessed by cotton farmers, and I wondered if you might share in more detail what the biggest conservation issues are for your farmers and why these working lands programs are so important to helping address those. 

Mr. LAHEY. I am not in the middle of cotton country, but when 

I developed my testimony, I used information from the National 

Cotton Council. In my area we have crop rotation, so our erosion 

control is not much impacted. EQIP, just yesterday a neighbor 

talked that he was accepted into the EQIP program to idle irrigation system that will save water and he can dryland farm that. So 

that was one benefit of the EQIP. 

The CSP programs are active and help in my area where there 

is water and fencing and stuff like that in my area. But I am not 

in the middle of cotton country, being located in southwest Kansas. 

Senator STABENOW. I got you. Okay. 

Mr. Heinen, you had talked about that both EQIP and CSP 

should be fully funded in the next farm bill. I am just wondering, 

as we go forward and locate all these programs in conservation, I 

wonder how each of you might respond to that. I know that EQIP 

and the Conservation Stewardship Program are used a lot in Kansas, but I wondered Mr. Clawson, if you have any thoughts on 

that? I wonder if you could just answer yes or no, do you think that 

these are two things that ought to be fully funded? 

Mr. CLAWSON. Yes, the EQIP program has been very beneficial 

for the livestock industry. I think 60 percent of the program goes 

toward the livestock, and that helps—— 

Senator STABENOW. It does, yes. 

Mr. CLAWSON. That helps us with the ponds, the lagoons, and everything, and makes sure those are getting put in correctly and 

right, and we get cost-share to get those done. We put in water systems in pastures and fencing systems to be able to better rotate 

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through those pastures. I mean, there are a number of benefits to 

the environment because of the EQIP program. 

Senator STABENOW. All right. Thank you. 

Mrs. Foster, EQIP and Conservation Stewardship Program, are 

those priorities? 

Ms. FOSTER. Well, we have not personally used the EQIP program, but we have relied on, when we wanted to do some conservation things, our extension specialist out at K–State for some of 

those things. We did have some ground in CRP, which just recently 

came out, and we are still waiting on some rules and regs to decide 

whether to put those back in or not. 

But I do know other farmers use EQIP quite a bit, and so I 

would say it is very important to them. 

Senator STABENOW. Right. Mrs. France? 

Ms. FRANCE. I would just reiterate what I said earlier, without 

the EQIP program, we would not be able to rebuild terraces and 

install the water wells for our cattle. At this time, with the markets the way they are, we are utilizing those programs very heavily, and we are thankful they are there to assist when we cannot 

do it on our own with these tough economic times. 

Senator STABENOW. Great. Mr. Heinen, you had mentioned before both EQIP and CSP, and in looking at the numbers, it looks 

like the Conservation Stewardship Program is very highly used in 

Kansas. Are both of those programs, do you think, important? 

Mr. HEINEN. Very important. In Brown County, we have pretty 

deep fertile topsoil, but we need to keep it where it belongs, and 

EQIP money helps us with conservation practices. The CSP program, I have family across the border in Missouri—but they are 

farmers and they still count. 

[Laughter.] 

Senator STABENOW. We will let them know you said that. 

Mr. HEINEN. They really rely on the CSP program for nutrient 

levels. They do a lot of soil testing. They do a lot of precise fertilizer application and use that money to improve soil quality and 

water quality. Both important programs. 

Senator STABENOW. Great. Mr. Moore? We will just kind of go 

down the—— 

Mr. MOORE. I would echo what everyone here said. EQIP and 

CSP is something that is utilized and very beneficial to producers 

in Pratt County, Kansas, and all the other 104 counties in Kansas. 

It is critical that we have the funding in place to support the conservation efforts of that, and I would throw CRP into that mix also. 

I mean, I do not know that the acre cap needs to go up, but CRP 

has played a huge role in the State of Kansas, and it has been a 

benefit. Our farmers have been participants in the Conservation 

Reserve Program, and we have been able to retire some land that 

Grandpa just should not have plowed. 

Senator STABENOW. Thank you. Mr. Peirce? 

Mr. PEIRCE. I have had firsthand experience with the CSP program from 2004. We were a Tier 4 qualifier, and we used that to 

grid-sample all of our fields and variable rate apply all of our fertilizer and stuff. So we have been able to cut back and be more efficient with what we do with that, and also that helped us kind of 

do our full transition into no-till as well, which has aided in water 

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quality and soil quality. The EQIP program has kind of gone hand 

in hand with that. 

I just had someone out just the other day to look at some terraces that were put in around the early 1980s, and the tile terrace 

part of it—the system was only designed to last for 20 years, and 

it has been almost 40, and he said it was time to redo it. But it 

has worked good for this long. Yes, we are big believers in the programs. 

Senator STABENOW. Thank you. Mr. Springer? 

Mr. SPRINGER. Fully funding CSP and EQIP is very important to 

the pork industry. Firsthand, I am currently working on our farm 

with NRCS on a pipeline and pumping project for moving livestock 

waste, and all livestock production, we are stewards of the environment. We have some increased uncertainty from environmental 

regulations. Having EQIP and programs like EQIP and CSP help 

us bear the financial burden that comes as some of these regulations come down the line, because whether we agree or disagree 

with the regulation, taking care of the waters of Kansas and the 

United States is very important for our family and people in our 

business. 

Senator STABENOW. Thanks very much. Mr. Wood? 

Mr. WOOD. I cannot really speak very intelligently about the 

CSP. It has not been used very widely in my part of the State— 

that I know of, anyway. EQIP is used quite a bit. I think it is kind 

of a carrot out there to help maybe get people to do some things 

that they want to do, want to be able to do conservation-wise, and 

it maybe just gets them a little bit over the hump to where they 

are able to afford to do that. So I think it is a pretty important program to maintain. 

Senator STABENOW. Thanks. Mr. Winter? 

Mr. WINTER. Yes, I think both programs are very important. I 

myself have not participated in them, but my understanding is 

that, as you go west in the State, more and more sorghum farmers 

are using them. I would like to see the CSP adjusted in a way that 

would encourage more grain sorghum in rotation with other 

dryland crops. 

Senator STABENOW. Thank you. 

Mr. Chairman, I will turn it back to you. I think we have a second round, do we? 

Chairman ROBERTS. Yes, we do. 

Senator STABENOW. I will turn it back to you. I have got a couple 

more questions, yes. Thank you. 

Chairman ROBERTS. Just a couple more, if I might. 

Lucas, you and several others mentioned the importance of the 

Market Access Program and the Foreign Market Development Program. That is called MAP and FMD. Do not get it confused with 

the other FMD. There is no question in my mind that many of the 

challenges you face in the current farm economy can be eased by 

a strong trade policy. We both have talked about that at length. 

Can you provide examples as to how your industries are using the 

MAP or the FMD funds to develop and expand markets around the 

world? 

Mr. HEINEN. I will do my best. I had the privilege of serving on 

the WISHH Committee of the American Soybean Association, and 

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31 

I might add I saw him in the hallway and I think he is still here, 

but Professor Flinchbaugh told me that Washington has its own 

language and the town runs on acronyms, and he is right. 

Chairman ROBERTS. Let me just intervene at this particular 

time. 

[Laughter.] 

Chairman ROBERTS. The MAP program is called ‘‘Market Access 

Program,’’ more access for our markets. It used to be called the 

‘‘Market Promotion Program,’’ and I could never get enough votes 

for it when I was in the House, when I had the privilege of being 

Chairman of the Ag Committee in the House. So I, Pat Roberts, 

changed an acronym. 

[Laughter.] 

Chairman ROBERTS. I consider that one of my top achievements. 

I do not know if I will ever do any better. Instead of Market Promotion Program, which nobody wanted to pay for, the Market Access Program worked. So there you go. Fire away. 

Mr. HEINEN. Okay. Nice work on the acronym change. 

Chairman ROBERTS. Thank you. Appreciate it. 

[Laughter.] 

Mr. HEINEN. We had a program in partnership actually with K– 

State involved with WISHH in Pakistan. It starts with FMD and 

MAP money, and it built the ground level, and it got funding from 

other sources. But it was to use soybean meal in fish farming, in 

aquaculture in Pakistan. It took an industry that used no soybeans 

at all, no Kansas soybeans especially, to a significant consumer of 

soybean products in a fairly short period of time. It was a win-win 

for us, for the university, for the Pakistani aquaculture industry. 

Chairman ROBERTS. Is that still ongoing? 

Mr. HEINEN. The funding—the WISHH side of that is not ongoing, no, but it laid the groundwork. The program is still in effect. 

The guys in Pakistan are still using the beans. 

Chairman ROBERTS. I appreciate that very much. 

Mr. Moore, corn growers would like to see the ARC-County program continued and improved. Any county-based program is going 

to have some level of differences between counties. Can you walk 

us through what you see are causing the most concerns with the 

program in its current form? 

Mr. MOORE. I think it is just the yield data discrepancies that 

we face, and I think a lot of that is due to the reluctance probably 

that we see—we were told that there were data gaps because of the 

farmers’ reluctance to fully participate in National Ag Statistics 

Service surveys. I think, like it has been stated up here earlier, 

that—I mean, I do not see why we cannot use RMA data for those 

yields, because it is provided. I mean, anybody that participates in 

the crop insurance program is providing that yield. RMA has it. So 

why can’t we use it? That would go a long way in leveling the playing field from county to county on getting the data that is needed 

to implement the programs like they are designed to run. 

Chairman ROBERTS. I appreciate that. That is a very good suggestion. 

Mr. Springer, the pork industry, growing in Kansas, growing in 

Michigan. The Ranking Member has emphasized that expansion in 

her State. I understand one of the three new pork packing plants 

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32 

will be operational in Michigan by the end of the year. Given the 

positive growth that industry is experiencing, what impediments to 

growth have you encountered as a family business and as an industry more generally? 

Mr. SPRINGER. Okay. Thank you, Chairman Roberts. Uncertainty 

is a killer in any business project. But in agriculture, we are really 

good at overcoming uncertainty and the unexpected. So I would 

like you to think this way: When we build a hog facility or a livestock feeding facility or buy a piece of land, we are making a longterm investment. In our business, those could be anywhere from a 

few thousand dollars to a few million dollars. Those are 30-year investments, and they are extremely expensive to repurpose, and 

they basically have one function. 

So we need to know the regulatory environment that we are 

working in when we make the investment. So anything—I would 

not say that there are specific things that have said, hey, that is 

going to stop the Springer family from growing, but when the combination of uncertainty from feed ingredient requirements, environmental regulation, if export and marketing agreements do not happen—and then the big one is animal housing. If we get an animal 

housing law that would prevent us from putting the number of pigs 

in our facility that we designed it for, then we have an issue, and 

it requires an investment. If we get enough of those issues at the 

same time, there will come a time that we say it is not worth doing 

anymore. So the management of the uncertainty. 

Chairman ROBERTS. Thank you for that. 

Lynda, you laid out quite the case for adjustments to the Market 

Protection Program, MPP—we have to have the acronym—in order 

to better serve dairy farmers. My question: For the first time in the 

history of mankind, can the dairy industry be able to stick together 

and agree to changes you would all like in the farm bill? 

[Laughter.] 

Ms. FOSTER. Your guess is as good as mine. 

I really think in the last couple of years the dairy industry has 

come together far more, or we probably would not have the MPP 

in the first place. The way it was designed, the first year a lot of 

dairy farmers signed up. Personally, we signed up I think at the 

$6 level. But when we had low prices, because of the distorted formula through that 10-percent cut, months when it should have 

kicked in, it did not because the wrong margin was there. So farmers could see from what was projected it was not going to pay. So the next year, very few signed up at $100, the basic catastrophic level, because you had to sign up, you were already in that 

program. Well, this last year, things did not look any better, so everybody practically signed up just at the $100 level. They were not 

signing up at the higher percentages because they are not kicking 

in. 

One of the reasons is we have—the way it was designed, it said 

for 2 months, January-February, March-April, had to be low in 

each of those 2-month segments. But if you were low in February 

and March, it did not kick in. Where they come up with one month 

is better than another month and you have to have a 2-month average I have not figured out. Cows do not milk month by month. You 

know, you got to milk them every day. So that is one thing we 

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would like to see changed, is some of those tweaks. But if we get 

some of those tweaks made, I really feel dairy farmers will come 

on board, because right now they are very—they are disgusted, 

they are disgruntled, because it is not working and we have had 

low prices and low margins. 

Chairman ROBERTS. I really appreciate that. Thank you very 

much. 

Senator Stabenow, do you have any further questions? 

Senator STABENOW. Thank you. Just a couple. One to follow up, 

Mrs. Foster, on that, we grow a lot of different things, and have 

a lot of different producers in Michigan, but dairy is really important for us, and I have heard from my dairy producers, milk producers as well, real concerns about the new program. Everything 

is complicated as we have put together pieces in the farm bill, but 

it seems like dairy is always particularly complicated just because 

of the different sizes and different regions in the country and so on. 

But you talked in your testimony about how other commodities 

have overlapping protection from the Farm Service Agency programs and Federal crop insurance, and that is not available for 

dairy farmers. So in addition to what we know in terms of the program that was put together that we need to fix, could you talk a 

little bit more about that? 

Ms. FOSTER. Well, when I have my crops, I can take out crop insurance, and I can do the ARP and the—decide on those other programs. But with dairy, I had to choose either the MPP or one of 

those risk marketing agencies, management ones, the LGM I believe it is, Livestock Gross Marketing, which I am not personally 

familiar with, but I know a lot of farmers used it. But we could not 

use both. We had to choose one or the other; whereas, other commodity groups have several choices and can use more than one. 

Senator STABENOW. That is something we need to take a look at. 

Ms. FOSTER. Just by the way, I saw a few of your dairy producers 

from Michigan just yesterday at the meetings. They are great people. 

Senator STABENOW. They are. They are. 

[Laughter.] 

Senator STABENOW. They are the best. Well, we cannot close out 

this panel, Mr. Chairman, without my asking about something that 

we worked so hard on together related to livestock last time, which 

was a huge, important, new funding piece that we included. I think 

the three livestock disaster assistance programs received all together, in permanent funding, something like $3 billion. It was one 

of the big things that we did in the farm bill. I am wondering, Mr. 

Clawson, how is that working from your perspective? How important are those programs to livestock industry and how much are 

the Kansas producers using these programs? 

Mr. CLAWSON. When the drought came about, it was used very 

heavily, the livestock disaster—the drought protection that we got, 

and a number of producers were able to utilize that, and thank you 

for adding that. 

Another provision is the Emergency Conservation Program, I 

think is what you call it. We had a huge wildfire last year, over 

400,000 acres rangeland burnt in the southern part of the State, 

with fences and just totally devastated. There was a lot of people 

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that donated hay that was needed right away, as well as fencing 

supplies and monetary funds. KLA and the Kansas Livestock Foundation helped disburse that. But on a longer-term fix, that Emergency Conservation Program has kicked in as a cost-share to put 

back these permanent fences. That has been just a godsend to 

those people because they are able to get that land back into production almost immediately. Where for a lot of them it might have 

been 3 to 10 years to get those fences back in to be able to finance 

them and get them put back, with this program it has been able 

to get the land back into production. 

As you well know, grass needs to be grazed, or else we start losing production on it. So we are able to put fences back in to have 

a structured grazing program to be able to take care of the grass. 

Senator STABENOW. Well, thank you. 

Thank you, Mr. Chairman. I appreciate the excellent input from 

this panel. 

Chairman ROBERTS. Thank you so much. Thank you so much. I 

think you deserve a round of applause, ladies and gentlemen. 

[Applause.] 

Chairman ROBERTS. We will now convene the final panel for today’s hearing on the 2018 farm bill. This panel is composed of representatives who work in industries that support production agriculture and our rural communities. After all, you cannot grow food 

and fiber without credit or power or water and many other important functions performed by the industries on this panel. While the 

first panel is departing, I will introduce the second panel. 

Our first witness on this panel is Shan Hanes. Shan, if you will 

come back. Okay. We have got the monikers, and we have the people coming aboard. 

[Pause.] 

Chairman ROBERTS. Our first witness on this panel is Shan 

Hanes. Sshhh. It is amazing how that works. 

After growing up on his family farm in the Oklahoma Panhandle 

and graduating college, Mr. Hanes accepted the position as an ag 

loan officer for the First National Bank of Elkhart and Rolla in 

1993, where he served as both an ag loan officer and IT officer for 

13 years. In 2008, he became president and CEO of the First National Bank, a position he holds today. Shan, thank you for joining 

us today. You have come back, Shan. 

[Laughter.] 

Chairman ROBERTS. Now, that dates me an awful lot, if nobody 

in the audience can remember that was a movie by Alan Ladd, and 

he left, and little Brandon De Wilde came out and said, ‘‘Come 

back, Shane.’’ He is back. Now, come on. 

[Laughter.] 

Chairman ROBERTS. Next I would like to welcome Mrs. Catherine Moyer. Catherine, I believe our last meeting was just this 

past October in Allen for the Rural Broadband Roundtable that we 

hosted with FCC Chairman and fellow Kansan, Ajit Pai. It is good 

to see you again. Catherine is the general manager and CEO of 

Pioneer Communications, a telephone and communications company that serves residents and businesses across southwestern 

Kansas. She holds a bachelor’s degree from Middlebury College and 

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a law degree from Washburn University. She resides in Ulysses 

with her husband, Kevin. Welcome, Ms. Moyer. 

Ms. Kathleen ‘‘Kathy’’ O’Brien is representing our Kansas electric cooperatives today. Ms. O’Brien is the general manager of the 

Nemaha-Marshall Electric Cooperative in Axtell, where she has 

worked in a number of capacities for the past 26 years. She currently chairs the Kansas Electric Cooperative Association Board of 

Directors and is the first woman to hold that position. Thank you 

for joining us today, Ms. O’Brien. 

Our next witness is Mrs. Gena Ott. She joins us from Emporia 

and is representing the Frontier Farm Credit folks. Growing up on 

a third-generation farm in east-central Kansas, Gena developed a 

deep appreciation for agriculture and rural communities. She graduated from Kansas State University with a degree in agribusiness. 

In addition to Gena’s three-decade career with Farm Credit, she 

and her husband have a small cattle operation. Gena, thank you 

so much. 

Mr. Derek Peine, chairman of the board of Renew Kansas, in 

Oakley, our next witness, is here on behalf of the Kansas Grain 

and Feed Association. Mr. Peine is the CEO of Western Plains Energy located in Oakley. He is a 1997 graduate of Kansas State University. He was recently elected chairman of the board of Directors 

of Renew Kansas, a State trade association that represents the 

independent ethanol plants in Kansas as well as farmers and those 

who provide services to the ethanol industry in our State. 

We also want to welcome here today on behalf of the Kansas Cooperative Council Mr. Greg Ruehle. Mr. Ruehle is president and 

CEO of Servi-Tech. That is the Nation’s largest independent agronomic firm headquartered in Dodge City, Kansas, America. Mr. 

Ruehle manages a diverse staff of nearly 200 agronomists and laboratory technicians, information technology sales, and communications staff members across the Commission’s eight-State footprint. 

His family lives in Dodge City and maintains a diversified familyowned livestock operation in eastern Ford County. Welcome, sir. 

Mr. Clay Scott, the Kansas Water Congress of Ulysses. He hails 

from Ulysses where he farms corn, wheat, and raises cattle. Mr. 

Scott currently serves on the board of directors for the National 

Water Resources Association, as a delegate to the Kansas Water 

Congress, and a board member of the Southwest Kansas Groundwater Management District. Thank you, sir, for joining us. 

Cherise Tieben, city manager for the city of Dodge City, has been 

with the city for 26 years. Graduating from St. Mary of the Plains 

College, Dodge City, in 1989—God bless St. Mary of the Plains— 

she went immediately into full-time employment with the city and 

has worked in a variety of capacities leading to her current post 

as city manager. We sure look forward to hearing from you. 

We will now begin the testimonies of the final panel. I ask each 

witness to try to keep their statements to 3 minutes, as we have 

asked the previous panel. Ms. Ott, you may proceed. Where did we 

go with Ms. Ott? Right there. We decided to start in the middle on 

this one. 

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STATEMENT OF GENA OTT, FINANCIAL OFFICER, FRONTIER 

FARM CREDIT, EMPORIA, KANSAS 

Ms. OTT. Okay. Chairman Roberts and Ranking Member Stabenow, thank you for the opportunity to testify today on behalf of 

Frontier Farm Credit. My name is Gena Ott, and I am a financial 

officer and a 32-year employee of the Farm Credit System, and I 

have worked both in lending and in crop insurance roles. I respectfully request my testimony be entered for the record. 

Frontier Farm Credit has a lending portfolio consisting primarily 

of corn, soybeans, wheat, and cattle. Many of our customers also 

depend on off-farm income and farm program payments, including 

ARC, PLC, CRP, and CSP, to enhance their loan repayment capacity. 

To give you a high-level view of credit conditions in the Midwest 

generally, the upper 50 to 60 percent of our grain producers are 

holding their own, with many showing some minor profitability. 

The bottom 15 to 20 percent of grain producers are experiencing 

stress as a result of a combination of higher debt load, high cost 

of production, and overall lack of profitability. 

In the cattle sector, increases in cow numbers will cause fed cattle prices and margins to be under significant pressure, while cattle 

feeders will get some relief from cheaper calf prices. 

With our expertise and commitment to their success, adjustments are being made to sustain these operations through the 

present cycle. In all cases, these conversations are individual to the 

customer and to the operation, and we will work with them every 

step of the way. We were intentionally conservative in the good 

times so that we can be courageous during these more difficult 

times. 

From producers, we hear daily accounts of the importance of developing strong markets and reducing regulations to improve viability of their farms and ranches. 

The financial commitment required to grow an operation is especially challenging for less established producers. Frontier Farm 

Credit makes extraordinary efforts to support young, beginning, 

and small farmers. Our specialized lending programs use modified 

credit standards, and we underline the need for protecting against 

production and price risk with this segment. 

Mr. Chairman and Ranking Member Stabenow, I want to thank 

you, both of you, for your commitment to crop insurance. It is an 

important public and private partnership and a critical risk management tool for farmers. The strength of the current crop insurance partnership rests in the ability for a farmer or rancher to select products that meet their needs for individualized risk protection. As you know, the program is a top priority among all ag 

stakeholders. 

Producers who purchased crop insurance in 2012 mitigated the 

direct financial impact their operations would have experienced 

due to the drought that year. The crop insurance program performed as intended, averting the need for ad hoc disaster assistance. 

Similarly, the LRP, livestock risk protection, and the pasture, 

range and forage program have been effective for offering some risk 

protection to those in the cattle and grass sectors. 

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Switching gears for a bit, I would like to direct your attention to 

my written testimony which highlights our grant programs, advancing agriculture education, young and beginning producers, 

hunger and nutrition, and essential services and disaster relief 

needs in rural communities. 

Our outreach helps support the organizations such as 4H, FFA, 

and the Kansas Farmer Veteran Coalition and a program that I am 

particularly proud to be involved with, Women Managing the 

Farm. 

Chairman Roberts, it is always great to have you back home, and 

we are proud of the work you do on behalf of us every day. Thank 

you, Ranking Member Stabenow, for coming to Kansas to listen. 

We know that you understand the challenges facing world communities in agriculture and ask you to share your knowledge and experience with your colleagues to help them understand, too, as you 

work through the farm bill. 

Thank you. 

[The prepared statement of Ms. Ott can be found on page 126 in 

the appendix.] 

Chairman ROBERTS. Gena, thank you for your excellent testimony, and we are going to get straightened out here and start here 

with Mr. Hanes and go right down there, and if you really want 

to repeat that testimony, you can do that. 

[Laughter.] 

Chairman ROBERTS. We will jump right on down the line. Mr. 

Hanes, please. 

STATEMENT OF SHAN HANES, PRESIDENT AND CHIEF EXECUTIVE OFFICER, FIRST NATIONAL BANK OF ELKHART, ELKHART, KANSAS, ON BEHALF OF THE AMERICAN BANKERS 

ASSOCIATION 

Mr. HANES. Chairman Roberts and Ranking Member Stabenow, 

I am Shan Hanes, president and CEO of First National Bank in 

Elkhart, Kansas. I am proud to be an ag banker in a rural community for 20-plus years. 

Just so you know, First National Bank is a $78 million bank located in Elkhart, the county seat, with a branch serving Rolla. I 

appreciate the western representatives that you have on our panel. 

We consider Ulysses central Kansas. 

[Laughter.] 

Mr. HANES. Dodge is eastern Kansas, since where Elkhart is at. 

We have 21 employees. We are a typical ag bank in Kansas. We 

are the largest lender in the county. 

In addition to my CEO duties, I am a member of the American 

Bankers Association and the Kansas Bankers Association. I appreciate the opportunity to present the views of ABA, KBA, and especially rural lenders and the impact of the Agricultural Act of 2014, 

better known as the ‘‘2014 farm bill.’’ 

One of the biggest successes of the 2014 farm bill, as already 

stated, was the continued support of crop insurance. By providing 

support based on each producer’s proven crop yields, crop insurance 

continues to provide a guarantee that helps lenders secure financing for operating credit. It is important that crop insurance works 

for all producers, especially as commodity prices have declined. 

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Low commodity prices have hurt crop insurance’s ability to provide 

a solid safety net, and this is concerning for everyone. 

Another success of the 2014 farm bill is the continued support of 

the Conservation Reserve Program. CRP is vital to my area. It provides another avenue for farmers to find productive use for their 

land. In addition, the Committee should be commended for its commitment to the Farm Service Agency’s guaranteed lending programs. However, I believe there is a need to consider reforms to the 

programs, specifically to raise the lending limit cap on guaranteed 

ownership and guaranteed operating loans due to the risking cost 

of agriculture. The guaranteed loan programs have allowed our 

customers to continue to access credit from banks like mine as they 

grow, ensuring credit access for bank customers across the country. 

From a lending perspective, there needs to be consideration of 

changes to the ARC and the PLC programs. As you are well aware, 

commodity prices were much higher in 2014. With price changes 

significantly, producers need to have the ability to make elections 

on their farm programs on a yearly basis. Lastly, and most importantly, farmers currently do not receive their payments in the same 

marketing year. This has caused an issue for lenders as well as 

producers, as we cannot properly account for their payments as a 

part of their loan repayment strategy. 

I would like to point out that in 2016 farm banks like mine in- creased ag lending 8 percent and now provide over $100 billion in 

total farm loans. It is also important to touch on the regulatory environment for lenders. Our main competitor, the Farm Credit System, has a regulator that focuses on them and only them. Banks 

have multiple regulators and often have to teach a regulator some 

of the intricacies of ag lending. This can be very frustrating when 

regulators go through the review of the bank both for the officer 

and for the borrower. Regulators often question the structure of ag 

loans, and every regulator seems to have a differing opinion on 

what is a safe ag loan. Despite these difficulties, I believe the banking industry is well positioned to meet the needs of rural America. 

Thank you, and I would be happy to answer any questions you 

might have. 

[The prepared statement of Mr. Hanes can be found on page 80 

in the appendix.] 

Chairman ROBERTS. Thank you, sir. 

Catherine Moyer, general manager of Pioneer Communications, 

Ulysses, Kansas—way back east. 

Ms. MOYER. Central Kansas. 

STATEMENT OF CATHERINE MOYER, GENERAL MANAGER, 

PIONEER COMMUNICATIONS, ULYSSES, KANSAS, ON BEHALF 

OF THE NTCA–THE RURAL BROADBAND ASSOCIATION 

Ms. MOYER. Chairman Roberts and Ranking member Stabenow, 

thank you very much for the invitation to speak about rural telecommunications and the 2018 farm bill. I am Catherine Moyer 

from Ulysses. I am speaking today on behalf of Pioneer, as well as 

NTCA–The Rural Broadband Association. Pioneer is headquartered 

in Ulysses, Kansas. We have about 113 employees, and we serve 

5,000 square miles. For those comparing, it is about the size of 

Connecticut, with about 3 million fewer people. We provide about 

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21,000 total connections—that is to wireline phone, to broadband, 

and to video services—over a network that utilizes a mix of fiber 

as well as copper and co-ax. On average, we have about two customers per square mile. 

To better understand our service territory as well as the subjects 

covered in-depth in my written testimony that I will highlight, it 

is really important to understand what our service territory looks 

like. Of our 5,000 square miles, only 15 square miles can be considered populated areas, which really leads to about 81 percent of our 

customers living in those 15 square miles. The remaining 19 percent of our customers live in the other 4,985 square miles, and they 

utilize roughly 86 percent of our network. So we are rural, and we 

have to serve everybody because, by legal obligation, we are a provider of last resort. So the challenges of distance and density hit 

very close to home. 

Our broadband networks are critical for the communities that we 

serve to overcome these distance and density concerns. Our networks allow ag producers and other rural businesses to communicate with suppliers and sell to new markets. They enable education of our children on par with opportunities in urban America, 

and they make our communities places in which people want to 

place business and they want to relocate there and remain there. 

In rural America, that translates to economic development that 

produces jobs and a vibrant rural economy. 

While the link between what rural telecom providers like Pioneer 

do and the witnesses you have already heard from, what might not 

be so obvious is why I am here talking about the 2018 farm bill. 

Access to capital for rural broadband projects is limited. Companies 

like Pioneer have few options to finance network construction. It 

takes a mix of private capital as well as financing from a few committed, mission-driven lenders like RUS, CoBank, and RTFC to enable us to build networks that we use to serve our communities. 

Pioneer is a company that has borrowed from both our U.S. and 

CoBank, and I currently sit on the CoBank board of directors. I can 

vouch for the small committed universe of capital that is essential 

to our industry. 

It is imperative to continue to provide RUS with the resources 

that it needs to lend in support of rural broadband deployment. As 

Congress continues to grapple with where to best direct scarce resources, it is important to note that the RUS broadband loan programs make loans that must be paid back with interest—creating 

a win-win situation for rural broadband consumers and the American taxpayers. 

We urge the Committee to continue to support the RUS 

broadband loan programs at or above current funding levels as you 

work through the farm bill reauthorization process. These programs are so vital to the ongoing deployment and maintenance of 

advanced communications infrastructure throughout rural America. 

Working hand in hand with these programs is the Federal Universal Service Fund. USF ensures that reasonably comparable 

services are available in rural America at a comparable rate to 

those in urban America. USF promotes both availability and affordability. We continue to work with the Federal Communications 

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Commission and urge the FCC to address the lack of sufficient 

USF funding for the goal of ubiquitous broadband availability. 

As part of a company that is deploying broadband to a very 

rural, hard-to-serve part of the U.S., I know these things to be 

true: The sustainability of our part of southwest Kansas is dependent on a broadband network that can move more and more data. 

Farms, the energy sector, and small businesses rely on our networks to make themselves more efficient and successful. Access to 

capital and a predictable USF program are paramount to deploying 

these vital networks. 

I believe Congress and the FCC share my aspiration of contributing to rural America’s success, and I look forward to working together to achieve that success. 

Thank you very much, and I look forward to any questions that 

you may have for me. 

[The prepared statement of Ms. Moyer can be found on page 109 

in the appendix.] 

Chairman ROBERTS. Thank you. 

Kathleen O’Brien, representing Kansas Electric Cooperatives, 

please. 

STATEMENT OF KATHLEEN O’BRIEN, GENERAL MANAGER, 

NEMAHA–MARSHALL ELECTRIC COOPERATIVE, AXTELL, 

KANSAS 

Ms. O’BRIEN. Thank you—do you want to say something else? 

Chairman ROBERTS. No. [Laughter.] 

Ms. O’Brien. All right. Thank you, Chairman Roberts and Ranking Member Stabenow, for inviting me to testify. My name is Kathy 

O’Brien. I am the general manager of Nemaha-Marshall Electric 

Cooperative in Axtell, Kansas. While the first business priority of 

electric co-ops is to deliver reliable, affordable electricity to our 

members, our purpose is much greater than that. We are the engines that drive economic opportunity across much of rural America and improve the lives of our members. That is why the farm 

bill is essential for co-ops, for Kansas, and for the country. It contains important rural development tools that support our efforts to 

strengthen our communities. 

Since 1936, loans from the REA, now called the ‘‘Rural Utilities 

Service,’’ have helped build, expand, and improve the infrastructure necessary to provide power, deliver clean water, and other necessities across rural America. It has been the most successful public-private infrastructure investment program in the history of the 

country. RUS loans help electric co-ops reduce costs and improve 

reliability for our members by financing basic maintenance like replacing poles and wires. But it also helps us fund projects to make 

our systems more modern, efficient, and secure. 

In just the last decade, RUS loans have helped my own co-op 

move from a system where co-ops read their own meters and paid 

their own bills based on a rate chart to a more technologically advanced, cost-effective system that allows us to read meters remotely and allows members to monitor their own electric usage. 

We have historically enjoyed strong support for robust funding 

for RUS, in large part because we are such a good investment for 

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the Federal Government. We ask that you help maintain that support. 

We have also appreciated working with the Committee over the 

years to help make the RUS more streamlined and efficient, and 

we look forward to exploring new ways to continue to improve the 

program. 

In addition to investing in the electric cooperative network, the 

fees paid on RUS loans are used to fund rural economic development loans and grants. Five years ago when I was here, I gave an 

example of how these zero interest loans helped finance an expansion of Koch and Company—pronounced ‘‘cook’’ in northeast Kansas, ‘‘coke’’ in Wichita—a cabinet maker in my home town of Seneca, Kansas. I am pleased to say that original $450,000 investment 

continues to yield a great return. They have more than doubled 

their payroll since 2011 and now employ around 650 people in several States. Electric cooperatives continue to enjoy a productive 

partnership with the Federal Government and with the communities we serve to promote the health of rural America. 

We look forward to continuing to work with you toward that important goal, and I am happy to answer any of your questions. 

[The prepared statement of Ms. O’Brien can be found on page 

122 in the appendix.] 

Chairman ROBERTS. Thank you, ma’am. 

Derek Peine, chairman of the board, Renew Kansas, Oakley, 

Kansas. 

STATEMENT OF DEREK PEINE, CHAIRMAN, RENEW KANSAS, 

AND CHIEF EXECUTIVE OFFICER, WESTERN PLAINS ENERGY, LLC, OAKLEY, KANSAS 

Mr. PEINE. Thank you, Chairman Roberts, Ranking Member Stabenow, for providing me the opportunity to be with you here today. 

My name is Derek Peine, and I am here today representing Renew 

Kansas, our State trade association that represents the 12 independent ethanol production facilities in Kansas and those who provide services to our industry. I currently serve as the chairman of 

the Renew Kansas board, and I am also the CEO of Western Plains 

Energy, a mid-sized ethanol plant located in northwest Kansas. 

Let me start by sharing a key point about the ethanol industry. 

Western Plains Energy, like most ethanol plants today, was founded with two simple goals in mind. First, ethanol was a chance to 

provide additional demand for local crops to increase grain values. 

Second, it was an opportunity to provide much-needed jobs and economic value to our rural communities. Today, the 12 plants in Kansas do just that. We produce over half a billion gallons of ethanol 

annually, and we create a local stable market for approximately 

200 million bushels of Kansas-grown corn and sorghum. Each of 

these plants is located in a rural area, and we provide more than 

380 direct jobs spread across the State. 

Over the last 10 to 12 years, the ethanol industry has been the 

predominant outlet to absorb the ever-increasing corn and sorghum 

production volumes. Today more than a third of those grains grown 

across the U.S. is converted into biofuel. However, we are now 

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42 

pacing demand, and the farm economy is struggling due to oversupply and depressed pricing. 

The good news is that the ethanol industry can help to absorb 

those increased volumes. We are working hard to increase the demand for our products and simultaneously invest in innovation and 

improvements to increase our own production capacity. 

As an industry, we are starting to grow domestic demand by developing markets for E15, a mixture of 15 percent ethanol and 85 

percent gasoline. We have worked successfully with the privately 

funded Prime the Pump Program and USDA’s Biofuel Infrastructure Program to provide consumers with a choice to purchase E15 

fuel. 

We have also focused on increasing product demand internationally, and the USDA Foreign Ag Service trade promotion has been 

a key component to ensuring we can expand those export markets. 

The ethanol industry can provide additional support to the farm 

sector by providing an outlet for the increased grain supplies, but 

we need your help. As Committee members and policymakers, we 

need your leadership and advocacy for policies supportive of renewable fuels, including those not related to the farm bill. 

My written testimony provides more specific details, but in short, 

we need your support to help us open free market access for consumers to purchase cleaner, cheaper, and better E15 fuel. We need 

to continue to advocate for fair trade with our international partners with countries such as China. Finally, we need support to not 

change the Renewable Fuel Standard. While this policy is not related to the farm bill, it is the integral component to the success 

of farmers here in Kansas and America. 

I want to close by thanking you for allowing me the opportunity 

to testify here today. We are proud of the work that America’s ethanol industry does to help the American farmers and ranchers succeed. Thank you. 

[The prepared statement of Mr. Peine can be found on page 130 

in the appendix.] 

Chairman ROBERTS. Thank you, Derek. 

We have now Mr. Greg Ruehle, president and CEO, Servi-Tech, 

Inc., in Dodge City, Kansas. 

STATEMENT OF GREG RUEHLE, PRESIDENT AND CHIEF EXECUTIVE OFFICER, SERVI–TECH LABORATORIES, DODGE CITY, 

KANSAS, ON BEHALF OF THE KANSAS COOPERATIVE COUNCIL 

Mr. RUEHLE. Mr. Chairman and Senator Stabenow, thank you 

for the opportunity. Let me join the chorus of folks who have recognized your commitment to kick off the field hearings on the 2018 

farm bill here in Kansas. 

I am here today representing the Kansas Cooperative Council, of 

which we are a member, and I will talk about that a little bit before I get into the statement. Servi-Tech is a federated cooperative, 

and, Senator Stabenow, I really appreciate your reference to the 

Capper-Volstead Act. Obviously, those of us who represent the cooperative community know well and appreciate the value of that 

act and the opportunity for us to do business. 

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As a federated co-op, we are owned by 63 other cooperatives, so 

we may be kind of the unicorn up here at the table, and we really 

appreciate and value that cooperative model, and we are always 

happy to speak to that. 

The Kansas Cooperative Council, though, has a broad base of 

membership. Lots of them are represented up here at the table, 

and I want to be careful not to repeat testimony that has come 

from them, whether it is in electricity or telecommunications, lending, et cetera, but focus in on really two areas that the Co-Op 

Council has a tremendous interest in. 

The first is the Working Lands Programs, and I appreciated that 

dialogue in the first panel around how to make those programs better. There were some good references both around EQIP and 

around CSP and the CREP program. 

One of the things I think we are undervaluing, though, is the 

level of technology that has evolved around conservation tillage, so 

no-till, limited tillage, vertical tillage, all of those practices are increasing in their application on acres today. Their ability to help 

hold that soil in place is valuable to us, and I think it allows us 

then to look at those working programs with maybe a different perspective in the 2018 farm bill, and that is to really focus the dollars 

on the acres where the impact can be the greatest. 

Those other acres, we are going to need to feed a growing global 

population. We are going to need those acres in production growing 

row crops. Whether that is a crop of corn under irrigation or a crop 

of sorghum in a dryland situation, those are important crops to us 

from a domestic and international standpoint. So the council would 

strongly encourage the Committee to give a hard look at those programs to make sure that they are relevant to the level of technology that is available in agriculture today. The role that farmers 

and ranchers play in conservation is significant, and we do not 

need a Federal farm policy that ties one of their hands behind their 

backs. So in that vein, we would be happy to work with the Committee as the debate goes forward. 

The other area is the area of credit, and you heard a lot about 

that in the first panel as well, the role and then the need for credit 

that we have today in a growing global agricultural environment. 

At Servi-Tech, we utilize both Farm Credit Service lending and private lending. It is important for us to have those opportunities and 

to be able to tap into both of those markets. So we will just continue to make sure that we encourage those programs being in 

place. Strong support for crop insurance as we go through the debate in the 2018 farm bill. 

With that, I would wrap it up, and I would let the folks in the 

audience know that the screens up here start at 3 minutes and 

they go to zero, and then it turns red, and I am waiting to see if 

lasers or something shoot out of that if you go too long. So I do not 

want to make the lasers come out, so with that, Mr. Chairman, I 

will wrap up my remarks, and I would be happy to answer questions. 

[The prepared statement of Mr. Ruehle can be found on page 139 

in the appendix.] 

Chairman ROBERTS. Well, whether or not there are lasers is 

highly classified. 

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[Laughter.] 

Chairman ROBERTS. But I think the worst you could expect is 

[tapping] from me, and also from the distinguished Ranking Member. I have not done that because every one of you has tried to stay 

within the 3 minutes, plus the fact every one of you has given us 

very valuable information. So when that turns red, well, take a 

chance and keep going. 

[Laughter.] 

Chairman ROBERTS. Mr. Clay Scott of the Kansas Water Congress, from Ulysses, Kansas. 

STATEMENT OF CLAY SCOTT, KANSAS WATER CONGRESS, 

ULYSSES, KANSAS 

Mr. SCOTT. Ranking Member Stabenow, welcome to Kansas. 

Chairman Roberts, welcome home. Thank you for holding this 

hearing today and for your attention to the many issues facing 

rural America and our Nation. The farm bill is one of the most important pieces of legislation the Congress will consider over the 

next few years, and this legislation—and its effects on water infrastructure—helps ensure our Nation has a diverse, safe, reliable, 

and affordable supply of food. 

My name is Clay Scott, and in addition to farming and ranching, 

I am actively involved in water, presently serving as a delegate to 

the Kansas Water Congress, a member of the National Water Resources Association, and a current board member of our local 

Southwest Kansas Groundwater Management District, as well as 

other local and regional groups working on water conservation. 

The NWRA and Kansas Water Congress members provide water 

to millions of individuals, families, and agricultural producers 

through local, State, and national water projects that support our 

communities, the economy, and the environment. The connection 

between agriculture and water is clear and of great importance. As 

a reliable supply of clean water is key to providing healthy, highquality, and inexpensive foods that our families enjoy, the extent 

of this was greatly challenged during the recent drought in Kansas, 

and much of the Nation was put under real challenges, especially 

in our industry, which spurred further review and focus to conserve 

and extend our resources and implement new technologies and 

practices for greater efficiency and higher-value uses. It also revealed the irreplaceable value of water infrastructure and the need 

to maintain and improve its management. Properly done, we are 

able to provide water for our cities, farms, and livestock and 

affordably transport our grains and fertilizers while capturing flood 

flows and resupplying depleted reserves. 

As this new farm bill is written and implemented, our Nation’s 

water infrastructure systems, which carry the fuel, fertilizer, and 

grains throughout the heartland and supply water for drinking and 

irrigation across the West, are aging past their projected life spans. 

The adequate care and updating of our water management systems 

remains key, not just for food production but for power generation, 

manufacturing, health, and safety. 

As ranches and farms and cities look to the future, a secure supply of water is critical to further development and adoption of new 

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technology. Water conservation and generating real opportunities 

for our next generation fall right in line with this. 

As many individuals, groups, and organizations here are working 

hard to improve the livelihood of agriculture in Kansas and the 

United States, and from my local water board and the Kansas 

Water Congress, who represent many of my neighbors and much 

of Kansas, to State and national organizations such as the National 

Water Resources Association, we appreciate your time and consideration of our testimony and hope you will utilize their expertise 

when needed. The new farm bill must change from the era of the 

past and focus on the needs and vision of the future of agriculture, 

and while placing a strong commitment on water infrastructure. 

Thank you for your time. 

[The prepared statement of Mr. Scott can be found on page 144 

in the appendix.] 

Chairman ROBERTS. Thank you. 

Cherise, thank you so much for coming, and thank you for putting up with Ken Strobel all those years. Thank you for taking 

over, and it is good to see you here. 

STATEMENT OF CHERISE TIEBEN, CITY MANAGER, DODGE 

CITY, KANSAS 

Ms. TIEBEN. I am pretty confident I can be shorter than Ken. 

[Laughter.] 

Ms. TIEBEN. Mr. Chairman and Ranking Member Stabenow, welcome to Kansas. I am Cherise Tieben, city manager of Dodge City, 

Kansas, the proud home community of Senator Pat Roberts that is 

now recognized as rural. Thank you for allowing my testimony 

about a rural housing challenge with a positive outcome as a result 

of your successes in the last farm bill. 

In 2008, community leaders recognized a significant housing 

shortage, and a housing study was commissioned to find out why 

the lack of quality affordable housing did not exist in Dodge City— 

or existed in Dodge City, why people were living in unlivable conditions and paying dearly to do so, why the housing limitations were 

posing barriers to recruiting, retaining, and expanding the local 

workforce, and why employers were housing new recruits in hotels 

and the individuals would leave the community after 6 months because they could not find affordable housing. 

The housing study indicated that we needed to build 568 singlefamily homes and 379 multi-family homes varying in price ranges 

in a period of 5 years. We had built 64 units in the previous 5 

years. So the task did seem rather monumental. 

The housing assessment highlighted the serious lack of inventory 

for starter homes for first-time home buyers. We had 44 homes on 

the market and should have had 140. We needed owners to graduate up in the market to make homes available for those desiring 

to enter the ownership world. We addressed that locally with new 

developments. However, the increasingly conservative nature of 

banks and the lack of available stock were obviously problematic, 

especially for our young families looking to purchase their first 

homes. 

The study revealed that USDA rural development programs were 

available in Ford County but not in Dodge City, forcing individuals 

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needing assistance to buy or build outside of the city limits, which 

were stretching our abilities to provide service. 

We brought this to the attention of Senator Roberts, who successfully went to work on our behalf to increase the population limits. 

Since May of 2014, the effective date of the population expansion, 

Dodge City alone has had 94 USDA-guaranteed loans issued totaling $9.9 million in investment. 

There are four southwest—wait, it is eastern Kansas, right?— 

four southwest Kansas communities of like size, and we have all 

had similar successes utilizing USDA rural development. Businesses are now being retained and recruited to our communities 

and regions due to the population changes in the last farm bill. For 

that, we thank you, Senator Roberts, for being our champion, and 

to you, Senator Stabenow, for the hard work. The rewards can easily be seen in southwest Kansas. 

Thank you for the opportunity to testify, and I am pleased to answer any questions. 

[The prepared statement of Ms. Tieben can be found on page 167 

in the appendix.] 

Chairman ROBERTS. Thank you, Cherise. 

Senator Stabenow, I have two or three here, and then I will recognize you. Then we are going to wrap it up. 

Thank you all for coming and taking time out of your valuable 

schedule to share your testimony with us. Clay, your testimony 

touches on an issue that is terribly important to Kansas farmers, 

particularly those out in the western part of our State where the 

Ogallala has been. There used to be as much water in the Ogallala 

as one of the Great Lakes, and now that is just not the case. Water 

is the lifeline for agriculture. What policy changes should Congress 

consider as it reviews USDA conservation programs—I do not want 

Federal water management. We can do that ourselves, thank you 

very much. But what policy changes should Congress consider as 

it reviews USDA conservation programs to further incentivize the 

efficient use of water while also supporting agricultural production? 

Mr. SCOTT. Thank you. I think one of the most beneficial programs we have seen at times has been the EQIP program, especially in times of drought when conservation is needed the worst. 

It enables farmers who are already suffering from the effects of a 

drought to utilize programs that, even though it is probably pretty 

dire financial times, they are able to go ahead and make those adjustments and changes. 

Another aspect of that is there is a lot of conservation being done 

over the aquifer right now, regardless of whether or not it is 

through a Federal program or not. I think in the great majority of 

southwest Kansas over the aquifer, that new production was shut 

down in the early 1990s for new appropriations and at the direction of local farmers and water users. 

We are making steps forward to continue to reserve that while 

improving the economy. Around Ulysses, we are in the heart of the 

dairy boom, and with the new plant in Garden City of Dairy Farmers of America, several hundred million dollars’ worth of investment there, we continue to see that expansion. I see a lot of it done 

without the Federal assistance side, just from real hard work. 

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The EQIP program, though, has its values, and especially just in 

this last year, I participated in a Conservation Innovation Grant 

with the Dragon-Line, as it is called by commercial standards, the 

vertical drip lines for sprinklers. That is an outstanding product. 

It saves water, it maintains the yields, and it preserves and extends the aquifer. 

Chairman ROBERTS. Thank you for that. In visiting the Nation 

of Israel, which used to be a water importer and food importer, 

they are a food exporter and a water exporter now. They have wave 

energy. They have evapotranspiration. They have conservation on 

the water that they use constantly and then run it through a process. It is not potable water, but it certainly can be used on crops. 

They discovered wells. It is just an amazing thing. 

But one of the things they really use is drip irrigation, and not 

with pipes but with a plastic that is a new kind of plastic that is 

just rather amazing. I am very hopeful that K–State and the person that I met that really was the godfather of this effort, who I 

said he ought to come and visit K–State, and I am still trying to 

get that worked out. But I was a little stunned by the progress that 

they made, and a lot of it was like southwest Kansas when they 

started out. I think they are about 5 to 10 years ahead of us. I 

know that we have a lot of investment with regards to circle irrigation, a very expensive thing to do, but also if you do not do that, 

why, you are not in irrigated farming. I would hope we could encourage people to take a look at that drip irrigation, which I think 

is what you have been talking about. Thank you for that. I think 

this is one of the biggest problems that we face out in our country. 

Greg, in your testimony you highlight support for the Rural Economic Development and Loan Grant program. It is important to 

link cooperatives with their local communities to spur economic development. Could you provide an example of how these programs 

impact not only businesses like yours but the rural communities 

they serve as well? 

Mr. RUEHLE. Certainly. I am going to go back and play off of 

Cherise’s point a minute ago. With our headquarters in Dodge City 

and the growth that we see in our company from a staffing standpoint, a great challenge was to be able to entice people to move to 

southwest Kansas when there was not affordability housing available to them. I am one of those. Our family just moved to southwest Kansas about 2–1/2 years ago—or a year and a half ago, and 

we are one of the folks who benefits from the fact that there were 

rural housing funds available to develop an area of the city. Builders have come in. They build homes there now. They are priced in 

all different price ranges, which fits the population of Dodge City 

very well. So that is one of the areas. 

I think the other is—and this is partially federally funded. I do 

not know that it falls under as directly as maybe your question requested, Senator, but it plays back in Mr. Scott’s reference to some 

technology on pivots that allows us to more efficiently utilize limited water resources in an irrigated agricultural environment. Now, 

whether that is a line that drags on the ground and emits close to 

the ground, you lose that evapotranspiration loss, whether it is the 

drip tape that you mentioned a minute ago, the ability to fund 

those through either Federal funds or through the groundwater 

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management districts, which there is a lot of that work being done 

in the groundwater management districts in western Kansas, need 

the kind of support that I think you are speaking of here, and it 

is going to take a partnership of Federal funds and local funds and 

private funds, frankly, to be able to make that happen. 

Drip tape installation can cost several thousand dollars an acre, 

and with commodity prices at the point that they are, it is tough 

to make that work without a concerted Federal, local, and State 

partnership. 

Chairman ROBERTS. I appreciate that. 

Catherine, 2 years ago, we held a high-tech precision agriculture 

event in Gypsum with K–State’s Polytechnic campus, a number of 

our Kansas equipment manufacturers and producers. They even 

got me to fly a UAV capable of producing high-resolution images, 

measuring a number of variables such as plant health, the presence of pests, weeds, and so on. Can you talk about the role our 

rural providers play in supporting these advancements in precision 

agriculture? It was not that hard. I just took control, it went this 

way, it went that way, this way, that way. We can do that. 

[Laughter.] 

Chairman ROBERTS. I do not know what the hell we are going 

to do with it in Washington, but at any rate, what got me was— 

I mentioned to somebody there, I said, ‘‘What about the farmer who 

goes in his pickup with his dog every day just to check the low 

point in his ground?’’ I do not want those days—I mean, what are 

you going to do if you cannot do that? But at any rate, please answer the question if you can sort of discern what I have been trying 

to say. 

[Laughter.] 

Ms. MOYER. Well, first I would suggest you do not fly a drone in 

Washington. That probably leads to trouble. But I think UAVs or 

drones allow our farmers to have a really unique look at their 

farmland and their cattle operations. The data that they are going 

to gather, they are going to be held on board or be transmitted to 

a viewing device via radio transmission. So I think the question is 

really what you do with that data once you have gathered it, and 

that really is bringing it back to your office, your desktop, your 

computer, downloading it, and then combining it with other forms 

of precision ag. 

I talk to the farmers in our service territory, and they use it for 

looking at water application and seed application, fertilizer application and soil, and take all of those things together, and it is the 

big data analytic piece of it, I think, that is the most important. 

Now, the question, I think, that really goes to my wheelhouse is: 

How do you move that data? Because they are going to move it 

from farm to farm or within the farm, but they are also going to 

move it to seed companies and fertilizer companies to ask for help 

to discern what this data looks like. 

So we are in a very unique position to supply those pieces, the 

broadband, the high-speed broadband data connections, the transit 

to those seed and fertilizer companies, as well as the cloud storage 

that you need to aggregate it all to read it. I think that is where 

we work hand in hand with agriculture. You know, I think that’s 

the piece that really makes our farmers much more efficient, and 

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in today’s world, especially with input prices going up and the low 

commodity prices, that efficiency piece, and then how to best make 

your farm efficient and then productive is the key piece, and that 

is really where I think we step in to form that partnership and look 

forward to continuing that. 

Chairman ROBERTS. I appreciate that very much, and I enjoyed 

that experience very much. 

Kathy, in your testimony you highlight some regulatory decisions 

made during the last administration, specifically the Waters of the 

US. Staff is going to really get upset with this, but we had Gina 

McCarthy and we had 11 Senators. The bill was two pages, Deborah, and in that, it said normal farming operations are exempt. Do 

you remember that? 

Senator STABENOW. I do. 

Chairman ROBERTS. Yeah. Then there was 88 pages of regulations in about 10 point font. I mean, you really had to get a magnifying glass to figure out what was going on. No lawyer of any farm 

organization or commodity group or anybody could figure out where 

we were with regards to WOTUS. Now, of course, that is in the 

courts. We do not have a CRA on it, which is what I said before, 

but that is not accurate because it has to work through the courts. 

Then we have the lesser prairie chicken. Everybody knows about 

the lesser prairie chicken. Did you know that when Mother Nature 

came to our rescue and it rained, the habitat for the lesser prairie 

chicken increases? Then the lesser prairie chicken comes back. 

Then he or she becomes the greater lesser prairie chicken. 

[Laughter.] 

Chairman ROBERTS. I tried to convince the EPA of that, or the 

Department of Interior, and I could not get to first base. Now, that 

is just crazy. Then I want to know who is really counting the lesser 

prairie chickens. We even had a situation where you could not have 

an oil rig on your land because the—I cannot remember which falcon it was, but it was a very mean falcon because it would go after 

the prairie chicken. So you could not have an oil rig on your land 

if it is working. They did not know that that particular falcon was 

slower than the lesser prairie chicken, who is a pretty fast lesser 

prairie chicken. I mean, that is why they call it the lesser prairie 

chicken. 

So I understand that our Nation’s electric co-ops have concerns 

regarding the Clean Power Plan. Have you or any other co-ops 

been able to produce any real-world numbers, whether that could 

be an economic impact or the reliability impacts in rural America? 

Give me some hope here. 

Ms. O’BRIEN. Well, I am not quite an expert on the Waters of the 

US, but for the Clean Power Plan and addressing the lesser prairie 

chicken, I do not have specific numbers because primarily the local 

impacts in Kansas may differ from what may impact the Nation. 

But whatever the impact, even a small increase would impact the 

farmers. Just as the farmers in the previous panel strive to be good 

stewards of the land, electric cooperatives understand the importance of being good stewards of the environment. Even so, co-ops 

across the country want to be part of a solution to the Clean Power 

Plan. 

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Initial measures taken to meet the mandates, because we 

thought it was going to progress, have already increased our wholesale power costs and in turn have increased the electric bills on the 

farmers you just heard from on the previous panel. While we cannot predict the negative economic or reliability impact of the Clean 

Power Plan, we in Kansas have already seen the lack of economic 

development because of the lesser prairie chicken and the increased costs associated with protecting the species. Electric co-ops 

have even had to recommend to people who run electric power that 

they might have to bury lines, and the cost is just so prohibitive. 

We are happy that these rules are on hold, and we think we have 

a lot to offer in the conversation going forward on the Clean Power 

Plan. The lesser prairie chicken, too, we in northeast Kansas do not 

have the lesser prairie chicken, but we are sympathetic to the 

issues that our friends in southwest Kansas—or eastern Kansas, 

whichever—are having because we do not know what the next species might be. So we certainly have an interest in that. 

Chairman ROBERTS. I appreciate that. 

Senator Stabenow. 

Senator STABENOW. Well, thank you, Mr. Chairman, and thank 

you to each of you. You really reflect the breadth of issues involved 

in what we call the farm bill, which is really the economic development plan for small towns in rural America, as well as food policy 

for everybody. I very much appreciate all of the things that you are 

involved in. 

When we look at rural development, as an example, this is really 

about quality of life. When I think about growing up in a small 

town in northern Michigan, one of the real concerns has always 

been when we go off to college, who will come home, and start the 

business and go back to the farm and be in the community? Will 

there be a rural hospital? Will there be doctors? Will there be the 

ability to have a business? Will there be broadband? All of those 

things that allow people to live and stay in small towns. 

So because I think broadband is so important, I wondered, Ms. 

Moyer, if you might just expand a little bit on some of the challenges around broadband infrastructure. I have an ongoing small 

business tour in Michigan and I stop in small towns. Inevitably I 

hear about the fact that somebody has started or wants to start a 

small business, and they want to sell, they want to export, they 

want to stay in their small town but still have access to the world. 

Broadband is incredibly important to making that happen. 

Telemedicine is also a very big deal. We have a lot of rural hospitals in Michigan and across the country. The ability of the University of Michigan Hospital or Michigan State or the other major 

hospitals to connect and partner with each other, as well as to connect with people in their home through telemedicine is so important. 

So when you look at the challenges, to me this is an incredibly 

important piece that touches so much in terms of creating quality 

of life and economic development and so on. Is it technical assistance? Is still just an issue of capital? Is it both? I mean, what really needs to be done so that we are providing those opportunities in 

small towns? 

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Ms. MOYER. I think you have highlighted exactly why we need 

it, whether it is telemedicine or attracting and retaining businesses 

and encouraging people to come back once they have graduated 

from high school, gone to college, and let us bring them back. 

I think personally speaking, from the Kansas provider perspective, it really still comes down to capital. It is access to capital, but 

then also a way to pay back the capital that you borrowed. It is 

not an easy business plan to make, especially when you talk about 

extremely sparse population in our service territories. When you 

talk about, as I said having 19 percent of our customers living 

across over 4,900 miles, you cannot make that business plan with 

an expectation that only they pay for the entire transport network. 

That is where we go hand in hand with universal service, and it 

really falls under the purview of the Federal Communications Commission as well as Congress. But those two pieces go hand in hand. 

It is the ability to actually access capital and have a predictable 

and sufficient universal service program that will put some of that 

money back into those areas. 

I do want to highlight here that the universal service program 

is not—they do not hand out money to people; rather, we borrow 

the money, we spend it, and a couple of years later, we start to get 

some money back from the universal service program but also from 

our end-user customer. So those are the pieces, I think, that are 

so important to building a robust broadband network throughout 

rural America. 

Senator STABENOW. Well, I hope that we are going to be able to 

help with that, not just through the farm bill but through other 

mechanisms as well, because I think it is absolutely critical and 

touches the complete quality of life in rural America. 

Mr. Peine, I cannot let you go without talking about the importance of the Renewable Fuel Standard, and it certainly is something that impacts us in Michigan as well as Kansas and across 

the country. I have to say, as somebody who is a big NASCAR supporter, we do two big races in Michigan every year. Mr. Chairman, 

you are welcome to come. We would love to have you. They drive 

E15. 

Mr. PEINE. Correct. 

Senator STABENOW. Right? That is all they drive is E15. So, if 

you want a faster car, that is what you want to drive. 

I wonder if you might speak a little bit more about the Biofuels 

Infrastructure Program. There are a lot of opportunities in the biobased economy, and one of the things that was important to me 

was to have a funded Energy Title in the farm bill. We have had 

Energy Titles before, but they have not had any money in them, 

or just authorizations, and we actually put dollars in there for not 

just biofuels infrastructure and energy efficiency, which is really 

important, but the bio-based economy. Before you answer, let me 

just say I will do a commercial for Michigan. We are doing a lot 

of work around bio-based economy, as you know, in materials, with 

corn-based or wheat-based, soy-based materials and so on as materials and products—clothing and soaps. One of the things that we 

do now is seats of cars, and this is not made with corn, but with 

soy. I am sure it is in a lot of vehicles, but I know right now if you 

buy a Ford vehicle, for instance, you get a new F–150 truck, you 

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52 

are sitting on soy-based foam in the seats. There is soybean in the 

seats, so if you get hungry, you have got something you can chomp 

on while you are driving along. 

But I raise that only because—and I know I can go on about 

corn-based products the same way—corn in the automobile, is used 

in the plastic cup holders and the dashboard, and you can do all 

kinds of things with it. But when we look at jobs and bringing together agriculture and manufacturing, I think there is a lot of opportunity in what we call the bio-based economy that is really exciting, and I wonder if you might just speak about what you see 

in that area. 

Mr. PEINE. Sure. Thank you for the question. Your first comment 

was about the Renewable Fuel Standard, and the RFS is really the 

bedrock that has helped launch the ethanol industry that is based 

on corn and sorghum today. But the broader industry is really 

about bio-based technology. As the ethanol industry has expanded, 

one of the things I see happening today is that bio-based economy 

is starting to peak out a little bit. We are starting to see ethanol 

companies that have learned how to run a biotechnology refinery 

start to look at new technologies, whether that is converting their 

existing plant to a new biotechnology end product or putting on 

Bolt On technologies that could supplement with their ethanol 

plant. 

Once you take the starch from the grain into sugar, your opportunity to turn that into lots of new materials beyond just ethanol 

becomes wide open. But the challenge is always around economics 

and the incentives to have people invest their money with surety 

that the Government will stand behind them. The Renewable Fuel 

Standard is a great example. It has helped blossom the industry, 

but as time has gone on, there has been pushback regarding repealing and reforming the Renewable Fuel Standard. 

The challenge to our company and to investors around the country is if there is no confidence or if the confidence is shaken that 

the Renewable Fuel Standard could change or be eliminated, you 

are more resistant to put in that capital. You are more resistant 

to go down the road of a new biotechnology product. 

Senator STABENOW. Mr. Chairman, I have a lot more questions, 

but I know we are coming to the end of the afternoon, so thank you 

to all of you. I did want to just say, Mr. Scott, I appreciate your 

work in bringing agriculture’s voice to the Kansas Water Congress. 

Coming from a State surrounded by water—we have 20 percent of 

the world’s fresh water all around Michigan—we like to say we are 

the ocean without the salt or the sharks. So we welcome everyone 

to come and have a chance to see that beauty. But I did appreciate 

the fact that you talked about a Conservation Innovation Grant, 

which was something that we had added to the conservation portfolio in the last farm bill, and so I was very interested in your 

using that as well. 

Thank you very much, Mr. Chairman. 

Chairman ROBERTS. Thank you, Senator. 

Shan, come back once again. I am worried about and I know the 

Senator from Michigan is worried about and everybody on the Ag 

Committee is worried about forbearance, and Banking Committees 

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53 

as well in the Congress, and Farm Credit for struggling farmers 

with the tough times, with the tough patch that we are in. 

I certainly do not want to ever again see the days where regulators would pull up black vehicles in front of the community bank 

and come in and want to look at your loan portfolio, which was performing. It was performing, but it did not meet some conscription 

or some yardstick that somebody had come up with and said you 

had to have X here or X there or Y here. Those were tough days. 

We lost a lot of folks. That was tragic. 

So can you tell me some of the ways that our Kansas bankers 

are working with customers and young and beginning farmers to 

ensure producers in our rural communities are able to weather the 

current economic storm? Where do you see forbearance coming? Or 

will there be forbearance from the regulators? Or have you seen 

the regulators yet? Well, I know you always see the regulators. 

[Laughter.] 

Mr. HANES. I really do not want to see the black cars pull up either, frankly. 

Chairman ROBERTS. Yes. 

Mr. HANES. Obviously, that is mission critical right now. We are 

in the middle of our renewal season. We are trying to get operating 

funds secured for everyone. Typically, as you would know, when 

prices go through the low cycles, we can typically use real estate 

to restructure lower payments, ease up the cash flow, that sort of 

thing. The challenge, I am afraid this time, is we are also looking 

at a time where rates are going to start moving up instead of down, 

and so that is actually going to make that much more of a challenge moving forward. But we can still use that because there is 

good equity in the land. When prices were good, a lot of banks increased loan margins, had a quicker repayment because the cash 

was there, and so we have got good equity in equipment and in real 

estate. 

When you get to the young and beginning farmers, however, typically they either do not have real estate to fall back on to restructure, or what they do have they have not had very long, and so 

there is not a lot of equity there to put cash, inject capital/cash 

back in the operation. So it becomes vitally important to educate 

the borrowers. They have to know their breakeven, their real 

breakeven of operating inputs, debt repayment, a real breakeven. 

I see a time now kind of going back to the mid-1990s where we 

may be marketing the entire year where the price of that particular commodity barely meets the breakeven, barely gets over it; 

and if it does, it is only going to be there for a very short period 

of time. So we have been very proactive in educating our borrowers 

so that they know what that breakeven is, and so they are in a position to act and respond and take advantage of that price when 

it does get there. So that is really what we are trying to do for our 

borrowers because that is the long-term projection. 

To that end, the last thing for the young and beginning farmer 

is Farm Service Agency and those guaranteed loans. That is a 

great source of comfort both to the bank and to the borrower. If 

they meet certain numbers and certain returns, we can get a 5- 

year guaranteed line of credit, and so that gives that borrower 

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54 

some assurance that, hey, as long as I meet this standard, I will 

be able to have my note renewed. 

The challenge is that what 20 years ago was a small young, beginning farmer and a $100,000 line of credit and $200,000 of equipment, that is not a beginning farmer. That is a hobby farmer now. 

So those loan limits we bump up in that 1.4 or 1.399 guaranteed 

limit rather quickly, even with a beginning farmer. So that is the 

challenge I see even for those guys. 

Chairman ROBERTS. Gena, we started with you. I think we are 

going to end with you. I had a question on crop insurance, but I 

would like you to maybe respond to the same question that I asked 

Shan. What is your take on this in terms of forbearance, where we 

are headed, ample farm credit, et cetera, et cetera? 

Ms. OTT. In my written testimony, we talked a little bit about 

different adjustments that producers could make. We encourage 

then to look at their fixed costs and those four R’s: to reamortize, 

if they have short real estate loans, to try to stretch them out to 

lower those payments through this lower cycle; refinance if they 

have got equipment debt and such, they may be able to restructure 

that and, again, lower the debt service on that, stretch it out some. 

We have talked about—I am going to forget my R’s as I go along 

here. We are going to reassess family living needs, our costs of 

doing that. We got perhaps comfortable at some level when profitability was in the industry, and sometimes we need to look at that 

and make sure that we are careful about that while the cycle is at 

the bottom. 

Forgive me on the spot here. The other thing we have done is 

added staff that is dedicated entirely to working with people that 

are in a tough situation. So they have more tools to rework some 

of the financing, help them understand their costs. We have talked 

a lot, too, about making sure they are marketing when they can, 

when the profit is there. Shan alluded to that. If they use their 

crop insurance guarantee, they are able to price at a time where 

they do not have the product on hand, but they can forward-price 

knowing that that guarantee—that the crop insurance is there so 

they can market a great percent of their production knowing that 

that is there to protect them when they have an opportunity to do 

so. 

Chairman ROBERTS. I put you on the spot. Well done. 

Thank you to all of our witnesses for joining us here in Manhattan, Kansas, America, the Little Apple. We appreciate you sharing 

your experiences and thoughts today, and thanks to those in the 

audience, those still remaining and those who have listened from 

around the country for your interest. 

A special thanks to my colleague and friend, Senator Stabenow. 

Welcome to Kansas. I look forward to going to Michigan. I think 

I look forward to going to Michigan. It is green and white, folks. 

It ain’t purple. 

Senator STABENOW. That is right. 

Chairman ROBERTS. As I said when I took the gavel 2 years ago, 

this Committee is the voice of the producer. This Committee will 

not only provide folks a platform to spread the word about the 

value of production agriculture, but also be the forum for our farmmw42035 on AGRINON012 with DISTILLER

55 

ers and ranchers and rural communities to participate in the shaping of our next farm bill. 

Today we started that process. We have heard about agriculture 

research, crop insurance, some of the other policies that are working well, and we have heard about the burdens of Government regulation and programs, and we need to raise more questions and 

craft solutions, including the ARC program. 

We will continue to listen to farmers and ranchers and other 

stakeholders at additional hearings in the countryside and in 

Washington. We will keep asking tough questions and reexamining 

programs to determine their effectiveness. 

We have less than 2 years to pass the next farm bill, and, yes, 

there will be another farm bill. But we have our work cut out for 

us. We need bold thinking, new ideas to address today’s challenges 

during these tough economic times. We must face the realities 

head-on. Our producers in their fields are being asked to do more 

with less, and we also have to be willing to find solutions that stay 

within our budget caps and trade rules. Yes, those trade rules. I 

hope we have trade rules. I hope we have trade opportunities. 

We will be crafting a bill that meets the needs of producers 

across the countryside, and if we embrace the attitude of our producers’ optimism and ingenuity, we can certainly get that done. 

To my fellow Committee members, I ask that any additional 

questions you may have for the record be submitted to the Committee clerk 5 business days from today or by 5:00 p.m. next Thursday, March 2nd. 

That concludes our hearing. The Committee is adjourned. Thank 

you all so much. 

[Whereupon, at 5:03 p.m., the Committee was adjourned.] 

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A P P E N D I X 

FEBRUARY 23, 2017 

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for 

from the Heartland: 

""'·<nr'f'h""" on the 2018 Fann Bill from Kansas 

Submitted to the 

United States Senate Committee on 

Senator Pat 

Submitted 

David Clawson 

Nutrition and 

Chair 

Kansas 

2017 

M:ml11attan, Kansas 
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David Clawson 

Englewood, Kansas 

Page 2 of5 

Mister Chairman and members of the committee, my name is David Clawson. 

and I reside ncar Englewood, Kansas, and are part of a family partnership that a 

commercial cow-calf operation and both dry land and irrigated fanning. We also are partners in a 

dairy and my tinnily's bank I am President of the Kansas Livestock Association (KLA) and 

serve on the Board of Directors ofthe National Cattlemen's Beef Association (NCBA), of which 

KLA is an affiliate. I am very pleased to be with yon today. 

KLA, fonned in 1894, is a trade association representing nearly 5,200 members on legislative 

and regulatory issues. KLA members are involved in many aspects of the livestock industry. 

including seedstock; cow-calf and stocker cattle production; cattle feeding; dairy production; 

swine production; grazing land management; and diversified fanning operations. 

The beef industry is a key segment of the Kansas economy and the Kansas beef industry is a 

major piece of the U.S. beef industry. Kansas ranks third nationally with 6.4 million cattle on 

ranches and in feedyards. Those cattle generated $8.8 billion in cash receipts in 2015. Kansas is a 

national leader in cattle feeding and The Kansas beef cow herd is the sixth 

largest in the country at !.57 million Kansas is home to a growing dairy industry, both in 

production and processing. Tn 2016, Kansas fanners produced more than 3.3 billion pounds 

of milk. Also, the presence of Kansas State the Animal Health Conidor and the 

proposed National Bio and Agro-Detensc Facility Kansas a world leader in animal health 

research. 

Development of the next fann bill is an important for livestock producers. Vihethcr 

directly or indirectly, the provisions included in limn bill can have a dramatic impact on 

livestock producers' businesses. We oppose agriculture policies that pit one industry group 

against another, distort market signals and inadvertently canse economic hann to the livestock 

sector. 

The vast majority of my fellow livestock producers believe the livestock industry is best served 

by the process of free enterprise and free trade. Even with its imperfections, free trade is 

relatively more equitable than regulated and subsidized markets which retard innovation and 

distort production and market signals. We oppose attempts to narrow the business options or 

limit the individual th:edom of livestock producers to innovate in the management and marketing 

oflhcir production. 

We oppose inclusion of a "Livestock Title" in the next lann bilL Items with industry-wide 

suppott can be included in the "Miscellaneous Title." I ask tor the support of members of this 

committee in opposing a Livestock Title in the next fann bilL 

Marketing Issues 

KLA members, and the vast majority of cattle producers, oppose the involvement of the federal 

government in determining how cattle are marketed. The beef industry continues to transition 

toward more value-based marketing methods. These systems allow cattle producers to capture 

more of the value of the cattle they produce. 
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David Clawson 

Englewood, Kansas 

Page 3 of5 

These value-based marketing methods also facilitate the transfer of market signals from 

consumers back to producers. We believe these have helped d1ivc a significant 

improvement in Quality Grade, a predictor of a eating experience, in the cattle being 

produced today. 

While many KLA members sec significant benefits in value-based programs, they 

have made clear in KLA policy the appropriate role of the organization is to protect each 

producer's ability to market their cattle in the manner that best tits their business. 

With that in mind, KLA reiterates its opposition to the Grain Inspection, Packers and Stockyards 

Administration (GIPSA) interim final rule on competitive injury. The rule has been opposed by 

the vast majority of cattle producers since it was t!rst introduced in 20 I 0. In issuing the interim 

rule, GIPSA ignored the comments submitted by thousands of cattle producers in opposition to 

the rule, the decisions of eight separate federal appellate courts and the intent oflanguage 

included by Congress in the 2008 Farm Bill. 

Our analysis of the interim final rnlc leads us to believe packers will offer one price for all cattle, 

regardless of quality, if the rule is implemented. Packers have indicated they will not accept the 

additional legal risk the change in the competitive injury standard would create. GIPSA claims 

the rule is needed to protect producers. However, since it would eliminate value-based marketing 

programs, it would negatively impact producers and make it more difficult to provide the types 

of beef products desired by consumers. 

As the 2018 Farm Bill is developed, KLA asks you to delete the language which led to the 

GlPSA interim final rule. To that end, we support striking SEC. 11006, Part l of the 

Food, Conservation and Act of2008. In the we ask t(Jr yonr assistance in 

convincing GlPSA to withdraw rule. 

KLA also opposes any attempts to restrict the ownership oflivcstock. Duling development of 

previous farm bills, some members of Congress have language placing restrictions on 

packer ownership of livestock These types would limit the marketing options 

available to KLA members and would represent unwelcome interference by the federal 

govemment in the marketplace. 

With regard to country-of-origin labeling (COOL), KLA reiterates its opposition to mandatory 

COOL programs. Repeal of the previous mandatory program was appropriate and necessary 

since it provided no market benetlt to beef producers and violated trade agreements with two of 

our largest trading partners. We ask the committee to resist any attempt to reinstate this failed 

program. 

Conservation Title 

Several conservation programs authorized in farm bills have played an important role in 

assisting fanners and ranchers enhance our natural resources for food production, 

wildlife habitat, and water quality. ln Kansas, the Environmental Quality Incentive Program 

(EQIP) is improving habitat for grassland-nesting birds 1mder consideration for listing as 
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David Clawson 

Englewood, Kansas 

Page 4 of5 

threatened or endangered species, enhancing the health of grazing lands, water quality 

ncar lakes used for public drinking water, improving soil quality, conserving and 

reducing soil erosion. One important feature of EQIP has been its focns on livestock operations. 

We recommend a continued focus of60%, ofEQIP funds toward livestock projects. 

We appreciate the addition oftbe Anderson Creek Wildfire Initiative to the EQJP program. As 

landowners work to recover from the effects of the fire, cost-share assistance through the 

program will be very valuable in restoring and enhancing the quality of the rangeland. 

The Agricultural Conservation Easement Program (ACEP) is in strong demand by our state's 

agricultural landowners who desire to sell their development rights to protect their lands for 

future generations of farmers and ranchers. In many instances, selling a conservation easement 

has been a helpful tool for estate and succession planning as today's landowners prepare for the 

next generation of farmers and ranchers. 

l encourage members of this committee to remind your colleagues that federal funds spent on 

conservation are a good investment in our country's natural resources and the ultimate 

beneficiary is the general public. In addition, conservation program spending is not an 

entitlement as panicipants arc required to use these nmds on the land and, in many instances, are 

required to invest their own time and personal funds as a match or cost-share contribution. 

Foreign Animal Disease Response 

KLA supports enhancements to our animal disease (FAD) response capabilities. Key to 

this effort is the development of a more loot-and-mouth disease (FMD) vaccine bank. 

While we recognize and agree with the preference for vaccination over culling for controlling the 

spread ofFMD, the cun-ent availability of vaccine is completely inadequate for an outbreak of 

any significance. 

KLA participated in an FAD exercise last December. The exercise scenario included 

confirmation ofFMD at one fcedyard and two dairy farms in the state. Kansas animal health 

officials determined in such a scenario, an immediate request for 1.5 million doses of FMD 

vaccine would be necessary. That the entire supply of vaccine expected to be available 

to the U.S. in the first week of an outbreak. 

KLA supports additional funds dedicated lor the development of a more adequate FMD vaccine 

bank. In addition, KLA supports additional \vork around FAD response plans that recognizes the 

limitations of vaccination in an FMD outbreak. 

Other Issues 

KLA supp01ts increased funding lor research on production practices, genetics, animal diseases, 

economics, nutrition, food safely, environmental impacts, and the impact of environmentally 

sensitive lands and species on agricull1rral operations is a critical component in advancing animal 

agriculture. Increased investment in this type of research is vital to the security and viability of 

our agricultural industry and food supply. 
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David Clawson 

Englewood, Kansas 

Page5of5 

KLA members strongly support the This industry-fimded self-help 

program has been essential to c!Iorts to increase for beef While maintaining the current 

program is important, we seek opportunities to enhance the program to better meet the needs of 

the current marketing environment 

Conclusion 

As you can see, the vast majority of cattle producers believe markets free from govemment 

interference best serve the beefindnstry, We prefer a fam1 bill that does not restrict our 

marketing options nor distort market We look forward to working with you as the next 

farm bill is developed, 
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Testimony of Mrs. Lynda Foster 

Foster Dairy, Ft. Scott, Kansas 

Field hearing in Manhattan, Kansas 

On behalf of the 

National Milk Producers Federation and Dairy Farmers of America 

February 23,2017 

Mr. Chairman, Ranking Member Stabenow, members of the Committee, my name is Lynda 

Foster. Along with my hnsband and son, I own and operate Foster Dairy, located in Ft. Scott, 

Kansas. 

Foster Dairy has been in operation since the late 1940's. We milk 170 cows and fatm 

approximately 750 acres of corn, soybeans, altalfa and grass hay. 

I am a third generation dairy farmer and have been dairying all my life. I majored in dairy 

production at Kansas State University, met my fi.tmre husband there, and we retnmed to the fam1 

in !978 to t1um in partnership with my parents, Conrad and Beverly Davis. We took over the 

farm on our ovv11 in 1999, and our son and his wife joined us in the operation approximately ten 

years ago. I am proud to be able to continue the tradition of producing safe, nutritious food and 

working with the next generation. 

I am also prond to be a spokesperson for good nutrition and about modem agricultnre. 

Throughout my career l have served in several leadership roles in the Kansas Farm Bmeau, 

Kansas Dairy Association, local and dairy promotion entities, and I am serving my last 

year of six on the National Dairy Research and Promotion Board. 

Jam pleased to be delivering testimony, not just on my behaH~ but also lor my cooperative, 

Dairy Farmers of America, and that of the National Milk Prodncers Federation (NMPF). Only by 

working together- fanner, milk marketing cooperative and national trade advocacy organization 

-can we move forward to make real changes in dairy policy in the next Farm Bill. 

Introduction and Margin Protection Program 

Over the past few years, dairy tanners across the country have faced a number of financial 

challenges. In 2014, Congress passed legislation establishing a new safety net under Title I for 

dairy farmers. During the legislative process, changes were made to the original dai1y program 

designed by NMPF and other dai1y leaders around the country. Unfortunately, the safety net, 

known as the Margin Protection Program tor Dairy Producers (MPP), has failed to provide the 

level of protection envisioned in the original program. 

Like many fl1rmers, I was supportive of the MPP and thought it would finally give our farm a 

tool to manage the extreme volatility we had experienced in the market. In the first year, I, like 

many others, signed up for the program and purchased supplemental coverage at the $6.00 level. 
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Also like others, since that lirst year I have only enrolled at the minimal $4 margin level, which 

to be perfectly honest, Senator, is meaningless. MPP remains the right model for the future of 

our industry, but changes are needed if Congress wants to provide relevant tools to our sector. 

Unfortm1ately, many dairy farmers participating in the MPP have become disenchanted with the 

program. In calendar year 2015, dairy fanners paid $70 million into the MPP program and , 

received $730 thousand. Tn 2016, those ligures were $20 million and $13 million, this was 

particular hard in a year where more program support was needed .. Let me be dear, 1 understand 

that MPP has two components: a tlue, free safety net and then a risk management tooL We are 

not asking for a program that provides a profit to producers, neither do we want a program that 

will enhance or incentivize production. However, the changes that were made to ilie original 

MPP by Congress dilntcd the real costs that fanners face every day and diluted the effectiveness 

of the program. IfMPP was more reflective of the true costs I saw on my limn, I believe active 

participation would rise dramatically. 

ln fact, since its inception, MPP has actually made tl1e govcmment a profit, equal to $66 million 

in fiscal year 2015 and $37million in fiscal year 2016, according to the Congressional Budget 

Office. All we are seeking is a program that provides a safety net for dairy fanners when they 

need it most something that delivers on the risk management promises dairy leaders and 

Congress committed to. ln order to do that, we must make adjustments to the program. 

Given the concems that producers have expressed since the program's inception, the NMPF has 

embarked on a review of the program Congress enacted. As the voice of America's dairy farmers 

in Washington, DC, NMPF represents the vast of producers across the country. The 

NMPF process began in early 2016 and has included the voice of dairy farmers and the dairy 

cooperatives they own, as well as industl)' experts, academia and others to ensure proposed 

changes to MPP will provide the protection to tanners that is expected from a Fmm BilL 

As we consider ways to improve MPP, one issue in particular continues to rise to me surtace. 

When USDA detennines the margin for dai!)' farmers under MPP, there arc two factors- the 

"All Milk Price" and feed costs. The former is a definite number, ret1ecting a long-reported price 

for all milk sold by farmers in ilie United States for processing into different dairy products. We 

need to work with USDA to better understand how this reported price reflects, on average, what 

dai1)' farmers received in their check. The latter, iliough, is more conccming. During the lead-up 

to the 2014 Fa1m Bill, NMPF worked closely with economists, veterinarians, nutritionists and 

farmers to develop a model for average feed costs tor dairy cows. This process took nearly a year 

and included industry experts who understand the real cost of feeding cows. When NMPF 

presented this information to Congress, the formula, while respected as being accurate, was cut 

by I 0 percent This cut resulted in a skewed margin program, a Hawed calculation for MPP and a 

much less useful program. For example, in the period of May ilirough June 2016, the MPP 

margin was reported to be $5.76 per cwt Had the original, more accurate, feed cost fmmula been 

in the law, the margin would have been $4.77 per cwt, enabling a much larger group of 

financially-stressed producers to bcnelit from MPP. As a result of this change, a number of 

flrrmers who purchased higher coverage levels in 2015 did not opt to do so in 2016 because of 

the likelihood of no payment during times of need. 
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There are other adjustments that should be considered regarding MPP. These include, but are not 

limited to, the feed fonnula calculations as it relates to corn and alfalfa hay prices. We dairy 

fam1ers also want to have access to as many tools as possible. Unlike other sectors in agriculture, 

Congress arbitrarily limited the ability of dairy producers to usc Risk Management Agency 

(RMA) products as well as Title I programs. Although all other commodities can use both RMA 

and Title I programs without any restrictions, dairy fanners cannot used the Livestock Gross 

Margin for Dairy Cattle (LGM) program, which remains a popular tool tor producers. Dne to 

restrictions in MPP, a producer must decide at the beginning of the Fann Bill cycle whether to 

cover their milk under LGM or the MPP. This restriction leaves dairy fanners without the tools 

that other fam1ers have at their disposal regarding federal support f(lr their operations. As stated 

above, I have more tools available to manage risk on my corn acres. [ can patticipate in both 

Title I programs as well as crop insurance programs to protect my business. I do not have the 

same opportunity for my dairy. In fact, a look at an analysis of2014 Fann Bill programs for 

major commodities demonstrates that dairy program costs arc miniscule. 

$300.00 

$250.00 

$200.00 

$150.00 

$100.00 

$50.00 

$0.00 

Average Farm Program Payments per Base Acre 

ARC. PLC, MMP 

Peanuts Rice Corn Wheat Soybeans Sorghum Barley Dairy 

($/cwt) Oats 

"'Payments $288.03 $124.05 $26.29 $21.38 $11.26 $30.12 $15.25 $0.03 $17.28 

The above graphic is startling and demonstrates why improvements to dairy support programs 

are necessary to ensure that dairies of all sizes and in all regions have tools to weather 

challenging financial times. 
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Dairy Market Situation 

For the past decade, times have been generally tough for America's dairy farms. In 2009, 

following several years of expanding U.S. dairy exports, world dairy markets collapsed in the 

worldwide recession, taking domestic milk prices with them. Fanu income over feed costs, as 

measured by the MPP margin fommla, fell to $2.25 per hundredweight of milk in June of that 

year, well below the $4.00 minimum margin coverage level, which is commonly referred to as 

"catastrophic" under the cmTent program. The MPP margin fommla averaged $3.87 per 

hundredweight during the first ten months of the year. Three years later, widespread drought 

drove feed prices to historic highs in 2012 and sent the MPP margin back into catastrophic 

territory. 

The margin bottomed out at $2.67 per hundredweight that year and averaged $3.63 during the six 

months of March through August. Many dairy farms did not survive this one-two knockout 

punch, and the many tl1at did are still struggling to recover. Although 2014 was a record year for 

milk prices and margins, world markets again collapsed in 2015 and most of 2016, which had a 

large effect on U.S. milk prices and gross dairy fam1 income. Revenue fi·ommilk sales dropped 

from $49.4 billion dollars in2014 to $35.7 billion in 2015. U.S. Department of Agriculture 

(USDA) data indicates that it was down again in 2016 to $34.4 billion dollars. 

The value of the fi·esh milk America's dairy fam1ers produced in2016 was worth 19 percent less 

than it averaged over the five previous years. The difficult economic conditions and tighter 

operating margins over the last 10 years have resulted in the loss of more than 18,500 dairy 

fanns in the United States. The present environment of depressed market prices could result in 

even more farm closures. While USDA is projecting that milk prices and margins will be better 

in 2017 than last year, milk production is showing signs of expansion following an extended 

period of almost static production. U.S. milk production grew by 1.3 percent from2014 to 2015. 

TI1is annual gro\vth rate expanded to 1.6 percent from 2015 to 2016, but averaged 2.4 percent 

during the fourth quarter. USDA is cunently projecting that milk production will grow again this 

year at an annual rate of2.3 percent. During 2015 and 2016, total commercial use of milk, in 

both the domestic and export markets, increased at an annual rate of 1.8 percent. The recent and 

projected expansion of milk production has a real possibility of outpacing demand, which will 

weigh heavily on milk prices again. 

Finally, dairy farmers deserve better. W c need Congress to act swiftly this year and make the 

necessary changes in order for our industry to be able to protect ourselves from the bad year that 

could arrive at any time, even in years where experts are predicting higher margins. We dairy 

farmers are doing our job. We are producing safe, nutritious milk for the market. If that market 

goes sour or our costs soar because of drought, we must have the ability to protect our equity and 

our investment. Please do not leave us behind. Act now. 
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Farm Labor 

I am lucky that the majority of my farm's labor needs are mel with family laborers. Until very 

we had only one full time hired hand. She made up 25 percent of my labor force. We 

have recently hired a part-time employee to help us through a family health-related issue. The 

issue of farm labor is important whether you are a dairy of my size or one like my colleagues in 

southwest Kansas, where farms arc milking thousands of cows. No one here in Manhattan, in any 

corner of town, is hoping to one day secure a job milking cows. In all my years in agriculture, I 

have witnessed a decreasing interest, not increasing interest, in careers on the fann. These 

agricultural jobs pay well and come with benefits. Additionally, they are located in a great part of 

the country! We try in vain to find interest by American workers, but dairy fanners, like others in 

agriculture, have had to look to qualified foreign-hom workers to meet our labor needs. 

According to a University of Texas A&M report, released in August 2015 (and conducted in 

coordination with NMPF), 51 percent of all dairy fanu workers arc foreign bom, and the fanus 

that employ them account tor 79 percent of the milk produced in the United States. How are 

dairies like mine, or any others, supposed to operate if we do not have access to a reliable 

workforce? In dairy, we cannot tum the cows off when there are not enough employees to do the 

job, we have to milk them. This is the reason that NMPF and my cooperative, Dairy Fanners of 

America, have urged Congress to act immediately to reform our immigration system in a manner 

that addresses agriculture's needs for a legal and stable workforce. I fear that if we don't, we as a 

country will have to face the reality that the term, "Made in America," will not apply to the milk 

you drink or the cheese you eat. I believe that in the future, the milk U.S. consumers enjoy will 

be milked by foreign-born workers. The question is, are they milking cows here in Kansas or are 

they doing it in their home country? 

The new plant DFA is building in Garden City, Kansas will benefit all of us here and farmers 

all over the country, as most of the product will be exported. To keep the plant filled, southwest 

Kansas dairy farmers will have to maintain milk production. How can they do that with their 

current labor strain? 

My family decided to address part of our labor needs hy purchasing robotic milkers. These 

milkers allow me to spend time on other parts of my operation. This was the only solution we 

could come up with- but it is expensive and complex. 1 hope the investment is wo1th it in Ji.tture 

net savings. Additionally, my answer is not the answer for all dairy farmers. The larger farmers 

in southwest Kansas likely do not have the right infrastrncturc on their operation to usc this 

technology. For once, this is a technology where smaller t~muers are the target for adoption. 

Trade 

The dairy industry has come a long way on trade in the past several years. Our nation has gone 

from exporting dairy products valued at less than $1 billion in2000 to expmting a record $7.1 

billion in 2014, an increase of 625 percent. Although low prices brought that number closer to 5 

billion last year, we remain the largest exporter of skim milk powder, whey products and, 
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depending of the month, the number one expmter of cheese in the world. That reflects not just a 

tremendous jump on a value basis, but also a dramatic increase in the proportion of U.S. milk 

production that's finding a home overseas. 

Fifteen years ago we were exporting roughly five percent of our milk production, now we are at 

three times that level, even as overall U.S. milk production has continued to grow. That means 

the equivalent of one day's mille production each week fi·om the entire U.S. dairy industry 

ultimately ends up overseas, making exports integral to the health of my fann and our dairy 

industry at large. It is critical that Congress protects the progress we have made as the 

Administration updates trade agreements like the North American Free Trade Agreement 

(NAFTA). 

I also urge a strong rejection by Congress ofthe European Union's (EU) aggressive stance on 

confiscating common food names. Names like Parmesan and Feta belong to everyone, not just a 

handful of producers in Italy and Greece. Our industry has built markets here and overseas. We 

need to protect those markets. We can be competitive and increase sales in markets as diverse as 

Latin America, the Middle East and Asia. What we need are well-negotiated agreements and the 

necessary tools to achieve and implement them. 

The Market Access Program (MAP) and Foreign Market Development (FMD) program are some 

of those tools. I urge the Committee to maintain those programs, but allow for USDA to review 

the distribution of monies so those like dairy, that have expanded exports significantly in the last 

l 0 years and are matching with funds and efforts, are awarded by providing enough funds to 

continue the work. 

Environmental Sustainability 

Fam1ers are the original environmentalists. As a dairy fanner, I care deeply about the land, air 

and water that I raise my herd and my family on. In recent years, however, federal and state 

regulators have applied significant pressure on the dairy sector to reduce nutrient output to 

improve water quality in dairy-producing regions across the country. We, as an industry, have 

invested significant resomces to proactively respond to this challenge, and we continue to work 

to embrace the best possible environmental practices. Tn 2008, the dairy industry voluntarily set a 

goal of reducing greenhouse gas (GHG) emissions hom J1uid milk by 25 percent by 2020, and 

has since undertaken several projects intended to help meet that goal. 

In a demonstration of continued leadership, the dairy industry is seeking proactive policy 

solutions that will help tum an environmental liability, such as manure, into a valuable asset. To 

that end, we arc grateful to you, Chainnan Robctts, for partnering with Senator Brown in the last 

Congress to put forward the bipartisan Agriculture Environmental Stewardship Act. This 

legislation creates an Investment Tax Credit to cover the upfront capital costs of nutrient 

recovery and biogas systems, which can play an important role in reducing the environmental 

impacts of dai1y farming and, in turn, improve water quality in every region. We look forward to 

working with you again this year to introduce, gain suppmt for and pass this legislation. 
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Like other sectors of the economy, dairy farmers are impacted by political, legal and regulatory 

uncertainty. Producers arc committed stewards of a healthy ecosystem, but we need cettainty 

regarding the application of environmental policies and regulations to their operations. In this 

context, we support the bipartisan Fann Regulatory Certainty Act, which is pending in the House 

and soon forthcoming in the Senate. This act is intended to reatlinn the intent of Congress that 

dairy fanners and other agricultnral producers were not to be subject to solid waste laws passed 

more than four decades ago. As dairy fanners, we strive to comply diligently with any law we 

are subject to, but legal and regulatory certainty is critical to our efforts in this regard. 

Child Nutrition 

I want to thank you for your work in the last Congress with Senator Stabenow and others to 

reauthorize child nutrition programs. As you know, Child Nutrition programs in schools serve as 

part of the backbone of America's education policy. As a mother and grandmother, I know when 

my kids are well fed they are more productive, more responsive and more active. As an advocate 

for balanced diets and good nutrition for the nation's youth, I know that milk has been a key 

piece of meals served in schools, even predating the cunent school breakfast, lunch and dinner 

programs. However, recent changes made by the Obama Administration precluded schools from 

having access to a variety of dairy beverages based on outdated science regarding milk fat. 

Mr. Chairman, when you and millions of other Americans go to the grocety store, surveys show 

that you are likely to purchase 2 percent or whole milk. You have a choice to make between the 

various products. When children go to school they do not have that same choice, despite the 

widely recognized benefits of all milk. They are limited to three options: skim white milk, skim 

flavored milk or I percent white milk. This is not the milk they drink at home, and they are 

unlikely to do so when they go to school. When you have a product like milk that provides nine 

essential nutrients and vitamins, and that even the folks at USDA say is under-consumed, an 

important question must be asked. If the point of school meal programs are to provide the 

nutrients and sustenance children need, why eliminate the option of nutrient rich, healthy foods 

like l percent flavored milk or 2 percent milk if children simply throw away what they are 

cun·ently served? The science tells us that expanding options for schools to offer milk that will 

help children meet their nutrient requirements is a good nutrition policy and good public policy 

and it should be addressed by this Committee. In fact, even former Sccretmy of Agriculture Tom 

Vilsack testified before the House Education and Workforce Committee (June 16, 2015) on the 

issue of expanding milk options for schools, stating "if adding that option [I percent flavored 

milk] would encourage kids to drink more milk, we should do that." 

Mr. Chainnan and members of the Committee, I appreciate the oppmtunity to share the thoughts 

and concems of those in the dairy industry with you, and I look forward to your questions. 
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Amy France 

Owner/Operator/Partner of France Family Farms in Kansas 

Senate Agriculture, Nutrition, and Forestry Committee 

Hearing from the Heartland: Perspectives on the 2018 Farm Bill from Kansas 

February 23, 2017 

Chairman Roberts, Ranking Member Stabenow, and members of the committee. It is an honor 

and privilege to sit before you today. My name is Amy France. I live near Marienthal, an unincorporated 

community in Wichita County, Kansas. While I am a first-generation agricultural producer, my husband 

Clint and his family have been farming in the High Plains of western Kansas for three generations. We 

understand the risk associated with farming and ranching in a region that averages less than 20 inches of 

rainfall annually. Add in the fact that only three percent ofthe ground the good Lord blessed us with is 

irrigated, I sit before you today without a doubt in my mind the necessity of the Farm Bill and the federal 

crop insurance program. Clint and I have five children. Our oldest son recently came back from school to 

help on the family farm. We pray they will continue the family farm and become the 4';, generation to 

farm the rolling lands of western Kansas. Today our family operation consists of 6,000 acres where we 

grow wheat, corn, sorghum and soybeans. We also are blessed to graze our 300 head cattle operation on 

4,000 acres of beautiful pasture. We treasure the land we are blessed with. We do all we can in 

preserving it so our children will have the opportunity to continue our passion and livelihood. 

As congress begins to research, discuss and plan the next five-year Farm Bill, I encourage you to 

double down on what is working and to revamp or eliminate areas that need improvement or flat out just 

do not work. Without question, the most Important USDA program is federal crop insurance; and I'm not 

alone i.n that belief. In Kansas, 84% of the soybean acreage, 88% of the grain sorghum, and 95% of both 

corn and wheat acreage are insured through USDA-Risk Management Agency (RMA) policies. For the 

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2015 crop year, that represented more than 18 million acres, specifically, high risk areas like where my 

family farms, to plan for next year's crop. If it were not for the federal crop insurance, the Livestock 

Forage Program (LFP) and similar safety net programs, many of my neighbors would no longer be in 

business. We're able to sign loan papers at the bank, consult with our agronomist, seed salesmen, 

equipment dealer or commodity broker, and even plan for increased crop diversity and rotation. Crop 

insurance offers risk protection to many agricultural commodities and when disaster strikes, the 

indemnity check is in our bank account much sooner than any other USDA program. As crop insurance 

continues to evolve and participation rates increase to historic levels, we need to make sure the Risk 

Management Agency continues to improve the program. For example, having a workable limited 

irrigation practice developed will help many areas of Kansas as scarce water becomes a more precious 

natural resource. As new seed traits and technologies continue to be developed, reviewing insured 

commodity planting dates and the benefits of cover crops to insured commodities will be key to ensure 

producers participate at the highest coverage levels possible. However, crop insurance is not without its 

shortcomings. Due to a prolonged drought in western Kansas, many of my neighbors' Actual Production 

History (APH) has declined. With commodity prices being as low as they are today, some producers have 

little to no revenue protection offered through crop insurance due to the APH and price calculation. 

Many are leaving the program to self-insure until prices rebound considerably or congress finds a solution 

to the eroded APH. Another contributor' to reduced APH's is purely a procedural glitch in adjusting for 

losses. In a drought year, aflatoxins are sometimes present in corn, and spring rains occurring when 

wheat is pollinating can often contribute to the presence of vomitoxins in wheat. Both mycotoxins are 

poisonous to livestock and humans, reducing the crops value. Crop insurance adjusts for this by 

multiplying a Quality Adjustment Factor (QAF) by the bushels produced, resulting in "production to 

count" which is multiplied by the crop insurance price to obtain the revenue per acre determination. The 

problem is that this adjusted production to count also goes into the farmers' APH calculation for the next 

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10 years. A simple solution would be to multiply the QAF by the crop insurance price instead of bushels 

delivered. 

Another concern with crop insurance is that while the Commodity Exchange Price Provisions 

(CEPP) that are used to set projected and harvest prices for revenue protection products truly provide a 

market determined price, they do not adequately account for differences in basis (cash price minus 

futures price} which can vary greatly across the state. For example, according to Kansas State University's 

AgManager website, the five-year average wheat basis in Garden City, near my home, is ($0.51}, while in 

Salina, it is ($0.074); creating a nearly $0.44 per bushel gap in my safety net relative to central Kansas 

farmers. At 40 bushels per acre, that's a $17.60 gap in my crop insurance per acre safety net because I 

farm in a different part of the state. 

Additionally, in years like 2016, when grain supplies exceed available storage capacity and 

Chicago Board ofTrade (CBOT) Kansas City Hard Red Winter Wheat (KC HRW) futures are not converging 

at delivery points, an even greater gap in our wheat income safety net is created. This is because it is the 

July KC HRW futures contract that is used for the Revenue Protection (RP) crop insurance policies, and 

when July wheat futures are not accurately reflecting market fundamentals, our wheat income safety net 

is further adversely affected. 

USDA commodity programs administered through FSA are also extremely vital to France Family 

Farms being able to pass the operation along to the next generation. Farming is inherently a risky 

business. Until we better understand (and control) Mother Nature, we are one hail storm away from 

going out of business. The 2014 Farm Bill injected additional, unnecessary risk to the producer by forcing 

producers to decide between signing up for a revenue program (Agricultural Risk Coverage), with a 

national price trigger and a county or individual yield trigger, or a counter-cyclical price program (Price 

Loss Coverage) which paid out only when prices for commodities grown in Kansas reached extreme lows. 

Farmers make decisions daily about their business operations but having the government force a decision 

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between what is the greatest risk price or yield is a decision many wish they could change less than 

three years later. To make matters worse, whichever program a producer signed up for, USDA paid the 

producer more than a year after the financial strain of the revenue or price loss and long after the bank 

required payment on an operating line of credit This is no better than the ad-hoc disaster programs 

congress used to pass every election year it is too little, too late. And, in the case of ARC-County, Kansas 

producers farming in multiple counties received vastly different USDA payments due to the uncertainty 

and unpredictability surrounding which data sources (NASS vs. RMA vs. other) and the hit and miss 

approach of when they were used in calculating ARC-County benchmark yields and annual triggers. I 

understand congress has tough decisions to make, and often budget bean counters push you down a less 

desirable path, but there are real consequences of locking into a government-sponsored safety net 

program only to see that safety net offer little to no protection within a year or two of starting the fiveyear commitment. Unfortunately, in the case of ARC and PLC the federal government added additional 

risk to farmers rather than reducing it As you begin the task of writing a new bill! urge you to look 

closely at these programs and find a better way to offset the risk of farming on the High Plains and 

elsewhere. 

As a young producer USDA programs can be overwhelming and quite burdensome. While 

program sign up timelines seem to be relayed to us that "time is of the essence", after jumping through 

the hoops, you are often met with road blocks and delays out of our control. It is obvious that the 

individuals creating these government programs and national regulations have little "hands in the dirt" 

experience. Furthermore, farmers young and old, must rely on the understanding and expertise of the 

federal employees working in our local USDA service centers for information, a better understanding of 

how programs work in our part of the country, and what our legitimate chance of being selected for 

specific programs are. 

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Additionally, while USDA efforts to ensure that payments only go to eligible farmers is 

commendable, the complexity and required reporting that are part of the "actively engaged" rules create 

real hardships and unduly punish business operations in Kansas. I would hope that one of the goals of the 

Farm Bill is to assist farm families so they can remain a viable part of rural communities. Sometimes, to 

pull together the capital needed to form a viable farming operation, multiple family members from 

different local farm families is needed. Today's actively engaged rules penalizes these family farms and 

the way they structure their businesses. We encourage the committee to reassess the actively engaged 

rules and reporting requirements so these family farms are treated in the same manner as all other 

farms. 

Another major title of the Farm Bill is conservation. This title has evolved over time and Kansans 

rely on the multitude of programs to ensure we continue to keep, build and restore the soil, water and air 

required to pass the farm on to the next generation. It seems over the more recent years we have had to 

utilize USDA conservation programs in order to keep the U.S. Fish and Wildlife Service (USFWS) at bay 

with their threatened listing under the Endangered Species Act (ESA) for the lesser prairie chicken (LPC). 

For example, in total in Kansas we have just over two million acres enrolled in the Conservation Reserve 

Program (CRP), but in the 39 western Kansas counties located within the LPC range, there are 1,349,648 

acres enrolled in the CRP, broken down as: 

476,986 acres and 4,110 contracts; CP2 Native Grass Plantings 

252,591 acres and 2,989 contracts; CP4D Wildlife Habitat 

483,764 acres and 4,819 contracts; CP25 Rare and Declining Habitat 

7,168 acres and 382 contracts; CP33- Upland Bird Habitat Buffers 

129,139 acres and 2,453 contracts; CP38 State Acres for Wildlife 

This is in addition to the acres enrolled in voluntary range-enhancement programs as part of NRCS's 

Lesser Prairie Chicken Initiative (LPCI). 

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It was also extremely concerning when the EPA and the U.S. Army Corps of Engineers proposed 

the Waters of the United States (WOTUS) rule a few years ago at the same time USDA proposed a rule 

that listed several agricultural practices that were offered protection from WOTUS regulations. 

Unfortunately, the USDA list did not cover all of the modern-day agricultural best management practices 

we implement today under the proposed protections. Even more concerning to me is the ongoing use of 

voluntary conservation practices, which come with limited cost share, being used to cover regulatory 

mandates from other federal agencies. As a producer, I feel like I'm being squeezed in the vice clamp 

between federal regulations that make no sense, were drafted by a bureaucrat sitting behind the 

computer screen, in a basement with no windows 1,000 miles away and a consuming public that has less 

and less of an understanding where their food, fiber and energy comes from with every passing year. 

Farmers and ranchers were the original conservationists because without keeping our soil in the field, our 

waterways usable and the air breathable there is no way we would be able to pass an operation down the 

family line; nor would we allow our young children to work in an environment that would put them in 

harm's way. It becomes increasingly frustrating to explain to an urban public the importance of cost share 

dollars being leveraged when putting conservation practices on the ground, and the societal benefit of 

such actions and programs. To that extent, Farm Bureau strongly supports working lands conservation 

programs such as the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship 

Program (CSP). Looking at the most recent year data available (2015), there were 594 Environmental 

Quality Incentive Program (EQIP) cost-share contracts awarded in Kansas, providing for additional 

conservation practices to be applied on more than125,000 acres; and there were 510 Conservation 

Stewardship Program (CSP) cost-share contracts awarded, covering an additional1.03 million acres. We 

have been able to utilize the EQIP program several times on our farm with the rebuilding of terraces and 

drilling a well for our livestock. We understand how vital terraces are to our land and with the cost-share 

assistance available through EQIP we are now able to rebuild 35-year-old terraces. Another example of 

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how EQIP is helping our farm is with the drilling of a water well for our cattle. Without programs like 

these, we would not be able to financially make these changes and updates that are key to caring for our 

soil, our livestock and our local economy. If anything, though, these programs could be streamlined and 

simplified through the regulatory process to get conservation practices started and completed in a timely 

manner. It would be helpful if NRCS reworked their requirements for the DUNS and SAMS numbers across 

all forms of business structures. Furthermore, producer friendly administration of programs and 

transparency of the ranking system for prioritizing conservation practices across states and regions would 

benefit all producers and USDA local employees, alleviate duplicative paperwork and minimize frustration 

from multiple trips to the local field office, and curtail administrative paperwork errors. 

The Rural Development title of the farm bill receives much praise across the state and nation but 

is often out of sight, out of mind. In the 21" Century farmers and ranchers need access to precision 

agricultural tools, split second market information and technology data packages that allow for valueadded sales and modern-day communication- at a competitive price point with reliable service. I sit 

before you today and tell you this is not the case in many areas of rural America, including the France 

home in MarienthaL In fact, while I was drafting this written testimony last week, I lost internet service 

four times in a single evening. Like it or not, the world continues to get smaller and spin faster. Unless 

government steps up like they did during the Rural Electrification Act in 1936, America will be split 

between the urban areas, connected along major transportation routes where urbanites require 

connection points, and truly rural or frontier regions, such as where I live, will continue to struggle with 

reliable and cost effective technology access. Technology connection is an absolute necessity to business 

survival not only on our farm but also along rural Main Street and among rural healthcare providers. 

Another area where the Senate Agriculture, Nutrition, and Forestry Committee along with USDA 

could be a true champion of the American farmer is on the regulatory front Due to overzealous 

regulators, we are being buried in compliance paperwork and restrictions and our international 

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competitors continue to take an increasing amount of market access. While I could spend hours 

discussing the growing list of regulatory concerns, I am hopeful this committee will conduct at least one 

issue surfacing and oversight hearing on regulatory concerns within agriculture and rural America. Today I 

will discuss just a few of the many items that keep me and my husband up at night First, the proposed 

WOTUS rule would put our operation out of business overnight should a citizen lawsuit or an EPA/Army 

Corps regulator determine one of the ephemeral streams on the land we farm is a Water of the United 

States. In an area that receives less than 20 inches of rainfall annually, the streams, creeks, and sloughs 

that "flow" across Wichita County and western Kansas don't contribute to any navigable flow. On those 

years where the good Lord blesses us with moisture, we are lucky to have flowing water in the road ditch 

or terrace channel once or twice a year. And when it happens, we want every drop to soak into the soil 

profile and recharge the underground Ogallala Aquifer. Second, EPA has been on a rampage the past few 

years revoking tolerances of many commonly used pesticides. These synthetic chemicals are necessary to 

produce the bushels we are capable of today and act to keep weeds, pests and funguses at bay. Without 

the ability to use EPA-restricted-label-use pesticides, our operation would return to a bygone era of 

increased tillage, increasing the risk of erosion and soil loss, increasing the amount of fuel needed to run 

the operation, and putting additional wear and tear on our equipment and employees. Again, I do not 

wish to put myself, my husband or our children in harm's way. If there is sound science presented that 

shows a need to use less or revoke a tolerance completely then I trust that science; but, constantly 

fighting activists who believe the smallest amount of every synthetic or natural chemical product means 

the end of the world does not compute with reality when farmers across the globe are required to 

produce more bushels of grain to meet the nutritional needs of more than seven billion people globally. 

Kansas farmers and ranchers desperately need the federal government to return to utilizing risk-based 

science, common sense and allow American ingenuity to once again flourish when it comes to producing 

agricultural commodities and animal protein. 

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Third, to start this year the EPA finalized their Worker Protection Standard (WPS). While not fully 

understood or implemented, this regulation will increase costs on our farm. It forces significant changes 

to the longstanding private pesticide applicator license the Kansas Department of Agriculture administers. 

Thanks to WPS, some private applicators, who have been licensed and conducted their pesticide 

application fully under state and national law, will choose not to reapply and instead will be forced to hire 

a professional pesticide applicator to apply registered pesticides. This additional cost, all due to a change 

EPA implemented beginning in January 2017, will increase a cost of production agriculture we could 

better control prior to the change. 

Fourth and my final point on overregulation, the 2013 ammonium nitrate fertilizer explosion at 

the West Fertilizer Company in West, Texas, was a tragedy and our thoughts remain with those affected. 

However, anhydrous ammonia was not the cause of the explosion and has never been an explosive 

material. Yet, the Occupational Safety and Health Administration (OSHA) proposes to change the 

regulations pertaining to storing and transporting anhydrous ammonia. If this were to be fully 

implemented, it would limit our access to the most cost-effective source of nitrogen fertilizer available. 

Also, depending on how businesses who sell the fertilizer comply with the rules, the proposed rule 

change could force producers to travel farther, taking on additional risks, in finding a business to supply 

their farming operation with a necessary nutrient to grow grain commodities. Thankfully, congress 

continues to put language in appropriations bills to prohibit OSHA from severely limiting our access to 

anhydrous and I strongly encourage this committee to be a champion for the farmer on this issue. 

Due to the regulations listed above along with many others, my husband and I are continuing to 

diversify our farming practices and operation. We know on the France Farm we are not the only ones 

experiencing tough economic times. Although we know conventional farming is the only way to truly feed 

the world, and I would add we strongly believe conventional farming is safe and effective, we have begun 

the process of converting 1/3 or our wheat fields to certified organic. The regulations on chemicals that 

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truly work are becoming so burdensome that the costs involved are more than our farm can handle. In 

addition to diversifying our input costs, we are able to market our grain and negotiate for better prices at 

different delivery locations than where we take conventional grains we raise on 2/3 of our acres. 

Furthermore, last year, while looking for ways to supplement our income, we tried our hand at raising 

pumpkins. With just a 1/2 acre utilized, we were able to supply our area communities with pumpkins. 

Although it was hard work, it was an opportunity for us as a family to work together on something new 

and found we were able to make a significant profit by identifying a need and being willing to take a 

chance and further diversify. Will we convert our entire 6,000 tillable acres to pumpkins? No but on small 

acreage, when our family labor resources allow, we will continue to look for ways to add profit to our 

operation. 

In closing, it is an honor to sit before you today and testify on behalf of Kansas Farm Bureau and 

our more than 30,000 farm and ranch family members across Kansas as you begin to plan for the next 

farm bill. In summary, crop insurance is without question the number one program we rely on to keep 

our business operating year to year. The commodity, conservation, and rural development titles are also 

extremely important. Many of the programs USDA administers have benefited our operation and we are 

thankful for the opportunity to utilize technical assistance and program experts when we sign up for 

various USDA programs. Without question, technology continues to advance, the business and structure 

of agriculture evolves, and risk associated with farming only increases. Some of this is due to market 

structures and global demands, while some of it can directly be tied to how USDA programs are executed 

In more recent years, attacks have come from other federal agencies with little understanding and 

appreciation for what farmers and ranchers do every day to put food on the table, fuel in the tank, and 

clothes on the backs of Americans. !look forward to continuing the discussion, watching how agricultural 

policies will be altered, and seeking out how my fellow producers will be relieved of many regulatory 

burdens over the next two years by discussing how the next Farm Bill will be written. 

Amy France of France Family Farms; Senate Ag Committee Field Hearing; Manhattan, Kansas; February 23, 2017 
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February 2017 

Testimony of 

Shan Hanes 

On Behalf of the 

AMERICAN BANKERS ASSOCIATION 

before the 

Agriculture, Nutrition and Forestry Committee 

United States Senate 
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Testimony of' 

Shan Hanes 

On behalf'of'the 

American Bankers Association 

befhre the 

Agriculture, Nutrition and Forestry Committee 

of' the 

United States Senate 

February 23,2017 

Chairman Roberts, Ranking Member Stabenow, and members of the Committee, my 

name is Shan Hanes, and I am the President and CEO of First National Bank in Elkhatt, Kansas. 

First National Bank is a $78 million bank with a main location in Elkhart, Kansas and one brm1ch 

serving Rolla, Kansas and the surrounding area. We have 21 employees and we predominantly 

lend to the agricultural sector. Despite our small size, the bank is the largest lender in the county. 

We represent an average sized bank in rural Kansas. 

I am also a member of the American Bankers Association's Agricultnral and Rnral 

Bankers Committee. I appreciate the opportunity to present the views of rural lenders and the 

impact of the Agricultnral Act of2014, better knovm as the 2014 Fam1 Bill. 

'Dre American Bankers Association is the voice ofthe nation's $17 trillion banking 

industry, which is composed of small, regional and large banks that together employ more than 2 

million people, safeguard $13 trillion in deposits and extend over $9 trillion in loans. ABA is 

nniquely qualified to comment on agricultural credit issues as banks have provided credit to 

agricultmc since the founding of our country. Over 5,000 banks- over 82 percent of all banks--

reported agricultural loans on their books at year end 2015 with a total outstanding portfolio of 

over $172 billion. 

The topic oftoday's hearing is very timely. There have been many successes within the 

20!4 Farm Bill that have directly affected agricultural lenders. However, the agricnltnral 

landscaped has chm1ged considerably since the passage of the last Farm BilL Agricultural lenders 

have often been the first group to feel the effects of the changing agricultural landscape, and the 

role that pnb!ic policy has played in shaping that landscape. 
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The agricultural economy has been slowing, with farm sector profitability expected to 

decline fmther in2017 for the fourth consecutive decline. However, farm and ranch incomes for 

the past five years have been some of the best in history. With the 2014 Fann Bill in place, 

tam1ers, ranchers and their bankers achieved a level of certainty from Washington about future 

agricultural policy. Interest rates continue to be at or near record lows, and the banking industry 

has the people, capital and liquidity to help American farmers and ranchers sustain through any 

turbulence in the agricultural economy. 

Banks continue to be one of the first places that fatmers a11d ranchers tum when looking 

for agricultural loans. Our agricultmal credit portfolio is very diverse- we finance large and 

small fam1s, urban fanners, beginning fat>ners, women fatmers and minority farmers. To 

bankers, agricultural lending is good business and we make credit available to all who can 

demonstrate they have a sound business plan and the ability to repay. 

In 2015, tarm banks banks with more than 15.5 percent of their loans made to farmers 

or ranchers- increased at,'ficulturallending 7.9 percent to meet these rising credit needs of 

farmers and ranchers, and now provide over $100 billion in total fm111 loat1s. Fann banks are an 

essential resource for small farmers, holding $48 billion in small farm loa11s, with $11.5 billion in 

micro-small fannloans (loans with origination values less than $100,000). These farm banks are 

healthy and well capitalized, and stand ready to meet the credit demands of om nation's fmmers 

large and small. 

In addition to our commitment to farmers and ranchers, thousands of fann dependent 

businesses- food processors, retailers, transp01tation companies, storage facilities, 

manufacturers, etc.- receive financing from the banking indnstry as well. Agriculture is a vital 

industry to our country, and financing it is an essential business for many banks, mine included. 

Banks work closely with the USDA's Fam1 Service Agency to make additional credit 

available by utilizing the Guaranteed Fann Loatl Programs. The repeal of borrower limits on 

USDA's Farm Service Agency guaranteed loans has allowed farmers to continue to access credit 

from ba11ks like mine as they grow, ensuring credit access for fmmers across the country. 

We remain conccmed with certain areas of the agricultural credit market. In patticular, 

we are worried that the Farm Credit System- a govemment sponsored entity- has veered away 
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FchmaD' 20 f 7 

fi·om its intended mission and now represents an unwan·antcd risk to taxpayers. The Fann Credit 

System was founded in 1916 to ensure that young, beginning, and small farmers and ranchers 

had access to credit. It has since grown into a $315 billion behemoth offering complex financial 

services. To put this in perspective, if the Farm Credit System were a bank it would be the ninth 

largest in the United States, and larger than 99.9 percent of the banks in the cowttry. 

This system operates as a Govemrnent Sponsored Entity and represents a risk to 

taxpayers in the same way that Fannie Mae and Freddie Mac do. It benefits from significant tax 

breaks- valued at $1.3 billion in 2015 giving it a significant edge over ptivate sector 

competitors. Moreover, the Farm Credit System enjoys a govcmmcnt backing, formalized by the 

creation of a $10 billion line of credit with the U.S. Treasury. 

The Fatm Credit System has veered significantly fi·om its chatter to serve young, 

beginning, and small farmers and ranchers, and now primarily serves large established farms, 

who could easily obtain credit from the private sector. In fact, the majority ofF arm Credit 

System loans outstanding are in excess of$lmillion. Any farmer able to take on over $!million 

in debt does not need subsidized credit. Moreover, the volume of small borrower loans accounted 

for 14 percent of all new Fann Credit System loans in 2015. 

Our nation's farmers and ranchers are a critical resource to our economy. Enswing that 

they continue to have access to adequate credit to thrive is essential for the wellbeing of our 

whole nation. America's banks remain well equipped to serve the borrowing needs of farmers of 

all sizes. An important step in ensuring credit availability is to review entities such as the Fatm 

Credit System and ensure that they stick to their charter of helping young, beginning and small 

fanners. 

In my testimony today I wonld like to elaborate on the following points: 

);. Banks are a primary source of credit to fanners and ra11chers in the United States.; 

);. The 2014 Fann Bill was successful by supporting crop insnrance, the 

conservation reserve program and by removing term limits on USDA Guaranteed 

Farm Loan Programs. However, the next Fam1 Bill will require some necessary 

changes to ARC and PLC programs, especially on the timing of payments; 
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Jo> Banks work closely with the USDA to make additional credit available via the 

Guaranteed Fam1 Loan Program but there is a need to increase the loan cap within 

these programs; 

Jo> The Fann Credit System bas become too large and unfocused, using taxpayer 

dollars to subsidize large borrowers and congress should consider legislation that 

would level the playing field with the Farrn Credit System. 

I. Banks Are a Primary Source of Credit to Farmers and Ranchers in the U.S. 

For my bank and for many ABA members. agricultural lending is a significant 

component of their business activities. ABA has studied and reported on the performance of 

"fann banks" tor decades and, we are pleased to report that the performance of these highly 

specialized agricultural lending banks continues to be strong. ABA defines a farm bank as one 

with more than 15.5 percent fam1 or ranch loans (to all loans). 

At the end of 2015, there were 

1,976 banks that met this definition. Farm 

lending posted solid growth during 2015. 

Total limn loans at farm banks increased 

by 7.9 percent to $100.3 billion in 2015 up 

from $94.6 billion in2014. Approximately 

one in every three dollars lent by a farm 

bank is an agricultural loan. 

Fann real estate loans grew at a 

faster rate than farrn production loans. 

Outstanding farm real estate loans grew at a 

pace of9.1 percent. or $4.2 billion, to a total 

of$50.6 billion. Farrn produc!ion loans rose 

by 6.6 percent, or $3.1 billion, to $49.8 

billion. F arrn banks are a major source of 

Farm Banks Exhibit Solid Farm Loan Growth 

2011 2012 2013 2014 :!015 

Farm Banks Increase High-Quality Capital 

$40 

S30 

$20 

$10 

2008 2009 2010 2011 2012 2013 2014 2015 
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Febma~11 :?017 ------~~~~ 

credit to small fanners~ holding more than $47.8 billion in small farm loans (origination value 

less than $500,000) with $11.5 billion in micro-small farm loans ( migination value less than 

$100,000) at the end of2015. The number of outstanding small fann loans at fann banks totaled 

761,192 with the vast majority~ over 496,200 loans~ with origination values less than 

$100,000. Farm banks are healthy and well capitalized and stand ready to meet the credit 

demands of our nation's fam1ers large and small. 

Equity capital--often thought of as the strongest fonn of capital-at farm banks 

increased 4.9 percent to $47.7 billion in 2015. Since tl1e end of2007, fmm banks have added 

$19.5 billion in equity capital, building strong high-quality capital reserves. These capital 

reserves will enable farm banks flexibility as the agricultural sector adjusts to lower commodity 

prices~ allowing bankers to work with and serve the needs of our nation's famers- and will 

also act as a buffer, proving insulation fi·om the risks associated with any downtum in the 

agricultural sector. 

One area of concem for farm bankers and their customers has been the rapid appreciation 

in timnland values in some areas of the country. The mn up in farmland values has not been a 

credit driven event. Farm banks are actively managing the risks associated wiili agricultural 

lending and underwriting standards on farm real estate loans are very conservative. The key 

consideration in underwriting any loan is the ability of the customer to repay regardless of the 

collateral position in ilic loan. To fm1her manage risk, we regularly stress test our loan portfolios 

to judge repayment capacity under different sccnmios. 

After several years of large increases in fam1land values, the consensus view among 

bankers I know is that the increase in cropland values has slowed. USDA estimates of lower 

commodity prices for the third consecutive year in 2016 seem to have modestly cooled offthe 

demand for farm real estate. We watch ilie fann real estate market very closely, as do my 

customers. In recent yem·s, over four-fifths of the agriculture sector's asset values were held in 

real estate. USDA estimates a 1.2 percent decline in the value offann real estate in 2016. 
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l~bmacy 2017 

II. The Agricultural Act of2014 Had Many Successful Components, But Improvements 

Remain Necessary 

One success of the 2014 Fann Bill was the continued support of crop insurance 

programs. Agricultural lenders use crop insurance as a guarantee to help secure financing for 

operating credit. With crop insurance, a lender has the ability to provide support based on 

individual producers' proven crop yields. This allows lenders to tailor a loan to a producer's 

operation and allow tor year-to-year adjustments within that operation. Without crop insurance 

acting as a safety net, producers would be in a much more challenging financial situation in the 

event of disaster. Crop insurance has allowed lenders to provide the best possible terms for 

operating loans because it helps to lower the risk for the lender. ABA has been a long-time 

supporter of crop insurance programs and would like to sec the programs expanded to help as 

many producers as possible. 

Another success of the 2014 Farm Bill was the continuation of the Conservation Reserve 

Program (CRP). CRP is vital in rural areas as it provides another use tor land that may be 

otl1erwise unsuitable for fanning. From a lender perspective, CRP is another tool in the toolbox 

for landowners to use when they are trying to diversity their holdings. Additionally, CRP can 

provide a steady stream of income for producers, especially older producers. 

1 would like to thank Congress, especially the Agricultural Committees, for repealing 

bmTower tenn limits on USDA Fmm Service Agency guaranteed loans in the 2014 Fann Bill. 

Tetm limits restricted farmer access to capital, and with the expansion of the fmm economy over 

the past ten years, there are some fmmers who are not able to obtain credit from banks like mine 

without a guaramy from USDA. The USDA ·s Fann Service Agency guaranteed loan program 

has been a remarkable success. Today, nearly $12 billion in fann and ranch loans are made by 

private sector lenders like my bank and are guaranteed by the USDA. There are nearly 43,000 

loans outstmtding- of course some farmers have more tlmn one guaranteed loan, so this number 

is not to be confused with the number of individual fanners and rm1chers, but the numbers of 

individuals accessing credit under this program is very significant. 

This program has grown over tlte past five years, with less than $9 billion outstanding at 

the close of FY 08 to nearly $12 billion today. The loans made by banks like mine under this 
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prol,,rram are modest in size. The average outstanding guaranteed real estate loan is $439,000 and 

the average outstanding guaranteed non real estate secured loan is $250,000. Clearly, we are 

reaching customers who have modest-sized operations, who are in the process of starting their 

fann or ranch operation, or who are recovering from some sort of financial set-back. Despite the 

fact that these customers do not have either the earnings or collateral to qualify for conventional 

credit, losses in the program have been extremely small. Over recent fiscal years losses have 

ranged from a high of 0.6 percent in FYI 0 to a low of 0.3 percent in FY13. These are extremely 

low losses especially for customers who are perceived to be a higher risk than other customers, 

hence the need for the USDA credit enhancement. Bankers who utilize the guaranteed farn1 loan 

programs offered by USDA know what they arc doing and work very closely with their farm and 

ranch customers to properly service these loans. The Farm Service Agency deserves a great deal 

of credit for administering snch a successful public/private partnership. We urge you to continue 

to support this very worthwhile program. 

I want to reiterate that the 2014 Farn1 Bill was very successful from a lender's 

perspective. However, there are some substantial changes from the lender's perspective that need 

to be considered as Congress starts working on the next Fann Bill. 

When the 2014 Farm Bill was written and approved, commodity prices were 

considerably higher than after implementation of the programs. As you are aware, the 2014 Fann 

Bill required that the producer make a one-time election between ARC and PLC. This become 

problematic because while producers were making the election in July 2013, corn futures were 

over $7 per bushel, with wheat futures were over $9 per bushel. Now, corn is less than $4 per 

bushel, and wheat $4.50 per bushel. This dramatic drop in prices could not be foreseen by any 

producer. 

Coupled with the drop in prices, the decision to use county yields instead of state yields 

should have provided assistance to the individuals most in need when yields were low, but this 

was often not the case. Instead, due to the variability in National Agriculture Statistics Service 

(NASS) data, two fields on each side of a county line, may have drastically different payments, 

with my customers seeing the difference as high as $90 per acre. Additionally, from a lender's 

point of view, NASS data has not been as accurate as data from the Risk Management Agency 

(RMA), which led to ditliculties in yield calculations. 
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Fehrtttl-0' .:!0 17 -- ----~--~-

While crop prices and a one-time program election were both issues, the timing of 

payments greatly impacted lenders. Payments could not be calculated until the final county yield 

was determined and the marketing year was complete. This means producers do not receive 

payments during the same year in which the crop was planted, and lenders were left to deal with 

the fallout of this timing issue. For example, we are cunently completing renewals for our fann 

customers. We look at their financial progress lor 2016 and set their operating lines for 2017. 

However, we cannot calculate 2016 payments until October of2017. From a lender perspective, 

this has caused a real problem with our regulators, as we cannot usc a payment that may be 

received a year later in the profits calculation for this year. Fmthcnnore, lenders should not be 

making educated guesses on what payment might be received. Instead, there should be certainty 

within the programs to allow for an accurate calculation. 

III. Banks Work Closely With the USDA's Farm Service Agency to Make Additional 

Credit Available by Utilizing the Guaranteed Farm Loan Programs 

As I mentioned before, the removal oftermlimits on USDA's Fann Service Agency 

Guaranteed Loan Programs was a much needed reform to the Guaranteed Loan Programs. 

However, the cunent loan limit of$1.399 million on Guaranteed Operating Loans (GOL) and 

Guaranteed Farm Ownership Loans (GFO) is simply not keeping pace with the growing cost of 

agriculture. It is much more costly for a young, beginning or small farmer to get into agriculture, 

and the guaranteed loan programs need to reflect this reality. ABA has endorsed H.R. 831, the 

Beginning Agriculturist Lifetime Employment Act of2017 (BALE Act). l11is legislation would 

increase the cap on GFOs and GOLs to $3.5 million. We believe this increase is necessary to 

ensure lenders are able to assist as many producers enter and grow into the future of agriculture. 

With any increase to Guaranteed Loan Programs, there will need to be an increase in 

funding for the programs. Unfortunately, there has been a shortage of funds for the past three 

years, so it is vital that the necessary funds are appropriated for the programs in advance. These 

programs continue to create a great public-private partnership between lenders and USDA, and 

future fm1ding should reflect tl1e strength of the programs. 
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F1.'bnil1~1· 2017 

IV. The Farm Credit System has become a Large, Unfocused Government Sponsored 

Entity at the Expense of American Taxpayers 

I mentioned earlier in my testimony that the market for agricultural credit is very 

competitive. I compete with several other banks in my service area, finance companies from all 

of the major farm equipment manufacturers, several intemational banks, credit unions, life 

insurance companies and finance companies owned by seed and other supply companies to name 

a few. The most troublesome competitor I ti1ee is the taxpayer-backed and tax-advantaged 

federal Farm Credit System (FCS). The FCS was chartered by Congress in1916 as a bon·owcrowned cooperative farm lender at a time when banks did not have the legal authority to make 

long-term farm real estate loans. Over the ensuing I 00 years the FCS has received nwnerous 

charter enhancements, and has ventured into areas that are not appropriate for a fanner-owned 

farm lending business. 

Today the FCS is a large and complex financial services business with $315 billion in 

assets. If it were a bank, it wonld be the ninth largest bank in the United States. It is taxadvantaged and enjoyed a combined local, state, and federal tax rate in2015 ofonly4.2 

percent-a rate lower than what 75 percent of American taxpayers pay. The tax advantages 

enjoyed by the FCS in 2015 was worth $1.296 billion or 28 percent of the Fann Credit System's 

net income in 20151 

Today's Fann Credit System is a large, w1focnsed Government Sponsored Entity 

presenting the same kind of potential threat to the American taxpayer as Fannie Mae and Freddie 

Mac. As a Government Sponsored Enterprise (GSE) like Fannie Mae and Freddie Mac, the 

American taxpayer is the ultimate back stop should the Fann Credit System develop financial 

problems. This reality was formalized in 2013 when the Farm Credit System Insurance 

Corporation arranged a $10 billion line of credit "with the Federal Financing Bank, a federal 

instrumentality subject to the supervision and direction of the U.S. Treasury to which the 

Federal Financing Bank wonld advance funds to the [Fam1 Credit System]lnsurance 

Corporation. Under its existing statutory authority, the [Fann Credit System] Insurance 

Corporation will use these funds to provide assistance to the System Banks in exigent market 

1 Federal Farm Credit Banks Funding Corporation; 2015 Annual Information Statement of the Farm Credit System; 

March 7, 2016. Page F-3 
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circumstances which threaten the Banks' ability to pay maturing debt obligations. The agreement 

provides for advances of up to $10 billion and tcnninatcs on September 30,2014, unless 

otherwise extended."2 TI1e agreement has been extended each year since. 

We believe the fanners who own stock ofthe Farm Credit System-and the American 

taxpayers who back it-deserve a better understanding of what transpires between the Fann 

Credit System and the U.S. Treasury, but very little infmmation is available to the public. Unlike 

the housing GSEs which are subject to refonn efforts to lessen the taxpayer's exposure, the Farn1 

Credit System seems to be increasing its dependence upon the U.S. Treasury. 

Congress created the Fatm Credit System as a public option for fann finance when 

fmmers were having trouble getting the credit they needed from non-government somces. The 

conditions that led to the creation of the Fann Credit System nearly 100 years ago no longer 

exist, and yet we continue to have a government assisted, tax advantaged fann lender providing 

credit to customers who would be able to easily borrow from taxpaying institutions like mine. In 

fact, the heavily subsidized credit that FCS lends goes to those who need it least. Despite 

amendments to the Farm Credit Act of 1980 requiring each FCS lender to have a program for 

furnishing credit to young, beginning and small farn1ers and ranchers (YBS), the share of new 

YBS loans to total new FCS loans continues to be dismal-even as the assets of the system have 

expanded enonnously. Loans to small farmers have steadily drop over the past several years with 

small tann loans declining from a high of 30 percent of total new loan volume in 20033 to just 

14.1 percent in2015. Clearly, those who would benefit the most from the taxpayer subsidized 

credit made available by the FCS are not receiving the benefits that Congress intended them to 

receive. 

Conclusion 

The banking industry is well positioned to meet the needs of U.S. fanners and ranchers. 

U.S. agriculture has begun to adjust to lower commodity prices atlcr enjoying one of the longest 

periods of financial prosperity in history. USDA projected that at year-end 2016, fann and rai1ch 

solvency ratios debt-to-asset and debt-to-equity ratios- would tise to 13.23 and 15.25 

2 Federal Farm Credit Banks Funding Corporation; 2013 Annual Infunnation Statement of the Fann Credit System~ 

Februaty 28. 2014, page 23 3 "FCA's Annual Report on the Fam1 Credit System's Young, Beginning. and Small Farmer Mission PerfOrmance: 

20 l3 Result<" Oftlcc of Regulatory Policy, June 12, 2014 Board Meeting 
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1 ,"tbnttl~i' 2017 

percent, respectively. Even as these measures have increased, each remains low relative to 

historical levels. During the past few years, while fanners expeliences unprecedented high 

commodity prices and rising farm profits, fanners used their excess cash profits to retire debt and 

to acquire additional equipment and land. As a result, fanners and ranchers today have the 

capacity to tap their equity should there be a decline in fann profitability resulting in diminished 

cash flows. While no fanner or rancher wants to take on additional debt, the strength of the U.S. 

farm and ranch balance sheet gives producers options to do so if the need arises. 

The banking industry remains cautious as it looks fmward to the next Fam1 Bill. There is 

a very real conccm that declining commodity prices will negatively affect the tlmn economy and 

make credit situations tighter. This is why the banking industry will continue to be involved in 

the Fann Bill process and will continue to offer assistance to Congress as it writes the next Fann 

Bill. With the changes that have been outlined earlier, the banking industry will continue to help 

producers remain strong into the future. Bankers still see t,'feat opportunities in agliculture and 

will stand with their partners in agriculture to develop the best Fann Bill for all. 

Thank you for the opportrmity to express the views of the American Bankers Association. 

I would be happy to answer any questions that you may have. 

·(\D. 
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Statement of Lucas Heinen 

President, Kansas Soybean Association 

before the 

Committee on Agriculture, Nutrition, and Forestry 

United States Senate 

February 23, 2017 

Good morning, Chairman Roberts, Ranking Member Stabenow, and Members of the 

Committee. I am Lucas Heinen, a soybean farmer from Everest, Kansas, and President of the 

Kansas Soybean Association. We appreciate the opportunity to appear at this first 

Congressional hearing on the 2018 farm bill. 

I understand that the conventional view in Washington is that the cost of farm programs and 

other parts of the farm bill will need to be reduced again, just as they were in the 2014 farm 

bill. This is not acceptable to producers in Kansas. Farm prices are down over 40 percent since 

2013. Soybean prices in Kansas are down from $14.40 to $9.12 per bushel in the last three 

years. Hard Red Winter wheat prices have been hit particularly hard, down from $7.56 to $3.16 

per bushel. And U.S. farm income is now expected to fall for the fourth straight year, by 8.7 

percent, in 2017. 

The anticipated cost of the current farm bill is significantly less than the level estimated by the 

Congressional Budget Office when it was enacted in 2014. While commodity program costs are 

projected to be up by $14 billion over the next ten years due to lower prices, the cost of crop 

insurance is down about $10 billion for the same reason. And the cost of food stamps, or SNAP, 

is down by $84 billion over the same ten year period due to the improved economy. 

A large number of farm organizations, including the Kansas Soybean Association and the 

American Soybean Association, have just sent a letter to the Congressional Budget and 

Appropriations Committees opposing further spending cuts in the 2018 Farm Bill. The letter 

points out that agriculture voluntarily accepted $23 billion in cuts in the 2014 bill, and that 

other sectors have made no contribution to deficit reduction whatsoever. 

As Congress looks toward writing the 2018 Farm Bill, we believe the sharp and continuing fall of 

farm prices and income since 2013 justifies increasing funding to strengthen the farm safety net 

1000 SW Red Oaks Place • Topeka, KS 68615-1207 

785-271·1030 • 877-KS-SOYBEAN (877-577-6923) • www.KansasSoybeans.org 
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Statement of Lucas Heinen- February 23, 2017- page 2 

and to make other worthwhile investments. Soybean producers have begun to identify 

priorities and they include the following: 

L First, the crop insurance program needs to be protected. For many soybean producers, 

crop insurance is their most important risk management tool. 

2. Second, most soybean, corn and wheat producers in Kansas signed up for the county 

ARC program. While support under ARC has declined with the lower prices and revenue 

we've had in recent years, Kansas farmers want to see this program continued in the 

next farm bill. We do need to change the yields used under the program from NASS to 

RMA data, when available, to minimize county to county discrepancies. This could incur 

some additional cost, but it would make this important program more accurate and 

defensible as an option in the next farm bill. 

3. We support funding of current conservation programs, including EQIP and the 

Conservation Stewardship Program, at their authorized levels. We support raising 

annual funding for agricultural research under AFRI to the full authorized level of $700 

million. And we support continued authorization and funding for Energy Title programs, 

including the Biobased Market Program, the Bioenergy Program for Advanced Biofuels, 

and the Biodiesel Education Program. 

4. We strongly support doubling mandatory funding for the Foreign Market Development 

program and the Market Access Program to spur promotion of U.S. agricultural exports. 

Funding for these programs has been frozen for over ten years while our foreign 

competitors are massively outspending us on market promotion. 

We are aware that other crops have issues that need to be addressed, and which may add to the cost of 

the bill. It is important for farm organizations to work together to achieve legislation that everyone can 

support. Soybeans will continue to lead this effort, and to oppose proposals from farm bill critics on 

both the left and the right to weaken or eliminate programs that are important to producers. 

In closing, Mr. Chairman, I would note the importance of keeping programs that support 

farmers and programs that support consumers together in the next farm bill. There is a 

relationship between the need to provide assistance to those who produce food and those who 

consume it, when either needs that assistance. This bond explains how Congress has been able 

to come together and enact farm bills for over 40 years. 

Thank you again, Mr. Chairman, for the opportunity to appear today. I'm happy to answer any 

questions. 
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Testimony of Tom Lahey 

Vice President, Kansas Cotton Association 

before the 

Committee on Agriculture, Nutrition, and Forestry 

U.S. Senate 

Manhattan, Kansas 

February 23, 2017 

Introduction 

Chairman Roberts, Ranking Member Stabenow, and Members of the Committee, thank you for 

the opportunity to provide this testimony regarding the current farm bill and the policy needs 

of the U.S. cotton industry in the next farm bill. 

My name is Tom Lahey, a fourth generation farmer and rancher from Moscow, Kansas. I raise 

cotton, wheat, corn, and grain sorghum, the majority under pivot irrigation, and have a cow-calf 

operation. Nearly 20 years ago, I was one of the first two farmers to grow cotton in southwest 

Kansas. In 2002, we built the first cotton gin in Kansas, Northwest Cotton Growers Inc. (NWCG), 

in the western part of the state. 

I serve as vice president of the Kansas Cotton Association, and I am a producer delegate to the 

National Cotton Council (NCC). NCC is the central organization of the United States cotton 

industry. Its members include producers, ginners, merchants, cooperatives, warehouses, textile 

manufacturers and cottonseed processors and merchandisers. 

Current Industry Conditions 

As you know, the current economic situation for much of production agriculture is bleak, 

including for U.S. cotton farmers. The passage of the 2014 Farm Bill coincided with significant 

changes in the global cotton market. Shortly after the bill was approved, cotton prices began a 

significant decline, the result of a build-up of global cotton stocks, especially in China, 

decreased demand, and reduced exports. This led to the lowest U.S. cotton acreage for 2015 in 

over 30 years. While cotton prices and acreage have increased from the lows experienced in 

2015, producers are still struggling with prices at levels not adequate to cover all production 

costs. 

To understand the challenges facing cotton farmers, it is important to review the dynamics at 

work in global cotton demand. USDA estimates world mill use at 112 million bales for the 

current 2016 marketing year. However, even with very modest growth, world cotton demand 

remains almost 13 million bales below the peak demand observed in 2006. Slumping demand 

is largely the result of the tremendous increase in polyester use. During the 2006-2015 period 
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when cotton mill use fell by 13 million bales, polyester's production capacity, primarily located 

in China, increased by 145 million bales. Excess production capacity, in many cases fueled by 

government support, is contributing to polyester prices in Asian markets of approximately 55 

cents per pound. While consumers continue to express their preference for cotton products, 

the tremendous increase in low-priced polyester production has created extraordinary hurdles 

for increasing cotton demand. 

I highlight these issues because of the critical influence of international markets in the financial 

conditions of U.S. cotton farmers. In recent years, approximately 75% of U.S. cotton production 

enters export channels. Policies that directly affect international production, consumption and 

trade have a direct bearing on U.S. market prices. 

For 2017, NCC is estimating 11 million acres of cotton plantings, with 45,000 acres in Kansas, a 

42% increase from 2016. This increase in Kansas is reflective of several factors, including the 

availability of seeds with a trait that provides tolerance to 2,4-D herbicide, the yield potential of 

cotton coupled with minimal water use requirements, and the relative returns compared to 

other crops. 

Cotton Policy and the Farm Bill 

While cotton acres across the U.S. are expected to recover, a major concern still exists since 

cotton is not eligible for the same price and revenue policies as other crops. As you know, 

these Title I policies in the farm bill are designed to help producers withstand periods of price 

declines and depressed market conditions. While the ARC/PLC policies have generally 

performed well for me and other producers in responding to the market downturn we are 

experiencing in crops like wheat, corn, grain sorghum, and soybeans, I continue to be largely 

exposed on cotton since it was excluded from these types of programs. Under the current farm 

bill, cotton has access to the Stacked Income Protection Plan (STAX) crop insurance policy and 

the marketing loan program with an adjustable loan rate based on prior year market prices. 

Cotton is the only traditional 'program' crop that does not have any long-term price or revenue 

protection policy in the 2014 Farm Bill. 

Cotton policy in the 2014 Farm Bill was largely dictated by a World Trade Organization (WTO) 

trade challenge brought by Brazil against components of U.S. farm policy and some cotton 

policy specifically. This resulted in cotton having to rely largely on STAX as the core safety net 

for cotton. But just like any revenue based crop insurance policy, STAXis not equipped to 

address periods of extended low prices, which is exactly what cotton producers experienced 

beginning the year the farm bill was approved. 

For more than a year, the NCC has been working with Congress and the previous Administration 

to try to get cottonseed designated as a covered commodity and be eligible for the ARC and PLC 

programs in the farm bill. Cottonseed remains an important co-product of cotton production, 

along with the cotton fiber. Our industry believes support can be provided for cottonseed 

without running afoul of the agreement with Brazil that settled the WTO case. We strongly 
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believe we need to get a cottonseed policy in place to help provide support to our producers as 

a bridge until the new farm bill is enacted, which will hopefully be by the 2019 crop. 

NCC is beginning internal discussions on cotton's policy objectives for the new farm bill. We 

know that a meaningful safety net for cotton must be included in Title I of the farm bill. Better 

protection in times of depressed markets can take on several forms, and our industry will 

continue to pursue the best avenue to provide growers adequate protection for the revenue 

generated by both cotton fiber and cottonseed. 

In order for Congress to be able to address the current shortcomings in U.S. cotton policy and 

to shore up other areas of need in farm policy, we strongly oppose any attempts to reduce the 

budget for the next farm bill. Further, we urge the Committee to seek any opportunities to 

increase the Federal investment in farm policies that ensures the U.S. consumer continues to 

have the safest, most affordable and secure supply of food and fiber in the world. In the 

January 2017 Congressional Budget Office baseline projection, the cost of the current farm bill 

is expected to be more than $100 billion less than estimated when the bill was enacted in 2014. 

Given this significant decline in farm bill spending, coupled with the significant downturn in 

farm income and generally weak commodity prices, a greater investment in these critical 

policies for all of rural America should be in order. 

In addition to a meaningful safety net, our industry relies heavily on a properly functioning 

marketing loan program, so maintaining that policy, with minor adjustments, is also a priority. 

Maintaining a strong crop insurance program is also critical since in agriculture, one thing is for 

certain, crop losses will occur in some part of the U.S. each year. Annual losses incurred by 

farmers clearly demonstrate the need for crop insurance protection and the public-private 

partnership of program delivery. Farmers, ranchers, their lenders, input suppliers and other 

stakeholders agree that crop insurance protection should remain a viable, affordable tool for 

managing risk. 

In 2016, 96% of cotton acres were covered by either multi-peril "buy-up" insurance or 

catastrophic coverage. 88% of these acres were covered by multi-peril insurance. The STAX 

policy was purchased on over 2.5 million acres covering 26% of total insured acres. 

In 2016, crop insurance was purchased on 84% of cotton acres in Kansas and 79% of those acres 

are covered with multi-peril insurance. Unfortunately, STAX coverage has been used in very 

limited amounts on Kansas cotton acres. While there are likely several reasons for this low 

level of participation, it is imperative that cotton producers have access to the same 

complement of risk management policies and tools as other producers, including commodity 

policies in Title I, along with crop insurance. 

Federal crop insurance provides an effective risk management tool to farmers and ranchers of 

all sizes when they are facing losses beyond their control, reduces taxpayer risk exposure, 

makes hedging possible to help mitigate market volatility, and provides lenders with greater 
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certainty that loans made to producers will be repaid. The public-private partnership of 

program delivery works very well, allowing for timely and outstanding service to producers 

when they need it the most and providing much-needed jobs across rural America. 

While the insurance program is working well and should be defended, there are a few areas 

that can be improved. NCC is currently working with the Risk Management Agency (RMA) to 

improve quality loss provisions that have proved inadequate for many producers in the 

Southeast region who suffered through extensive rains during the 2015 and 2016 harvest 

seasons. RMA has been a good partner in identifying and pursuing improvements to this 

feature of the product. Another area that is particularly important here in the Southwest 

region that was allowed in the 2014 Farm Bill is the ability to insure Enterprise Units by 

practice. In our view, the RMA has not implemented this provision in the way intended by 

Congress and should be reconsidered by USDA, and if necessary, further clarified in the next 

farm bill. 

Our industry will work to prevent any further tightening of payment limits and eligibility 

requirements, as we believe these policies are already too burdensome and restrictive in light 

of the size and scale of production agriculture necessary to be competitive and viable in a 

today's global market. 

In addition to the above policies discussed for upland cotton, there are important policy 

considerations for Extra Long Staple (ELS) or Pima cotton as well. The industry is evaluating the 

potential for an increase in the loan rate for the ELS loan program to better reflect the relative 

market value of Pima cotton. Since this is a non-recourse loan without marketing loan 

provisions, there should be little, if any, additional government cost or exposure. Also, the ELS 

Cotton Competitiveness Program is not currently functioning as intended given the recent shift 

in the countries that are major producers, importers and exporters of ELS cotton. For the 

intended objectives of this program to be met, USDA needs to take steps to update the key 

price data being used. 

Conservation programs continue to be extremely popular across the Cotton Belt. Specifically, 

the Environmental Quality Incentives Program and the Conservation Stewardship Program are 

both heavily accessed. I commend the Committee for streamlining conservation programs in 

the 2014 Farm Bill. I believe this will make them easier for NRCS to administer, but more 

importantly easier for producers like myself to utilize. These programs have become integral 

parts of many producer's operations and achieve the goal of improving and protecting the 

environment while also improving our farming operations. 

Between 1997 and 2008, the amount of cotton used by U.S. textile mills experienced a 

precipitous decline, falling from 11.3 million bales down to 3.5 million bales. Since 2008, the 

U.S. textile industry has stabilized, however there has been a slight decrease in domestic mill 

use for the current marketing year at 3.3 million bales. 
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The recent years of stability and expected future growth can be attributed to the continued 

benefits of the Economic Adjustment Assistance Program (EAAP), first authorized in the 2008 

Farm Bill. Recipients must agree to invest the proceeds in equipment and manufacturing plants, 

including construction of new facilities as well as modernization and expansion of existing 

facilities. EAAP funds have allowed investments in new equipment and new technology, thus 

allowing companies to reduce costs, increase efficiency and become more competitive against 

imported textile products. By allowing U.S. textile mills to make the new investments 

necessary to remain competitive, the program supports a manufacturing base that is keeping 

jobs in the United States. 

Given the tremendous reliance by our industry on exports of raw cotton fiber and yarn, it is 

essential that the U.S. agriculture industry have a strong, well-funded public-private partnership 

to help leverage private resources to expand export markets and grow demand for U.S. 

agriculture products. A central part of this effort is USDA's Market Access Program (MAP) and 

Foreign Market Development (FMD) program. Even though the U.S. continues to be heavily 

outspent by other major agricultural producing and exporting countries, MAP and FMD 

investments have not increased in more than a decade. For this reason, we believe it is justified 

for the new farm bill to invest additional funds in these programs. 

Conclusion 

In closing, for the past three years, U.S. cotton producers have struggled with low cotton prices, 

high production costs and the resulting financial hardships. While current cotton futures 

markets have increased from year-ago levels, many producers continue to face economic 

challenges. The projected increase in cotton acreage is largely the result of weaker prices of 

competing crops and improved expectations for water in some regions that were experiencing 

severe drought conditions. As such, it is imperative that the next farm bill bring cotton back 

into the Title I commodity policy so that cotton is able to access the full complement of risk 

management tools as other crops. 

NCC looks forward to working with the Committee, the other groups and commodities 

represented here today, and all commodity and farm organizations to develop and pass a new 

farm bill that effectively addresses the needs of all commodities and producers in all regions of 

the country. 

Thank you for this opportunity to present testimony, and I would be pleased to respond to any 

questions. 
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Chairman Roberts and Ranking Member Stabenow: 

let me be among the first to welcome you to the Big First Congressional District of Kansas, our nation's 

largest agricultural-producing district. 

You are now in the leading state for wheat and sorghum production, the largest district for beef sales 

and home of the fastest growing dairy industry- a fitting place to launch a review of our current farm 

programs and discuss solutions for the upcoming 2018 bill. 

You are also at ground zero for the challenges facing America's farmers and ranchers. The hurt in farm 

country is real. I'm confident that today you will hear from folks in the trenches of this current economic 

downturn. I'm looking forward to hearing their ideas and solutions to take back to Washington. 

For me, the downturn in the ag economy we all hear about becomes very real when I see the Kansas 

Farm Management Association reporting that net farm income in Kansas was less than $6,000 in 2015. I 

can't imagine trying to live and raise a family on that income level. We know those levels will fall when 

they are reported for 2016, and unless something changes, they will be even lower for 2017. 

I know today's hearing is focused on the 2018 Farm Bill, but I want to instill this: we can't make farm 

policy in a vacuum. Monetary, trade, regulatory and economic policy all impact our producer's bottom 

lines just as much as the programs we'll be discussing today; perhaps, none more so than trade. A 

robust agricultural trade agenda would work hand-in-hand with our safety net programs to provide 

revenue from the m?rketplace, and opportunity for our producers to succeed. 

While I don't have all the answers or any silver bullets for our current crisis, I am committed to working 

with my colleagues across the aisle and across the Capitol as we begin to write the 2018 Farm Bill. It is 

my hope that we can identify the areas where the 2014 bill fell short, correct them, and ensure we have 

farm, food and nutrition policy that works for our farmers, ranchers and consumers. 
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1320 Research Park Drivt> 

1\bnhattan. Kansas 66502 

564-6700 

Jackie "\cCbskev. Secretary 

Written Statement for 

900 SW Jackson. Room ·156 

Topeka. Kansas 66612 

296-3556 

Gow'rnor Sam Brm\·nback 

The Hearing from the Heartland: Perspectives on the 2018 Farm Bill from Kansas 

By Jackie McClaskey, Kansas Secretary of Agriculture 

February 23, 2017 

On behalf of the slate of Kansas, I'm pleased to welcome you today and I'm glad to see so many people in attendance lor 

this very important event. It is particularly meaningful to host this first Fmm Bill hearing light here at Kansas State 

University, the first land-grant university, which still prides itself on leading the \vay in preparing the next generation of 

agriculture leaders< 1 am especially happy to welcome Senator Pat Roberts, a K-State graduate. a loyal Kansan and a 

respected advocate f()l- the agriculture industry. Kansas is fOrtunate to be represented by a leader of this caliber who 

understands and respects the importance of agriculture. Senator Roberts has spent more than 30 years serving the needs of 

Kansas, first in the U.S. House of Representatives and then in the U.S. Senate since ! 996. Senator Roberts was the first 

member of Congress in history to have chaired both the House Agriculture Committee and now the Senate committee. His 

position as Chainnan ofthc Senate Agrkulture Committee gives him a tmique opportunity to be a voice for American 

agriculture. 

Today provides an opportunity to look at the future of agriculture as it is addressed through the Fann BilL and T appreciate 

that opportunity. As I do so, however, 1 want to go well beyond the subject oft he Farm Bill itself, and share with you an 

update on the significant efforts being made here in Kansas as we work to grmv abrriculturc. Our focus is on strategic 

growth, and \vhile much of that requires work at the !ocal1evel, it also highlights the critical need for federal partnerships 

on many levels and on many issues. I want to address some ofthose places where federal partnerships can make a 

significant difference to the farmers, ranchers and agribusinesses of Kansas. 

Agriculture is Kansas' largest industry. employer and economic driver. Sixty-six agriculture, food and food processing 

sectors combine to provide nearly $65 billion in total economic ~onttibution to the state, approximately 43 percent of the 

total economy. The industry employs over 234,000 people, nearly 13 percent of the Kansas worklorce. lffood retail is 

included, the economic contribution rises to over $74 billion, about 50 percent of the state economy, and employs nearly 

20 percent of the workforce. 

ln Kansas, there are 46,137,295 acres of land. Farmland accounts for 88.9 percent of ail Kansas land. More than 21 

million acres in Kansas are harvested for crops and over 16 million acres serve as pasture land for grazing animals. In 

addition to growing crops and raising livestock, the Kansas agricultural sector includes rene~rable energy production, food 

processing. research and cducntion, a_b:rrlbusiness, technology entrepreneurship, and many vatuc~addcd enterprises. 

Betwe-en Columbia, t-.fissouri, and Manhattan, Kansas, sits the single largest concentration of animal health interests in the 

world. Kansas fanners and ranchers make a global impact. In 2015, Kansas exported more than S4.1 billion in agricultural 

products. The top tivc exports include wheat, beef and veal. soybeans, tCcd and forage, and com. 

Kansans embody the pioneer spirit that brought their foreH1thers to an uninhabited prairie to seek their fortunes in a new 

land. The values ofhm·d work and achievement have stood the test of time in Kansas. The same pioneer spirit that 

converted Kansas from a vast sea of grassland into a major producer of our nation's food supply lives on today as we seek 
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new opportunities and relationships to improve the largest industry in our state. Kansans arc known for their work ethic, 

valuing education and exhibiting a willingness to persevere through challenges. 

In the light of depressed commodity prices, Kansas fanners, ranchers and agribusinesses face an abundance of challenges, 

but industry leaders clearly expressed the need to continue to look forward and plan for short- and long-tenn expansion of 

the state's agriculture industry. As the nation's agriculture industry positions itself for growth in order to meet the needs 

of a growing population with changing demands, Kansas is well-suited to be a home for that growth. Kansas has the right 

leaders and priorities and the right tools and resources to be a nationwide leader in agricultural growth. 

The success of the Kansas economy is directly linked to the success of the agriculture industry. We know that to grow the 

Kansas economy, the agriculture industry must grow. Strategic industry gruwth requires communication, coordination and 

collaboration, so Kansas agricultural leaders have begun the process of developing a strategic growth plan for all sectors 

of agriculture, based on the opportunities in and the barriers to economic brrowth. In August 2016~ the Governor's Summit 

on Agricultural Growth was held in Manhattan, Kansas, bringing together nearly 400 leaders from across industry sectors 

under one roof to talk about barriers, challenges, opportunities, growth goals and next steps. Feedback from that Summit, 

a~ong with input ffom one-on-one meetings with industry leaders, ha..;; been compiled and utilized to develop desired 

objectives and action plans for each agricultural sector in Kansas. While some of these outcomes simply require 

government to Jet industry work and function, there arc some that have a role for state government and some that will 

require cooperation with our partners in Congress and within federal agencies. Progress reports and continued focus on 

the future "ill take place at the next Summit, which will take place in August 2017. 

As we look toward future growth opportunities for Kansas agriculture, we are fortunate to have a strong foundation on 

which to stand. Kansas was built on a va1ues system of family, hard work, faith and entrepreneurship. Those values 

continue to be integrated into a pro-growth, pro-business~ pro-agriculture culture. This small-town, family environment, 

combined with an innovative, proactive nature, is evident across the state. Maintaining that approach will require partners 

on a federal level. both in Congress and in the administmtion, who share the desire for pro-grmvth, pro-business policy. 

Kansas is naturally suited for effective and efficient agricultural production. The semi-arid climate offers abundant 

sunshine. available moisture and itTigati.on and reasonable humidity, making for good growing seasons and harvesting 

conditions. Kansas takes pride in providing some of the best roads and rail systems in the nation. These transportation 

systems provide easy access to markets and make moving people and goods in the state simple and inexpensive. 

The foresight of agriculture leaders has resulted in state-level regulatory standards and legislation that make Kansas a 

great place to fann. ranch and run a business. Environmental standards allow production agriculture and environmental 

preservation to work hand-in-hand. Kansas legislation protects animal agriculture against threats from activist groups 

focus~d on dismantling the industry because Kansas is not a ballot initiative state. Busincss-ftiendly tax exemptions, longstanding property tax policy, being a Right to Work state, and a business-friendly regulatory culture make Kansas "'open 

for business." 

Kansas is the home to Kansas State University- the 1irst land-grant university in the U.S.- and Fort Hays State 

University. These institutions, along with the other Regents universities. community colleges and technical schools, are all 

key partners in growing the workforce needed to serve Kansas agricu1ture. in addition, career and technical education at 

the high school level, especially agricultural education programs, are growing and prospering. 

The long-tenn availability of water in Kansas is dependent on loeallcadership, responsible use, management and policy 

development. In 2013, Kansas Governor Sam Brownback issued a call to action to develop a long-tenn plan for water in 

Kansas, which was followed by a comprehensive statewide effort to seek input throughout the state and to craft a plan. 

The resulting Vision fhr the Future of Water Supply in Kansas and the development of innovative water policies focused 
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on individual management and local control are helping extend the life of the Ogallala aquifer and the reservoir system to 

allow for long-tenn sustainable growth. 

As the Kansas agriculture industry works toward economic expansion, we know that growth has barriers as well. Fanners, 

ranchers and agribusinesscs must balance a lengthy list of challenges and variables, many of which they cannot control, as 

lhey work to grow and raise food for families across the globe. The variability of agriculture is inevitable. \Veather 

extremes, volatile markets, diverse consumers, and lawmakers and regulators with less understanding about agriculture 

are factors the agricultural industry confronts and manages through on a daily basis. The role of the Kansas Department of 

Agriculture is to serve as a partner to the industry, eliminating unnecessary, overly burdensome, or outdated barriers to 

growth, and fOstering an environment that encourages and welcomes expansion of the industry. Some of those challenges 

and opportunities can be addressed in the 2018 Farm Bill. 

Kansas is poised to work collaborativcly to help cratt quality legislation aimed at serving our tanners and ranchers. 

Several specific items related to the Farm Bill and other federal issues and barriers were identified during the process of 

developing sector-specific desired outcomes for the state's strategic growth project. and those are listed in the attached 

document. They were based on direct input from stakeholders in the industry in one-on-one meetings and at the Summit 

Continuing to maintain a regulatory environment at the state level dc::;igned to help agrlculture rather than hinder it, while 

looking for ways to improve and streamline state systems, is a must to further !,rrowth. More irnp01iantly, state govemment 

and industry must work together with the state's congressional leadership to push back against and, when possible, 

dismantle ovcr~rcaching, excessive, burdensome federal regulations targeted against agricuJture. We arc encouraged with 

initial actions taken by the Trump administration to reduce regulatory challenges and we will seek opportunities to work 

with the administration to eliminate barriers to growt11 that are due to overly burdensome and unnecessarily costly 

regulations or those that impede businesscB or innovation in agticulture. 

As spring planting approaches and as wheat begins to exit its stage of winter dormancy, Kansas farmers, much like 

fanners across the cmmtry, are enteting into the fourth consecutive year of the current downturn in the agricultural 

economy. Average net tium incomes have plummeted from record levels of nearly $160.000 to less than $5,000 in 2015, 

'With negative incomes predicted tOr 2016 and 2017. These levels have not been seen since the early 1980s. It is in times 

like these that risk management tools, including Title I commodity programs and federal crop insurance, need to kick in to 

provide the safety net they were designed to deliver. 

Animal agriculture represents the largest segment of the Kansas agricultural industry, so a threat to animal health would 

be devastating to the Kansas economy. Foreign animal disease preparedness is a priority for the state. KDA has the lead 

responsibility within Kansas for an agticultural emergency response, and we intend to be the best prepared state in the 

country In the last seven years, Kansas has held five major animal disease exercises, each involving more than 250 

participants and including players from the county, state and federal levels, as well as from university and industry 

organizations. It is clear from these exercises that an effective animal disease response requires a realistic, executable plan 

that involves federal coordination of state responses and federal resources based on state needs and state implementation. 

We are avvare of the efforts being made to enhance availability of vaccines to address disease outbreaks, but vaccination 

f\mding should not be seen as a silver bullet. Throwing money at vaccine development does not address the practical 

challenges related to dissemination, or the response time lost while vaccines are being prepared. Additionally, the fact that 

the proposed amount of vaccines is clearly not enough if it is to be used in all species, and the potential problems with 

reopening intemational market access have not been fully considered. Serious discussion needs to occur among state and 

federal leaders, in addition to animal health ofticials, to develop a more realistic plan and approach. Vaccine is cutTently 

being sold as ''"the solution" and circumstances dictate that in a real situation it ''"ill be only one tooL We know the best 

\vay to stop the spread of the disease is to stop movement, so our approach in Kansas is very different from other states 

and fi\)m what is recommended by USDA: As soon as there is a presumptive positive FMD case, were stopping 
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movement W c have seen the importance of stopping movement as well as traceability, and believe these clements are ke} 

to disease control, hut they \Vill only work if all affected states are working in concert. These arc challenges we arc 

continuously working to address both internally and with partners in industry, other states. and the federal govemment. 

As the National Bio and Agro-Defense Facility (NBAF) continues consbuction in Manhattan, it reinforces the animal 

health sector in this region and confinns the state's prominence in the animal health and bioscience sector. This facility 

will strengthen our nation's ability to respond to animal disease events, and we support all efforts on a federal level to 

prioritize animal health, including conducting research, developing vaccines, diagnosing emerging diseases, training 

vctcrinariam:~, and developing countenneasurcs against large animal foreign animal diseases and zoonotic diseases. 

Consumers across the state, nation and globe want to know more about where their food comes from and the story of the 

people who raised it. The agriculture industry must work together to provide an increasingly open and transparent food 

system that meets the need.<; of consumers and creates value-added benefits for farmers and ranchers. \Vhile these 

demands for a transparent food system can present a challenge to the status quo, this demand is also an opportunity to 

work with our partners in the industry to develop a volru1tary traceability system that not only serves to enhance consumer 

confidence and !Just but also to manage a disease outbreak, protect food safety, and potentially, provide opportunities to 

access export markets. We are prepared to move forward with federal partners to progressively address the feasibility of a 

national ttaceability system. 

Robust support for agricultural research and extension is critical to the vitality of agriculture, both in Kansas and across 

the United States. As previously mentioned, Kansas State University is the nation's first land-grant tmiversity and it is an 

important partner in our state's agricultural industry. The research that is done at K-State leads to advancements in 

precision agricultural production practices. food safety, animal care, efficiency, and more. \Ve know that research and 

development in agriculture are key to &,rrowing the industxy, and we support expanded research in areas important to 

agriculture in Kansas, and continue to look for public/private partnerships which will advance this research. 

Kansas is blessed \vith abundant natural resources, and it is necessary to continue to build ptivatc~public partnerships to 

protect and conserve the state's water supply and be good steward<;; of the land. We have seen success with voluntary 

conservation programs that arc locally driven and provide flexibility to water users, and we support increa...;;cd investment 

in those programs. Kansas has a track record of progressive and innovative protection of the important waters of the state, 

whether under federal jurisdiction or not, noting that not all waters are equally important \Ve are among the nation's top 

states in terms of sediment reduction and phosphorus reductions through best management and conservation practices. 

'We have promoted federal poUcies which encourage conservation without penalizing qualification for crop insurance. We 

commend USDA Risk Management Agency for dcvc1oping limited irrigation crop insurance coverage optiDns for com 

and soybean in counties over the Ogallala aquifer in Kansas. Allowing for states' acbninistrativc discretion without 

ubiquitous, counter-productive federal oversight, ensures the ctitical waters of the state, as well as the nation, will be 

protected. 

We know that growing agriculture in Kansas means we need access to more markets around the globe. Access to 

in1en1ational markets and expanded global market share is critical to nearly all agriculture sectors in Kansas. Publicprivate partnerships focused on gaining additional market access, along with national leadership in trade negotiations and 

pattncrship, are necessary for sustainable agricultural growth. During the past 12 months, while domestic commodity 

prices were tow, exports of agricultural products were a hlgh point in the industry. Expanding market access and 

increasing food and agricultural exports not only boosts farm receipts but create jobs here at home. We suppott efforts to 

open new doors for ttade through bi-lateral and multi-lateral trade agreements that seek to level the playing field by 

eliminating tariff and non-tariff barriers to trade, and will continue working to build international relationships through 

focused trade missions. 
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The prosperity of UbTficulture is closely linked to the prosperity of rural communitk:s. Continuously improving 

infrastructure in rural areas, ·whether that means rail access, rural housing, or broadband and mobile networks, is critical to 

rural development Grants and other programs which support rural business development have been instrumental in 

providing opportunities for individuals~ businesses and the state to prosper. 

A challenge facing all of us in agriculture is ensuring we have an adequate workforce to meet our industry needs. In 

addition to leaders and innovators, it is essential to have a workforce that includes people willing to work in production 

and processing 13.cilities, and the federal govemment must be a viable patincr to meet that need in the workfOrce. Another 

potential source of workers we are interested in utilizing is our nation's heroes. More than two million veterans arc 

transitioning out of active duty and looking to identify opportunities to make a living, and many of them have shown an 

interest in agriculture. This is an opportunity in Kansas and around the nation to address workforce challenges in the 

agriculture industry. Meeting \~lorkforce and talent demands in agriculture means we have to think creatively to identify 

willing. interested and capable employees fOr our farms. ranches and agribusinesses. 

Though it's been just a few years since the 2014 Farm Bill \Vas enacted, it has been anything but a quiet three years for the 

industl)'. Since 2014, fanners and ranchers across the nation have experienced droughts, floods and tires. TI1ey have seen 

markets at their highest point and they have experienced fast declines in commodity and livestock prices. This diverse, 

rapidly changing, incredibly important Industry is vital to the nation's economy and security. Agriculture is critical to the 

nation's food supply, natural resources, and public health and safety, and the decisions made today carry great weight as 

\VC preserve the future of American at,Yficulturc. 

Despite the complex challenges facing the Kansas agriculture industry, the strength and commitment of the farmers, 

ranchers and agribusinesses of Kansas \vill continue to carry agriculture into the future to grow and thrive. As tl1e state 

agency that supports this complex industiy, the Kansas Depattment of Agriculture is committed to our Vision, Kansas -..vill 

provide an ideal environment for long-term, sustainable agricultural prosperity and statewide economic growth. Through 

our collaborative efforts with industry organizations, academic institutions, and state and federal lawmakers, \Ve know this 

Vision can become a reality. 

The Kansas agricultural community has appreciated the many relationships that have been developed with our federal 

partners. We look forward to continuing those relationships and creating opportunities for new partnerships as we work 

together for a strong and prosperous future fOr agriculture. 
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s /\ s 

RN 

Testimony of Kent Moore, !uka, KS 

Ou behalf of the Kansas Corn Growers Association 

Before the U.S. Senate Committee on Agriculture, Nutrition & Forestry 

February 23, 2017 

Manhattan, KS 

Thank you tor the opportunity to speak at this hearing. My name is Kent Moore. I farm in Pratt County. J 

serve on the board of the Kansas Com Growers Association and l am also Chainnan of the Kansas Corn 

Commission, the state's corn checkoff. While the checkoff works to increase the profitability of corn 

through market development, research, promotion and education, the association is involved in policy and 

regulatory issues. Today. I am honored to appear on behalf of the Kansas Com Growers Association. 

1 atu the fifth generation of my family to farm in northwest Pratt County. We typically grow over 3,000 

acres of ilTigated com and 750 acres of dry land com. We also nonnally grow 500 acres of inigatcd 

soybeans and 850 acres of dryland wheat. Our farm is located in the area covered by Big Bend 

Groundwater Mtmagement District #5. GMD 5 was an early adopter of safe yield criteria to manage the 

long-tenn sustainability of the region's water resources. And I believe that strategy of water resource 

management has been successful in my farm's capacity to produce crops to feed and fuel our state and 

nation in a responsible manner. 

Kansas is a unique state because most of our farms are diversified. There are few Kansas tanners who 

grow only one or two crops. Kansas tanners grow corn, wheat, soybeans, sorghum and other crops. Many 

of our grain fanns also have livestock. Because of this, our association continually advocates for 

cooperation among our commodity groups, especially in the formulation of the farm bill. Our national 

organizations haw indicated an unprecedented level of cooperation among farm groups in initial 

discussions, and we hope that cooperation continues. ln a time when a large part of the agricultural sector 

is in an economic decline, it will be necessary and benc!!cial to have a united effort. 

The last fann bill was \\1·itten in a time of high prices. '!11is one will be writlen in a time of low prices. 

We've been blessed with bumper crops. More than ever, our tanners need a strong safety net to protect 
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production and revenue, and we need robust federal support for programs that expand and develop export 

markets for our grains, meats, fibers and fuels. 

As the 2018 farm bill begins to take shape, you'll hear from a lot of tarmers. But you 'II also hear from 

many well-funded groups including budget hawks, environmental groups and anti-agriculture groups that 

will villainize the needed safety net the fam1 bill provides. Members of the Senate Ag Committee know 

this, but it bears repeating that the fmm bill represents a miniscule part of our nation's budget, a11d 

commodity programs represent a miniscule part of the Fann Bill. The bulk of the funding in the Farm Bill 

is found in the nutrition title, and we strongly support keeping nutrition in the farm bill. It is key to the 

bill's passage. But we all know, our nation's budget woes can't be fixed with agriculture's small part of 

the overall farm bill. 

The crop insurance progra111 will be attacked by special interest groups dming the fam1 bill process. I 

wonder if anyone umlcrstands the need for a solid crop insura11cc program more than the Kansas farmer. 

Drought, hail, wind and floods can ravage fanns and sometimes Kansas farmers can experience all of 

these disasters in the same year. Unlike car insurance, crop insurance protects us against systemic risk 

Every year, we hope we don't collect a crop insura11ce payment, but when we do have a loss, crop 

insurance provides critical support to farmers and the rural communities that serve agriculture. 

Kansas farmers benefit from the revenue protection programs, ARC and PLC, in the current fatm bill. In 

times of high crop prices, we saved the govcmment billions of dollars in fann program payments. We 

won't get credit for that. When prices are low, critics are quick to point out the cost of these safety nets. 

While our groups work to build domestic and export markets to increase the value of our crops, 

commodity pricing remains virtually out of our control. The ARC program in particular has been an 

excellent tool for Kansas fanners, and we'd like to see it continued and improved. Some Kansas farmers 

who chose the ARC program have been hurt financially due to data gaps. We believe these inequities 

could be fixed in the current farm bill, without reopening it, by allowing the state FSA more flexibility in 

yield data. As we look to the 2018 limn bill, we support continuation of revenue-based progrmns and 

improved implementation of those programs. 

When I speak of the need to provide a safety net for agricultme, I'm not only speaking for the com 

b'~'OWers, I am speaking for our state's economy. Agriculture is our state's top economic driver. Our 
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industry is volatile, and without a strong safety net, it's impossible to predict what would happen to our 

state's economy. 

Farms aren't just rows of crops. Our farms are what makes the Kansas economy tick Our com fuels 

livestock feeders, dairies, ethanol plants, grain elevators, trucking and rail companies, implement dealers 

and many other ag-related industries that directly employ many thousands of people in our state. Our 

com, and other ag products also create an economy and tax base that funds our local schools, hospitals 

and highways. Fanners and others with careers in agricultnre eat at our local restaurants, shop at the local 

grocery store, buy cars, pickups and fannmachinery. We serve on the school board, the church 

committee and volunteer in our communities. 

The growth potential for ag exports is greater than any other demand sector today. We believe it is time to 

increase our efforts to provide access to these growing markets around the world. We've produced 

bumper crops, and we need the ability to aggressively pursue trade to sell American grains and American 

meat to other countries. Programs like MAP and FMD are critical in building export markets for our ag 

products, but these two programs have had stagnant funding levels for a number of years. We support the 

efforts of the agriculture trade community to increase funding for MAP and FMD. Over the years, the 

effective spending power of these programs has decreased by over 40% due to factors like sequestration, 

administrative costs and inflation. Our fanners, through their checkoff, support the US Grains Council to 

develop exports of com, ethanol and DOGS. Our checkoff dollars also support efforts to build expo11 

markets tor red meat through the US Meat Export Federation. The MAP and FMD programs make our 

fanners' investment of checkoff funds for foreign market development efficient and effective. 

Many of our state's ethanol plants that provide a needed market for com today were started and funded by 

Kansas farmers who sought new markets lor their corn and sorghum. Today, our grain surpluses are proof 

that we can provide more than enough com for feed and fueL Our ethanol plants provide a key market for 

our grains, clean domestic fuel for vehicles, and a desirable feed for livestock. Ethanol plants in Kansas 

have been a key factor in improving the lives of many rural Kansans. Located mainly in rural 

communities, our twelve Kansas ethanol plants produce nearly half a billion gallons of fuel per year. How 

can the fatm bill help ethanol'! One way is through increased funding of MAP and FMD programs. 

Expm1s are becoming increasingly important to the ethanol industry. Ethanol and ethanol products arc 

relative newcomers to the export world, and these programs are vital as we seek to expand international 

sales of both ethanol and DOGS. 
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If you spend any time in our state, you will see a great deal of positive economic activity, and much of it 

is due to agricultnre. Like any business, many farmers go to banks for opemting loans and other financial 

tools. The programs in the farm bill give onr farmers a degree of financial stability. Without strong farm 

bill programs, availability of agricultural credit will be endangered as banks won't be able to justify 

working with many family farmers. There may be simply too much tisk for the lenders to assume in their 

increasingly highly regulated banking industry. 

Our farms are businesses like no other. We put our investments into dirt and leave them exposed to 

storms, scorching heat and hopefully some rain. Then we leave fbe product of our investments to the will 

of a commodity market. This may sound careless, but it is the way we produce needed crops. In this time 

of crop surpluses, people may question the need for our productivity, yet less than five years ago, many 

were decrying a corn shortage that would lead to a food crisis. This is the natnre of our business. 

Unpredictable, uncontrollable weather and markets are part of our job. Strong fann programs allow us to 

ride through these ups and downs. 

While farmers work to continually improve and adopt new technologies in seed, inputs and equipment 

that allow us to sustainably manage our fields down to the square inch, much risk remains. This is why it 

is imperative that Kansas farmers have a federal farm program that provides fbemselves and our nation 

with the security needed to navigate an increasingly complex and challenging world. Thank you for the 

opportuuity to speak here today. 
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Statement by 

Catherine Moyer 

Chief Executive Officer and General Manager 

Pioneer Communications 

Ulysses, Kansas 

behalf of 

NTCA-The Broadband Association 

Senate 

Committee on Nutrition, & Forestry 

the on 2018 

Manhattan, KS 

February 2017 

Bill 
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NTCA Catherine Moyer 

February 23, 2017 

Page 2 of!O 

INTRODUCTION 

Chairman Roberts, Ranking member Stabenow, and members of the committee, thank yon for this 

opp01tunity to testify before you about rural telecommunications and the 2018 Farm Bill. I am Catherine 

Moyer, CEO/General Manager at Pioneer Commtmications. My remarks today are on behalf of Pioneer, as 

well as NTCA-The Rural Broadband Association, which represents approximately 850 member-owned 

cooperatives and commercially-owned carriers in 45 states that arc largely based in the communities they 

serve and offer a variety of communications services throughout the rural far reaches of the nation. 

Small, rural telecom providers like Pioneer connect rural Americans with the world, and these companies 

make every effort to deploy advanced networks that respond to consnmer and business demands for cuttingedge, innovative services. Fixed and mobile broadband, video and voice are among the numerous services 

that rural Amcticans can access thanks to our industry's commitment to serving sparsely populated areas. 

Small rural telecom providers have always been at the forefront of resourceful entrepreneurship and 

technological innovation, being" first movers" in the telecom industry by converting to digital switched 

systems, providing wireless options to their hardest to reach customers, enabling distance teaming and telehcalth applications, and deploying as the chance permits future-proof all-fiber systems. 

I have been part of the industry for more than 15 years, spending most of those years at Pioneer 

Communications. Pioneer is a local telecommunications provider with l 13 employees serving a 5,000-

square mile area- an area roughly the size of Connecticut, but with three million-plus fewer people than that 

state. We provide 21,000 total connections to wireline voice, high-speed broadband and video services over 

a network that utilizes a mix of tiber, copper and coax facilities, On average, we have just over two 

subscribers per square mile. However, when considering that 81 percent of our customers live in our small 

population centers, the "density" of our rural subscribers per square mile drops to just under 0.5. Put another 

way, 81 percent of our customers reside in approximately 15 square miles, while the remaining 19 percent 

reside in the other 4,985 square miles. In actual network terms, we have deployed 375 route miles (14 

percent of our route miles) to serve that 81 percent of our customers, while it takes 2,325 route miles (86 

percent of our route miles) to serve the remaining 19 percent of our customers. While one might ask why 

we serve these areas, we are the provider oflast resort- in addition to its legal obligations to serve these 

consumers and businesses who were left behind long ago when larger companies picked first where to serve, 

if Pioneer does not provide them now with service, there is-no one else available to do so. And atop all of 

that, our largest population centers are still tiny compared to even Tier 3 or Tier 4 "cities"- and our serving 

area is roughly 400 miles away from major cities like Denver or Kansas City. So at Pioneer, like many other 

NTCA members that serve ag~icultural communities and other rnral areas, the challenges of distance and 

density hit very close to home. 

Our broadband-capable networks are critical for tl1e communities we serve to overcome these challenges; if 

anything, cutting-edge networks and advanced services arc more important for rural consumers than in 

urban areas where distance is of little to no concem and densities are high. Our networks allow agricultural 

producers and other rural businesses to communicate with suppliers and sell to new markets, they enable 

education of our children on par wi'th opportunities in urhan areas, and they make our communities places to 
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NTCA Cathetinc Moyer 

February 23, 2017 

Page 3 of 10 

which people and businesses want to relocate and/or remain. In rural America, that translates into economic 

development that produces jobs, not only in a!o>riculture, energy and other industries with a strong rural 

presence, but in the health care sector, and just about any other retail industry that requires broadband to 

operate. 

As this committee deliberates the upcoming Farm Bill reauthorization, it should be mindful that access to 

capital for rural broadband projects is limited. Although there are a few options for the smaller broadband 

providers like Pioneer and other NTCA members to finance network construction, the fact is that there arc 

truly just a few. Small rural broadband providers cannot walk into large commercial banks to obtain loans 

for networks where the addressable market of consumers is so small, the costs are so high, and the payback 

is therefore often measured in decades rather than years. There is no "Wall Street" financing for rural 

broadband. Cost-effective Rural Utilities Service (RUS) loans offered through the U.S. Depa1tmcnt of 

Agriculture (USDA) arc therefore an essential resource for small businesses looking to deploy broadband in 

rural America. In the end, it takes a mix of private capital and financing trom a few committed, missiondtiven lenders like RUS, CoBank, or the Rural Tclecommnnications Finance Cooperative (RTFC) to enable 

small rw·al providers to build networks in their communities, with the complementary cornerstone of 

universal service funding then helping to justify the business case for such construction. Universal service 

funding ensures that consumers can afford to adopt services on the constructed networks and make 

continuing use of those networks over time. 

THE STATE OF RURAL BROADBAND DEPLOYMENT PROGRESS 

In the face of the challenges just described, Pioneer Communications and other NTCA members have made 

remarkable and substantial progress in deploying advanced networks in their communities. In the spring of 

2016, NTCA surveyed its members on their activities in providing broadband services and Intemet 

availability to their customers. Responses from 131 member companies indicated that they use a variety of 

technologies, even within individual serving areas, to find ways to offer the best possible broadband to their 

customers: 49 percent of respondents' customers arc served via fiber- to-the-home (FTTH), 29 percent via 

copper loops, 15 percent cable modem, 6 percent fiber-to-the-node (FTTN), 0.5 percent fixed wireless, and 

0.1 percent satellite.' 

Despite the multitude of obstacles that small providers face, their rural fiber dL'j)loyment continues at an 

impressive pace. In the 2013 survey, 29 percent of respondents' customers were served by FTTH; in 2014, 

the percentage !o'I"CW to 39 percent; and in this year's survey, almost half(49 percent) ha,·e access to FTTH 

service. This growth is all the more remarkable given the regulatory instability of recent years. Policies that 

encourage investments in and then sustain future-proof networks such as tiber- will be most efficient in 

responding to consumer demand over the lives ofthose networks, particularly when compared to short-term 

strategies that focus on getting lower-speed broadband deployed quickly only to find that consnmer 

demands outpace the capabilities of such low-speed networks in a few short years. 

1 NTC A 2015 Broadband/Internet Availability Survey Repo11 (20 16), NTCA-The RuraJ Broadband Association, Arlington, VA. 
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NTCA Catherine Moyer 

February 23, 2017 

Page 4 of 10 

Clearly, smaller operators recognize the importance of fiber to their network both now and in the coming 

future, and are taking the necessary steps to include it in their plans. Fifty percent of those survey 

respondents with a fiber deployment strategy expect to offer FTTN to more than 75 percent of their 

customers by the end of 2018. Seventy-eight percent of respondents expect to be able to provide FTTH to at 

least half of their customers hy year-end 2018. An additional40 percent have already completed fiber 

deployment to all their customers. 

Due in no small part to increased tiber deployment, broadband speeds offered by NTCA to customers 

continue to increase. Per the survey results, 85 percent ofNTCA members' customers can get broadband at 

speeds of 1 0 Mbps or higher, including 71 percent who can get service at speeds above 25 Mbps, In the 

2013 survey, 66 percent of respondents' customers could subscribe to broadband speeds of 10 Mbps or 

greater. 

The story for Pioneer is very similar. Ninety-seven percent of our customers have access to 1 0 Mbps 

service. The remaining three percent of customers are served by long local loops that provide 7 Mbps or 8 

Mbps service. We work with those customers on an individual basis to find solutions to their broadband 

needs. Twenty-one percent of our customers are served by FTTH. Another sixteen percent are currently part 

of a fiber build, and will be served by FTTH by mid-20 17. The remaining 63 percent arc served by FTTN, 

copper or coax, with many of those customers having more than one technology choice. We have deep fiber 

penetration throughout our service territory that allows us to provide more than the 10 Mbps to a vast 

majority of our customers. 

But for (and likely because of) all this progress, our customers arc demanding more and more speed. In 

2016, we saw more than 1,000 customers move from the basic 10 Mbps speed to a higher-tier package. Due 

to this demand, we continue to utilize new technology in our FTTN, copper and coax networks to meet 

demand, but also continue to deploy fiber. I envision the fiber build to continue at a steady pace until we 

have reached our entire territory with FTIH. The speed and sustainability of deployment, however, will be 

predicated on reasonable access to capital and the availability of Universal Service Fund (USF) supportimpottant points I will address further below. 

But before moving on to discuss the essential complementary role that access to capital and sufficient and 

predictable USF play as comerstones of rmal broadband investment, this brings me to a final, critical point 

about broadband deployment- for all of the success I just described of Pioneer and other NTCA members, 

the job is far from done in rural America. Where fiber has already been built, we must maintain it over 

thousands of miles. Where customers already have high-speed broadband, we need to roll tmcks many 

miles or have customer service representatives trained to deal vvith questions about router and device 

configurations in ways that were unimaginable when we were just a "telephone company." We also need to 

address the fact that even the best networks in rural markets are dependent upon so-called "middle mile" or 

long-haul connections to reach Internet gateways hundreds of miles away in places like Denver and Kansas 

City. Reaching those distant locations is expensive as well, and as our customers' bandwidth demands 

increase, so too does the cost of ensuring snfticient capacity on those long-haul fiber routes that connect 

rural America to the rest ofthe world. 
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NTCA Catherine Moyer 

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And then there are all those places where fiber or other robust facilities have not yet been built. For the 85 

percent ofNTCA member customers who can subscribe to 10/1 Mhps services today, that means there are 

15 percent of customers who cannot get even that basic level of broadband. For the 3 7 percent of Pioneer 

customers that we hope to have connected with fiber to their premises by the middle of this year, that means 

there are 63 percent who do not yet have such robust future-proof connections. In a country where the 

Federal Communications Commission (FCC) has indicated that 90 percent of Americans already have 

atlordahle access to 2513 Mbps service and many urban consumers and businesses are already reaping the 

henetlts of I 00 Mbps or Gigabit speeds, broadband access in mrdl Ametica remains far behind urban areas 

notwithstanding the best efforts of companies like Pioneer and other NTCA members. 

Add onto all of this the fact that, on average, many mral Americans need to pay far more for broadband than 

urban consumers due to insufficient USF funding, and it becomes readily apparent that the job of getting 

rural America connected- and, just as importantly, keeping mral America connected is far from done. 

The narrative of rural broadband deployment progress is therefore at once a story of success and a story of 

work still to he done. 

THE ROLE OF RURAL UTILITIES SERVICE FUNDING 

As noted earlier, the upfi·ont tlnancing of network constmction is one of two complementary cornerstones 

necessary to achieve success in rural broadband deployment. In rural areas, the intensive capital costs of 

communications networks are compounded by the geographic distance over which facilities must he 

deployed and the often-challenging ten·ain charactetistics. These areas also have relatively small number of 

users (as compared with more densely populated urban areas) to help recover the costs of deployment and 

ongoing operations. USDA's Rural Utilities Service plays a crucial role in addressing such rural broadband 

challenges through its telecommtmications programs that tlnance network upgrades and deployment in rural 

areas. 

RUS has been lending for broadband capable plant since the early 1990s at a net protlt for taxpayers, and 

these programs have been a great success story. The agency has helped advance state-of-the-art networks to 

rural Americans left behind by providers unable or unwilling to serve low population density markets. 

Reliable access to capital helps rural carriers meet the broadband needs of rural consumers at affordable 

rates. While RUS tlnancing is one of several sources of capital for mral carriers, as I noted earlier, there arc 

in fact very few other sources- with rare exception, RUS, CoBank, and RTFC reflect the effective universe 

of lenders to which most small mral providers can tum for outside financing of substantial network 

construction projects. 

Given the increased attention that has been paid by members of Congress and other policymakers to closing 

a "digital divide" and allowing rural America to keep pace with the rest of the country and the world from a 

technological perspective, it will he important therefore to continue providing RUS with the resources it 

needs to lend in support of rural broadband deployment. In fact, as Congress grapples with where to best 

direct scarce resources, it is important to note that the RUS Broadband Loan & Guarantees program and the 

traditional Telecommunication Infrastructure Loan & Guarantees program make loans that must be paid 

back with interest- creating a win/win situation lor rural broadband consumers and American taxpayers. 
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NTCA- Catherine Moyer 

February 23, 2017 

Page 6 of 10 

NTCA also supp01ts the Community Connect Grants pro!,>ram; while limited funding restricts its reach, the 

grant mechanism makes the program popular with providers serving the highest cost areas where even loans 

may be difficult to justify. NTCA accordingly urges the committee to continue to suppmi the RUS 

Broadband Loan program that is subjected to the Fann Bill reauthorization process at or above current 

funding levels as you fonnulate recommendations. Furthennore, we urge the committee to continue its long 

history of support for the Telecommunications Infrastmcture and Commtmity Connect programs that are 

also vital to the ongoing deployment and maintenance of advanced communications infrastmcture 

throughout rural America. 

THE COMPLEJ\U:NTARY ROLE OF THE FCC'S UNIVERSAL SERVICE FUND PROGRAMS 

Unfortunately, the success, momentum, and economic development enabled by the RUS's 

telccommtmications programs was stalled to some degree in recent years due to uncertainty in the Federal 

USF program that is so impm1ant to help justify the business case for initial constmction and to sustain 

operations on networks once built. From time to time, some observers confuse or conflate RUS (or other 

lending pro!,>rams) with USF, but the two in fact serve very different but complementary purposes; access to 

capital and ongoing USF support are each distinctly important in achieving rural broadband success of the 

kind seen to date. RUS lending programs, much like other lending programs, are focused on financing the 

substantial upfrout costs of network deployment- but RUS programs and the few others I have mentioned 

are particularly important in high-cost, sparsely populated rural areas where once again many commercial 

banks are unlikely to lend. 

By contrast. the USF programs do not provide substantial upfront financing for network construction. 

Instead, the USF pro1,>rams represent a complementary comerstone of rural broadband by helping tojustiff' 

the business case for such construction. More specifically, the USF programs are aimed by law at ensming 

"reasonably comparable" services are available at ''reasonably comparable" rates. In this regard, the highcost USF programs promote both availability and affordability. Without the cost recovery enabled by USF 

support, it would be difficult or often impossible to justify obtaining a loan and building a network in a highcost area, precisely because the pricing of services would then need to be so high that no consumer or 

business could actually afford to buy those services. In fact, we are already seeing such concerns about 

affordabilily arise as it becomes increasingly apparent that USF programs are insufficiently funded, with 

many consumers still facing the prospect of paying hundreds of dollars per month for standalone broadband 

services even in the wake of recent FCC rcforn1s intended to tix that problem. 

In the wake of refonn debates that stretched nearly a decade and created substantial uncertainty in recent 

years particularly, NTCA has made substantial effm1s to restore regulat01y cettainty to the USF programs, 

both by working with the FCC on modemizing the programs to more directly support the delivery of 

broadband to consumers and by seeking more sufficient funding under a USF high-cost budget that had been 

held constant since 2010. Specifically, in March 2016, the FCC adopted an order that contained a series of 

refom1s to the USF mechanisms upon which Pioneer and other smalltural telcos rely to recover the costs of 

investment and ongoing operations in high-cost areas. The order defined options for tel cos to elect either a 

"model-based" USF support mechanism that would provide carriers with additional suppott in exchange tor 
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February 23, 2017 

Page 7 of 10 

incremental broadband buildout obligations or a refonucd "non-model" USF support mechanism that would 

now provide support to enable more affordable broadband rates for mral consumers and businesses. 

Unfortunately, even as the March 2016 order resolved some long-mnning refom1 debates and took several 

important steps to more directly orient the high-cost USF program toward broadband, the order did not 

address a fundamental concern the lack of sufficient funding under a budget that effectively provides 

telcos with less revenue today than they had prior to reforms adopted in 2011. To be clear, the FCC 

thankfully did provide additional funding in the March 2016 order- $200 million per year- to help 

facilitate the "model option" as part of the reforms described above; these funds will certainly help enable 

the expansion of broadband in areas where it is lacking today. But demand for model support far exceeded 

supply, eontim1ing the insufficiency of a budget that was othetwise held constant at 2010 support levels. In 

fact, even with the annual incremental infusion of $200 million in support, USF lunding for the model 

remains approximately $110 million per year short of demand, meaning that tens of thousands of rural 

consumers will see lower speeds or no broadband at all as a result. The FCC is now seeking comment on 

whether and how to address this shortfall, and NTCA and a number of other stakeholders are urging the 

FCC to provide full funding to enable the business case for greater expansion of broadband. 

But this tmfortunately reflects only a portion of the USF funding shortfall that affect mral consumers. As 

noted earlier, the FCC also refonued the existing "non-model" USF mechanisms to more directly support 

consumer purchases of broadband services. While this was an important step that offers some promise and 

for which NTCA and its members were gmtcful, the fact is that the reforms only tixed the "mechanics" and 

did not address the underlying problem of insufficient lunding. Indeed, due to the budget that has been tlat 

since 2010, the non-model mechanisms look to be underfunded in the amount of at least $140 million this 

year, and as a result, the new budget control adopted as part of the reforms will cut an estimated 10 percent 

ofUSF support this year on average for companies like Pioneer- cutting recovery of costs that we have 

already incuncd in deploying networks and delivering services to consumers. Moreover, the budget control 

can and will vary from period to period, undercutting the kind of predictability that is called for by law and 

needed when evaluating future investments. For Pioneer, for example, the unpredictability and impact of the 

budget control mechanism hits close to home, with our support having been reduced by approximately five 

percent ofsupp01t in the last few months of20l6 and some estimates indicating that the budget control 

could increase to around nine percent this year. This loss of support due to the budget control will translate 

into higher prices for consumers for broadband, because the only other place we can tum to recover those 

costs are our consumers and the unpredictable nature of the level of the budget control hinders our ability 

to plan for future investments in broadband networks. 

Thus, as NTCA summarized in a recent filing with the FCC, "while much effort may have gone into 

rebuilding 'the engine' of non-model USF refonns, the ongoing lack of 'gasoline in that engine' (in the tom 

of sufficient budget resources) risks rendering its operation inefficient at best and utterly inetlective at 

worst." This budget crisis- captured in the form of the new budget control mechanism- will deter 

customer purchases of standalone broadband and ultimately undermine additional deployment too, as small 

telcos will need to factor estimated support reductions into future planning efforts and scale back 

investments. Remedying this USF budget concern will be important if we are to achieve the kinds of 
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network deployment progress and sustained delivery of affordable, high-quality broadband to consumers 

that this committee and many other members of Congress hope to see in rural America. 

RURAL BROADBAND BENEFITS THE ENTIRE U.S. ECONOMY 

For years, until uncertainty began to creep into the USF programs, the complementary comerstones ofRUS 

and other lending efforts on the one hand and the USF programs on the other hand worked well in concert to 

achieve substantial success in advancing rural telecommunications investments and sustaining rural telecom 

operations in the form of affordable rates for consumers. As discussed above, after years of reform debates 

and uncertainty, the FCC has taken steps to finally adopt and implement reforms as discussed above, but 

there is still much more work to be done to make sure the refonns and programs actually work as intended 

and that these comerstones of access to capital and USF can once again operate in concert- and this is 

important because of what it means for the economy in rural America and nationwide. 

Investing in rural broadband has far-reaching effects for both urban and rural America, creating efficiencies 

in health care, education, agriculture, energy, and commerce, and enhancing quality of life of citizens across 

the country. A series of studies confirms that significant benefits flow from rural broadband investment to 

broader urban and statewide populations. For example, a report released in April 2016 by the Hudson 

Institute in conjunction with the Foundation for Rural Service found that investment by rural broadband 

companies contributed $24.1 billion to the economies of the states in which they operated in 20152 Ofthis 

amount, $17.2 billion was the direct byproduct of the rural broadband companies' own operations while 

$6.9 billion was attributable to the follow-on impact of their operations. In Kansas, the direct economic 

impact of rural telecommunications was $468 million with indirect impacts of $171.5 million. 

The Hudson study also continued that while small telcos like Pioneer produce a range of 

telecommunications services in rural areas, the economic activity generated by such operations accrues both 

to the rural areas served and to urban areas as welL In tact, most of this benefit goes to nrban than rural 

areas because many of the vendors, suppliers, and construction firms that rural telcos use are based in urban 

areas. Only $8.2 billion, or 34 percent of the $24.1 billion final economic demand generated by rural 

telccom companies accrues to rural areas; the other 66 percent or $15.9 billion accmes to the benefit of 

urban areas. 

Additionally, the report found that the mral broadband industry supported nearly 70,000 jobs nationwide in 

2015, including more than 1 ,200 jobs in Kansas, both throngh direct employment and indirect employment 

from the purchases of goods and services generated. Jobs supported by economic activity created by rural 

broadband companies arc shared between rural and urban areas. Forty-six percent arc in mral areas; 54 

percent are in urban areas. 

Other, earlier studies reinforce these findings. For example, the Center for Economic Development and 

Business Research at Wichita State University found that the total economic impact of Kansas rural telecom 

companies (in the form of direct wages and induced economic activity) averaged $137.2million dollars a 

2 "The Economic Impact of Rural Broadband" (20!6), ·nu~ Hudson Ins1itute, Washin1:,.rton, D.C. 
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NTCA Catherine Moyer 

February 23, 2017 

Page 9 of!O 

year between 2011 and 20143 The companies included in the report spent an average of$98 million dollars 

per year on capital improvements to maintain and expand communication capacity in rural Kansas. 

Of course, these referenced stndies only look at the direct and indirect economic impact of the investments 

and operations of the telcos themselves. The broader socioeconomic benefits of broadband tor users cannot 

be ignored. A Cornell University stndy, for example, found that rural counties with the highest levels of 

broadband adoption have the highest levels of income and education, and lower levels of unemployment and 

poverty4 A recent Pew Study further finds that among those Americans who have looked for work in the 

last two years. 79 percent utilized online resom·ces in their most recent job search and 34% say these online 

resom·ces were the most important tool available to them. 5 

Access to healthcare is a critical issue for rural areas as well, where the lack of physicians, specialists, and 

diagnostic tools normally found in urban medical centers creates challenges for both patients and medical 

staff. Telemedicine applications help bridge the divide in rural America, enabling real-time patient 

consultations and remote monitoring, as well as specialized services such as tele-psychiatry. One stndy 

found that doctors in rural emergency rooms are more likely to alter their diagnosis and their patient's 

course of treatment after consulting with a specialist via a live, interactive videoconference. 6 

There is also a shmtage of teachers in many areas of mral America and those public school districts rely on 

high-speed connectivity to deliver interactive-video instmction tor foreign language, science and music 

classes. For example, students in rural Minnesota can attend online music classes offered through the 

MacPhail Center tor Music in Minneapolis.' Broadband networks also enable farmers and ranchers to use 

the Internet to analyze weather data, manage nutrient application, map their crop yields, and adjust planting 

for the next season with modem precision agriculture tools, and gain access to new markets. Farmers are 

relying heavily on both wireless and wire line broadband technologies, resulting in monthly data usage of 30 

to 40 Gigabytes-' 

Retail e-commerce has benefited tremendonsly irom sales in rural Amerjca as well, where consumers may 

lack access to local retail outlets, but through the availability of rural broadband networks, can access a 

variety of shopping options. According to the Hudson Institute, rural consumers generated $9.2 billion in 

online sales in 2015 and if all rural Americans had access to broadband networks, the authors estimate that 

Intemet sales would be $1 billion higher9 

.> "Economic Impact of Kansas Independent Rura.l Telephone Companies" (20 16). Center for Economic De\'elopment and Business 

Research, W. Frank Batton School of Business, \Vichita State University. 4 Broadband's Contribution to Economic Health in Rural Areas" (2015), Community& Regional Development Institute, 

Cornell University. 5 Searching for \Vork in the Digital Era" (2015), Pew Research Center, \Vashington, D.C. 6 '"Tclemedicine Consultations and Medication Errors in Rural Emergency Depattments" (2013), Center for Healthcarc Policy 

and Research and Departments of Pediatrics, University of California Davis. 7 "Bringing Broadband to Rural Minnesota'' (2016). Center for Rural Policy and Development, Mankato, MN. 8 "Fanners Harvest Gigabytes \Yith Broadband and Wireless Technology" (20 16). Co Bank Rural Infrastructure Briefings. 9 "The Economic Impact of Rural Broadband" (2016), The Hudson Institute. Washington. D.C. 
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February 23, 20 I 7 

Page 10 oflO 

CONCLUSION 

Entrepreneurial smallmral caniers have leveraged public and private capital, universal service support, and 

public-private partnerships to lead a stunning technological revolution in many parts of rural America. 

These small businesses play an essential role in deploying broadband to rural areas, and the services enabled 

by broadband arc essential to the startup, operation, and growth of other rural small businesses. Rural 

America is poised tor a bright future powered by smart technologies that promote affordability, 

sustainability, and efficiency in the operation of rural industry and the delivery of essential services such as 

healthcare, education, and public safety- all key to sustaining and growing rural population. But such 

benefits will only be possible if robust broadband is available, affordable and sustainable. Rural telecom 

providers and lenders such as RUS must have regulatory certainty betore they can justify greater 

investments in the networks ofthe future, and providers like Pioneer need sufficient ongoing USF suppmt to 

avoid the prospect of charging rural consumers tens or hundreds of dollars more per month to recover the 

costs of operating in such rural and remote locations. 

Much of the focus iu today's broadband policy debates is on what it takes to "get broadband out there." 

That is an essential question to be sure, and financing programs like those available through RUS and the 

few other lenders I have mentioned are the most time-tested, effective means of doing so. Yet, just as 

important is the question of what is needed to "keep broadband out there" to ensure that rural broadband 

networks once built can be maintained, that the services atop them remain affordable, reliable, and of a 

quality comparable to what mban Americans can get. Thus, the mission of universal service- and the 

economic benefits it delivers locally and to the nation as a whole- requires the resourcefulness and 

entrepreneurship of small businesses like Pioneer, access to capital from programs like those offered by 

RUS, and the availability of sufficient and predictable ongoing cost recovery mechanisms like the USF 

program so that rural consumers and businesses can indeed obtain services that reasonably comparable in 

price and quality to those available in urban America. 
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Introduction 

STATEMENT FOR THE RECORD 

RICHARD B. MYERS 

PRESWENT KANSAS STATE UNIVERSITY 

Before the 

SENATE COMMITTEE ON AGRJCUL TURE 

UNITED STATES SENATE 

February 23, 2017 

Chaitwoman Roberts, it is indeed my pleasure to welcome you, on behalf of 

Kansas State University, to the campus of Kansas State University your Alma 

Mater. We are pleased to have you in Kansas and we thank you, and value your 

leadership in the work of this important committee. Senator Stabenow, welcome to 

Kansas and Kansas State University. 

Today, I would like to also welcome our valued friends and stakeholders to this 

hearing today at Kansas State. Without question, this group represents a broad 

range of interests that are all, in one way or the other, impacted by the health and 

vitality of Kansas and US agriculture. 

The Land-Grant System 

There is another way in which it is that testimony on behalf of the 2018 

Fann Bill begins in Kansas. Kansas State and Michigan State maintain a friendly 

banter around which school was the first and which school the second land grant 

university. The Morrill Act which established of the land grant system was 

enacted in J 862. The Kansas Legislature on Febmary 16, 1863 accepted the 

Moni!l Act and designated Kansas State University as the Land Grant University 

in Kansas. At the time that federal legislation was signed by President Lincoln, 

little could he or the authors of the bill have imagined the implications of the act 

The partnership that was developed between the states and the federal govemment 

with the enactment of the Monill Act and the follow on Hatch and Smith-Lever 

Acts have been the backbone of agriculture, agriculture research and outreach for 

one hundred and fifty five years in our country. 
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Kansas State University 

K-State Research and Extension serves as the front door to Kansas State 

the state's land-grant university. We provide trusted, practical education to help 

individuals, businesses and communities solve problems, develop skills and build a 

better future. A few examples of the work performed on behalf of Kansas and 

American agriculture. 

Wheat Breeding 

The world's population is expected to reach 9.6 billion by 2050. To feed and 

sustain a growing population, we develop innovative practices that benefit Kansas, 

our nation and the world. Through cutting-edge research in areas such as genetics, 

disease prevention and food security, we help agriculture Kansas' largest 

employer be more profitable, sustainable and efficient. 

With a name befitting its place at the summit of Kansas agriculture, the K-Stateproduced wheat variety called Everest just completed its fourth year as the top 

vmiety planted across the state and the fifth time out of the last six years that a 

K-State variety has held the top spot. Everest was first released in 2009. 

Sorghum interests cooperate to promote growth 

As a global leader in sorghum research and promotion, K-State co-founded a 

unique coalition with industry leaders and producers. In early 2016, the Kansas 

Grain Sorghum Commission, United Sorghum Checkoff Program, Kansas 

Department of Agriculture and K-State fom1ed the Collaborative Sorghum 

Investment Program. The program focuses on expanding markets for sorghum and 

increasing the average national sorghum yield from 62 bushels per acre to l 00 

bushels per acre by 2025 by funding research in such areas as plant breeding, 

genetics and field-level management. 

In terms of national rankings, Kansas is the No. 1 producer of sorghum, but in 

terms of statewide acreage and return, it ranks behind wheat, corn and soybeans. 

K-State coordinates these efforts through the Center for Sorghum Improvement, 

which aims to achieve major advances because farn1ers have not seen private 

technology investments in sorghum for the last couple decades. Those advances 

will come from work currently being done in labs at K-State and in test fields 

across Kansas. 

Along with seeking improvements on the front end of production, the center is 

also working on the back end: and opening markets for sorghum. 

This includes building the case for more sorghum use in livestock feed, entering 

the $24 billion pet food industry and creating products for people that capitalize 

on food-grade sorghum as a gluten-free, low-glycemic index product high in 

antioxidants. 
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Local food hub benefits farmers, consumers 

Five years ago, it seemed like a simple idea: find a way to help smallholder 

fanners in Kansas sell the food grow to more people. K-State Research and 

Extension helps farmers become more more profitable and more selfsustaining. We also assist consumers and communities. Local food-system 

development is community vitality. 

The food hub is a producer cooperative that goes beyond selling food at local 

fatmers markets. The food hub helps farmers sell their products to larger buyers, 

such as restaurants, hospitals, schools and food companies. 

Today, smallholder farmers in Kansas have numerous options for providing their 

goods through the food hub. This food hub allows K-State Research and 

Extension to think critically about how to grow the local food system in a way 

which invests back into Kansas fam1ers and also benefits Kansas communities and 

consumers. 

Bio Agro Defense 

As you know Senator Roberts thanks to your herculean effort the National Bio and 

Agro Defense Facility is under constmction on the campus of Kansas State. 

Kansas State is steadfast in protecting Last month the Blue Ribbon 

Study Panel held a hearing at Kansas State University. Panel member and fom1er 

U.S. Senate Majority Leader Tom Daschle referred to K-State that day as "the 

Silicon Valley for biodefense" a designation we take seriously and will proudly 

accept and continue to strive to maintain. 

Again Senators Stabenow and Robetts for traveling to Kansas State for this healing 

in our nation's heartland. We are proud you chose our campus to gather impmtant 

infonnation on the future of agriculture. 
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Testimony of Kathleen O'Brien {Kathy) 

General Manager, Nemaha-Marshall Electric Cooperative 

Senate Agriculture Committee Hearing 

"Hearing from the Heartland: Perspectives on the 2018 Farm Bill from Kansas." 

February 23, 2017 

Manhattan, KS 

Thank you, Chairman Roberts and Ranking Member Stabenow, for inviting me to testify. My name is 

Kathy O'Brien. I am the General Manager of Nemaha-Marshall Electric Cooperative in Axtell, Kansas. I 

am here representing my own co-op, the Kansas Electric Cooperative Association, and the National Rural 

Electric Cooperative Association. 

Nemaha-Marshall Electric Cooperative delivers electricity to around 3500 homes, farms, and businesses 

in northeast Kansas. Nemaha-Marshall was incorporated in 1938 by rural residents to serve rural 

consumers in all of Nemaha and Marshall Counties and parts of Washington, Pottawatomie, and Jackson 

counties. Our co-op builds and maintains over 1500 miles of electric distribution line. 

While our first business priority is to deliver reliable, affordable electricity to our members, our purpose 

is much greater than that. We exist to benefit the communities we serve. We are more than just a 

poles, wires, and electrons company. Our broader purpose is to provide the power that empowers our 

communities to thrive. We are much more than just small electric utilities we are the engines that 

drive economic opportunity across the heartland and rural areas everywhere. 

We've been keeping the lights on in rural America for almost 80 years, and that's as important a job 

today as it ever has been. Some parts of Kansas have actually become less densely populated since then. 

In fact, Nemaha-Marshall's service territory still averages only about two houses per mile. The 

cooperative business model is uniquely suited to meet the needs of these consumers. 

Rural areas still grow most of the food, generate most of the power, and manufacture most of the goods 

that this country consumes. When rural areas suffer, electric cooperatives suffer and, more importantly, 

the country as a whole suffers. That's why the Farm Bill is essential for co-ops, for Kansas, and for the 

country. The Farm Bill contains important rural development tools that support our efforts to 

strengthen our communities. I want to talk about just a few. 

Rural Utilities Service (RUS} 

In the early 1900's, as urban areas began to electrify, rural areas lagged behind. Eventually, farmers and 

ranchers in remote areas took the initiative to form electric cooperatives and did it themselves. In 1936, 

the Rural Electrification Act formalized the partnership that allowed electric cooperatives to access 

affordable credit from the federal government to finance that infrastructure. In the past 80 years, a lot 

has changed, but the same fundamental challenge still exists- how to affordably connect those few 

customers in high cost rural areas. What was then called the Rural Electrification Administration is now 
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the Rural Utilities Service and it's as relevant today as it was back then. REA and RUS loans have helped 

build, expand, and improve the infrastructure across rural America necessary to provide power, deliver 

clean water, and other necessities. It's been the most successful public-private infrastructure 

investment program in the history of the country. 

RUS loans help electric co-ops reduce costs and improve reliability for our members by financing basic 

maintenance like replacing poles and wires. But it also helps us fund projects to make our systems more 

modern, efficient, and secure. It might be hard to believe, but as recently as ten years ago at NemahaMarshall, many of our member-customers read their own meters and figured their own bill using a rate 

chart. Today, thanks toRUS, we read our meters remotely, which is much more accurate, efficient, and 

cost effective. 

RUS depends on a yearly appropriation from the Agriculture Appropriations bill. We have historically 

enjoyed strong support for robust funding for RUS, in large part because we're such a good investment 

for the federal government. The President's Budget request for 2017 estimates that the federal 

government could earn up to $300 million in net revenue from RUS loans. We ask that you help us 

maintain that support. 

We also ask that you support policies that allow us to use RUS loans to address a broad set of co-op 

needs- whether for renewable generation, baseload generation, or for making environmental upgrades 

to existing generation. Just as the times have changed and the needs of rural America have changed, so 

too has the RUS loan program. We have appreciated working with the Committee over the years to 

help make the program more streamlined and efficient, and we look forward to exploring new ways to 

continue to improve the program. Modernizing the RUS loan program is good for both borrowers 

(electric co-ops) and taxpayers. The RUS annually reviews and approves billions of dollars of loans, and 

finding ways to more efficiently process those loans reduces burdens on taxpayers while meeting 

borrowers' needs more quickly as well. 

Guaranteed Underwriter Program 

Another important financing option available to electric cooperatives is loans from cooperative banks. 

Co-op banks add healthy competition to the marketplace. The Farm Bill contains a provision that allows 

those loans to be guaranteed by RUS for cooperative business purposes. We encourage you to continue 

that policy. 

In addition to investing in the electric cooperative network, the fees paid on Guaranteed Underwriter 

Loans can be used to fund Rural Economic Development Loans and Grants- known as the REDL&G 

program. 
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Rural Economic Development Loans and Grants (REDL&G) 

Under the REDL&G program, USDA provides zero-interest loans to utilities (including electric co-ops), 

which, in turn, pass the funds through to local businesses and other groups that create jobs in rural 

areas. This positive cycle of business development can strengthen both the co-op and the local 

communities by helping stabilize populations and the co-op's customer base. 

During the last ten years, 81 REDL&G projects totaling $49 million were responsible for 2100 jobs in 

rural Kansas. Included among those projects are grocery stores, health care facilities, libraries, and new 

fire trucks just to name a few. We believe that the program is a valuable tool in offsetting population 

flight and job losses in rural Kansas. 

Five years ago when I was here, I gave an example of how the REDL&G program works in my hometown 

of Seneca, Kansas. Back then, I described how a local employer, Koch and Company, a cabinet and door 

manufacturer, received a $450,000 REDL&G loan in 2004 for a cabinet plant expansion. The project 

created 55 new jobs and retained 185 jobs at that time. Since then, Koch has continued to expand and in 

2016 had annual revenue of $85 million. That's up from $40 million when I was before the Committee 

back in 2011. They now employ 650 employees in multiple states, more than doubling during the last 

five years. That is an excellent return on investment. 

Energy Efficiency 

For years, electric co-ops across the country have provided information and advice to consumers to help 

them use electricity more efficiently and cost-effectively. The wide range of assistance includes rebates 

for energy-efficient appliances, switching to more energy efficient light bulbs, and time of day rates to 

encourage off-peak usage. Here in Kansas, Midwest Energy has pioneered an innovative partnership 

with its members to allow "on bill" financing of energy efficient improvements made to a customer's 

home. They call it the HomeSmart Program. In short, Midwest helps the consumer finance these 

improvements who then pays back that loan every month through their bill. Even with the loan 

payment, consumers' bills tend to go down because of the energy savings associated with these 

improvements. 

The Rural Energy Savings Program Act included in the last Farm Bill was modeled in part on the Kansas 

HomeSmart program. We encourage you to maintain the Rural Energy Savings Program, the Energy 

Efficiency and Conservation Loan Program, and the Rural Energy for America Program. We believe these 

are all important tools that can help replicate Kansas's successes around the country. 

Regulations 

The federal government should have a reasonable regulatory philosophy that recognizes the 

stewardship that stakeholders like electric cooperatives have taken in the communities we serve. 
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For example, NRECA has concerns with the Waters of the U.S. rule issued by the EPA and the Army 

Corps of Engineers. Electric cooperatives conduct several activities associated with providing electric 

service which require Clean Water Act permits. We believe this rule could drastically broaden the types 

of work that trigger the need to get a permit, possibly including routine repair and replacement of poles 

and wires. That would result in increased costs and decreased reliability for our customers. We urge the 

EPA and the Corps to engage in a meaningful dialogue with all stakeholders to craft a new rule that 

takes into account the concerns of those who provide essential services to rural communities. 

NRECA also recently filed comments with the U.S. Fish and Wildlife service opposing the listing of the 

Lesser Prairie Chicken under the Endangered Species Act. We believe that our work with state wildlife 

agencies to enact voluntary conservation measures is paying big dividends. We've helped manage more 

than ten million acres in five states which has helped the Lesser Prairie Chicken population to stabilize, 

without having to resort to a more burdensome bureaucratic approach. 

Broadband 

Just as with other types of infrastructure, rural America can't be competitive without access to high 

speed broadband service. Many comparisons are drawn between the lack access to robust broadband 

service today and the need for electrification in rural areas 80 years ago- with the urban areas of the 

country well-served, and rural areas being left behind. Some electric co-ops around the country are 

leading the way in connecting rural customers to high speed broadband. As Congress contemplates 

telecommunication and infrastructure policies in the farm bill and in other legislative packages, we 

believe that all potential providers including electric cooperatives should be eligible for programs 

designed to bridge the digital divide. 

Conclusion 

We are a healthy nation because we have vibrant, bustling urban cities AND because we have verdant, 

productive rural areas. Unfortunately, whether it's infrastructure or jobs or access to health care, it 

seems that too often rural America gets the short end of the stick. The Farm Bill is important legislation 

that helps to address some of those disparities. 

Electric Cooperatives enjoy a productive partnership with the federal government and with the 

communities we serve to promote the health of rural America. We look forward to continuing to work 

with you toward that important goal. I'm happy to answer any of your questions. 
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FRONTIER 

FARM CREDIT 

Testimony of 

Gena Ott, Financial Officer 

Frontier Farm Credit 

Before the 

Senate Committee on Agriculture, Nutrition & Forestry 

Field Hearing 

February 23, 2017 

Mr. Chairman and Ranking Member Stabenow, thank you for the opportunity to testify today on behalf 

of frontier Farm Credit. My name is Gena Ott, and I am a financial officer serving borrower-owners of 

our eastern Kansas cooperative lending Association, based in the Emporia, Kansas, office. I am a 32-year 

employee of the Farm Credit System, having served in both lending and crop insurance roles. 

My testimony today will provide an overview of the credit conditions across the Frontier Farm Credit 

territory in eastern Kansas. I will share examples of some of the decisions producers are facing and the 

ways our Association is working with them to make the most of their options. I will highlight the role 

that crop insurance plays as a safety net for customers and provide information regarding the role of 

Frontier Farm Credit in serving diverse needs in agriculture and rural communities. Moreover, I will 

share the ways in which my Association collaborates with other organizations to fulfill our mission. 

Frontier Farm Credit is part of the nationwide Farm Credit System, serving the eastern third of Kansas. 

The Association has $2 billion in loan volume, which increased by 3.4% in 2016. The Board of Directors 

declared a $9 million cash-back dividend from 2016 earnings that will be paid to cooperative members 

this spring. loan repayment capacity in our portfolio is largely dependent upon income from corn, 

soybeans, wheat and cattle. Many of our customers are also dependent on off-farm income, though the 

level varies widely. Government program payments related to corn, soybeans, wheat, the Conservation 

Reserve Program, and the Conservation Stewardship Program are also a source of income for many 

customers. 

As my colleagues in our risk management and credit roles assess the ag economy, they view Midwest 

agriculture conditions as follows. Generally, the upper 50 to 60 percent of our grain producers are and 

have been holding their own if not showing some level of profitability, though minor. The bottom 15 to 

20 percent of grain producers are those with a combination of higher debt load, higher cost of 

production, and overall lack of profitability; they are having to make considerable adjustments to try to 

put them in a position of viability to weather this change in the ag cycle. The lower performing percent, 

after two to three years now of losses, are in a position of vulnerability and their adjustments are more 

significant- including major changes to the scope of their operation, selling of assets, and for some, 
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considering exiting production agriculture. Those in between the upper 60 percent and lower 20 percent 

present a mixed bag of situations, but generally still have options due to their overall equity position. 

Cattle producers continue to brace for the future. After a 3 percent increase last year, cow numbers are 

expected to grow another 3.5 percent by year-end- back up to 1995 levels. Fed cattle prices and 

margins will continue to be under pressure, although cattle feeders will continue to see relief from 

lower calf prices. Fed cattle prices in the $1- $1.20/lb. range are most probable, and packer margins will 

narrow. 

Those of us who work with farmers and ranchers have been in a mode of talking with our customers to 

help them assess their operations and have been encouraging them to manage their risk. In return, we 

hear from our customers the importance of strong markets and regulatory reform for the viability of 

their farms and ranches. 

As a financial officer, I have been having conversations about the four "Rs" of overhead and/or fixed 

costs. When a producer owns land, it may be a good time to look to Re-amortize it. For machinery and 

equipment, now may be the right time to Refinance. With rented land, leases and terms of the lease 

may lead to conversations with landowners to Renegotiate. And, for family living expenses, it's a time to 

Re-assess. 

For many customers, as the previous numbers would indicate, the cycle we are in will allow them room 

to adjust. However, some may make more far-reaching decisions. In all cases, these conversations are 

individual to the customer and to the operation, and we will work with them every step of the way. 

Growing a farm or ranch is a significant financial commitment and can be especially challenging for lessestablished producers. Frontier Farm Credit makes extraordinary efforts to support young, beginning 

and small farmers and ranchers. There are 3,871 individual young, beginning and small customers at 

Frontier, comprising more than 58 percent of our customers and representing $630 million lent to this 

segment. Of those, 1,219 are young and beginning, representing $206 million in credit. Specialized 

lending programs, such as our AgStart program, include a full line of products with customized 

underwriting and modified credit approval standards for farmers age 35 or younger or with 10 years of 

experience or less. 

Frontier Farm Credit also offers a unique Development Fund that provides both business planning 

assistance and working capital loans to young and beginning farmers and ranchers. Young producers 

haven't enjoyed earnings to build the working capital that is crucial in building an operation and 

sustaining a cushion for adversity. 

The development fund injects cash (working capital) into an operation and requires only interest 

payments for five years. The customer at the end of five years then establishes a repayment plan for any 

balance remaining on the note. Participating producers have completed a five-year cash flow, a 

business and market analysis, and a detailed business plan complete with mission statement, objectives 

and strategies to achieve their objectives. The business plan also includes a risk management plan 

(including calculating break-evens and utilizing crop insurance Revenue Protection at a 75 percent 

level). Participants also establish a financial plan that helps keep them focused and includes working 

capital goals. 
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I recently met with one of our Development Fund customers. He's in the second year of the program, 

and we are about to update his five-year plan. He has picked up additional ground for 2017, which is 

exciting, and requires more working capital. It's our desire to be his financial partner and help him 

succeed by not only providing funds but also helping him develop business and financial management 

skills that will help him fulfill his dream to have a career in agriculture that provides for him and his 

family. 

Mr. Chairman and Ranking Member Stabenow, I want to thank both of you for your commitment to crop 

insurance. It is an important public-private partnership, and a critical risk management tool for farmers. 

The strength of the current crop insurance partnership rests in the ability for a farmer, or rancher, to 

select products that meets their needs for individualized risk management. 

As an example, the foresight of producers who purchased crop insurance in 2012 mitigated the direct 

financial impact on their operations even though final corn and soybean yields were significantly below 

trend lines for both crops as a result of drought that year. Farmers bought revenue protection coverage 

at levels of 70 percent or greater on more than 90 percent of insured corn acres within Frontier Farm 

Credit's territory. Ofthe 128 crops covered by crop insurance, the categories that suffered the most 

damage in 2012 were corn, wheat, cotton, soybeans, pasture, rangeland and forage. 

Crop insurance performed as it was intended: though each case is different, farmers who purchased 

crop insurance generally received income that would at least cover their investment in the 2012 crop. 

That means most were able to plant again in 2013, continuing to produce feed, food and energy and 

averting consumer inflation. They also were able to make purchases at their neighbors' stores and other 

businesses, which helped support the economy in every local community. That insurance meant that 

producers were able to maintain obligations with their creditors. Finally, the insurance program also 

averted the need for ad hoc disaster assistance. 

As a lender in the Flint Hills of Kansas, I would also call your attention to Livestock Risk Protection (LRP) 

and the Pasture, Rangeland and Forage Product (PRF). LRP and PRF have been important products for 

cattle producers. Frontier Farm Credit has been regionally active with these products in the 

marketplace. 

The culture of Frontier Farm Credit encourages collaboration in the communities we serve and within 

the industry. Our Working Here Fund provides grants for projects and organizations that make a positive 

impact in the eastern Kansas counties we serve. Grants are focused on the areas of ag education, young 

and beginning producers, and hunger and nutrition. Grants are also considered for essential services and 

disaster relief needs in rural communities. 

Recently, Greenwood County, Kansas, used this program to enhance their fairgrounds. When a storm 

damaged the livestock barns there in 2014, the aftermath revealed the need for not just repair, but new 

facilities altogether. Dollars helped spur additional fundraising, and assisted in growing not only the new 

building, but also excitement with two new 4-H clubs in the county. 
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Frontier Farm Credit also provided Working Here Fund support for the FFA garden in Marion, Kansas. 

Students there engage local residents and provide fresh produce to a local food pantry. Students are 

learning and helping to feed others in.their community. 

More than a decade ago, leaders from Kansas ag organizations and Kansas State University established 

the Women Managing the Farm Conference to encourage women to come together and develop the 

knowledge and skills needed for success in a competitive agricultural environment. Women represent 

central roles in the agricultural heritage that builds and sustains communities throughout the world. 

According to the 2012 Census of Agriculture, women are the principal operators of 6, 783 farms in 

Kansas, and there are 25,611 total women farm operators in the state. Further, women have a variety of 

other roles in farming operations, including those who inherit ag land. 

I've had the privilege with my Farm Credit colleagues to be involved on the steering committee and as a 

presenter for Women Managing the Farm. Demand for this statewide program remains strong, and local 

groups continue to emerge. We recognize the support and engagement of USDA in these programs and 

welcome their continued involvement. 

Frontier Farm Credit assisted in formation of the Kansas Farmer Veteran Coalition, and provides credit 

education when needed for veteran training events. We welcome opportunities for involvement in 

future events and commend the veterans who have taken on leadership roles in these organizations. 

Similarly, Frontier Farm Credit has been a partner with the SAVE Farm (Servicemember Agricultural 

Vocation Education). Financial Officers provide participants with credit training as they make decisions 

regarding their future opportunities in agriculture. 

Collaborative opportunities are important, and we would hope that the spirit of public policy 

encourages federal agencies to be at the table as we engage with all segments of agriculture. Thank you 

for the opportunity to share the ways in which Frontier Farm Credit is involved in supporting the next 

generation of producers, rural communities, and diverse agriculture across Eastern Kansas. 

We know that you, the leadership of this committee, understand the challenges facing rural 

communities and agriculture, the challenges that lie ahead with respect to the Farm Bill, the importance 

of crop insurance as a safety net to farmers and ranchers. We thank you for your support and ask that 

you share your knowledge and experiences with your colleagues to help them understand, too, as you 

work through the process of another Farm Bill. 

Chairman Roberts, it is always great to have you back home and we are proud of the work you do every 

day on behalf of our state. Thank you, Ranking Member Stabenow, for coming to Kansas to listen. Thank 

you, again, for this opportunity to share the story of Farm Credit in eastern Kansas and I look forward to 

your questions. 
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Written Testimony Presented Before the Senate Agriculture, Nutrition and Forestry 

Committee 

Hearing from the Heartland: Perspectives on the 2018 Farm Bill from Kansas 

February 23, 2017 

By 

Derek Peine 

Chairman, Renew Kansas 

CEO, Western Plains Energy, LLC 

Chairman Roberts, Ranking Member Stabenow, and distinguished members of the Senate 

Committee on Agriculture, Nutrition, and Forestry, thank you for the opportunity to testify 

before you today regarding the 2018 Farm Bill and the roll the ethanol industry in Kansas 

and America plays in the agriculture economy and rural communities. 

My name is Derek Peine, and I am here today representing Renew Kansas. Renew Kansas is 

the trade association that represents the independent ethanol production facilities in our 

state and those who provide services to the Kansas ethanol production industry. Renew 

Kansas serves as a central contact for the Kansas ethanol industry, and as a clearinghouse 

for accurate, reliable information about the many benefits of using ethanol blends to power 

our vehicles. 

I currently serve as chairman of the Renew Kansas Board, and I am also the CEO of Western 

Plains Energy, LLC, an ethanol plant located in Northwest Kansas. Western Plains Energy 

produces 50 million gallons of denatured ethanol annually and employs a team of 48 

people. 

Today I want to talk about the relationship between producers of agricultural products, the 

ethanol industry, the animal feed industry, and rural America in general. Each of these 

groups play a key role in the American economy, and the success of each group is directly 

linked to the success of the others. 

Let me start by sharing a key point about the ethanol industry. Western Plains Energy, like 

most ethanol plants today, was founded with two goals in mind. First, an ethanol plant 

would provide additional value for the producer's grain by creating additional local 

demand. Second, an ethanol plant would provide needed jobs and additional economic 
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value to the communities in region in Northwest Kansas. These two goals are as relevant 

and as important today as they have ever been. 

Positive for Kansas and the United States Economy 

There are 12 dry mill ethanol plants currently in operation in Kansas, producing about 550 

million gallons of ethanol per year. This production creates a local market for 

approximately 200 million bushels of sorghum and corn, utilizing about 20 percent of corn 

and sorghum production in Kansas. Unlike many other areas in the country, ethanol 

produced in Kansas has the ability to utilize these two different feedstocks interchangeably 

in the ethanol production process. In addition, one-third of the grain used for ethanol 

returns to the food stream as wet or dry distillers grains, a valued, high-nutrient livestock 

feed. 

These facilities provide a stable domestic market for agricultural producers during a time 

of volatile challenges such as weather and decreased commodity prices. The ethanol 

industry also provides a consistent supply of high quality distiller grains for Kansas feed 

yards and dairies. Each of the ethanol production plants in Kansas are located in a rural 

area, and they provide more than 380 direct jobs across the state with an average salary of 

over $50,000. Kansas ethanol production annually provides over $2 million in real 

property taxes, $100,000 in personal property taxes, and $53 million in trucking fees.t 

With regard to the United States economy, annually, the industry sustains nearly 400,000 

jobs, contributes $44 billion to the US GDP, and added $24 billion to household incomes.z 

Positive for American Agriculture 

lt is to the benefit of all Americans to ensure a healthy US agriculture sector that is able to 

consistently provide food and nutrition for all of us. 1 believe that the ethanol industry has 

provided the greatest contribution to agriculture profitability in my life time. 

For years, producers were plagued with oversupply of their commodity products which 

resulted in stagnant pricing. ln fact, corn carryout values peaked at nearly 5 billion bushels 

in 1986 from an 8.2-billion-bushel crop and an export value of nearly 1.5 billion bushels. 

Then there was a paradigm shift. With regulatory support from the Renewable Fuel 

Standard, the ethanol industry began to grow. This growth provided a localized end-use 

for corn and sorghum crops, which helped to provide pricing support of those crops. Each 

year, technology has improved to allow producers to obtain increasing grain production 

yields. And each year, the ethanol industry has consumed more and more of that grain. 

Data from the past 36 years (1980-2016) reveals that corn yields have improved an 

Research Department Study 

ABF Fcmwmks U .P 
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average of nearly 2 bushels per acre per year (based on a straight-line average), growing 

from around 91 bushels per acre in 1980 to the record-setting 174.6 bushels per acre in 

2016. During this same time period, exports have been flat (based on a straight-line 

average). Corn demand, including distiller grain demand, by the feed sector has increased 

modestly during this same time frame. 

When we talk with our nearly 200 local farmers who provide us corn and sorghum, we 

hear repeatedly how important a strong, predictable farm safety net is to their operations. 

Many of them cite the federal crop insurance program as something that greatly helps them 

be able to finance their capital intensive farming operations. In order for our business to 

be successful, a symbiotic relationship exists: we need a strong farm economy to keep 

productive and innovative farmers on the land, and they need us as a strong, consistent, 

local market for their grain. 

Today, corn producers face the familiar situation of oversupply and depressed pricing. We 

have just experienced the largest corn crop in US history and the largest corn crop in 

Kansas history, and the projected carryout from this past harvest is expected to be 2.3 

billion bushels. Looking ahead to the future, increasing yield numbers are likely to 

continue to create larger corn production numbers, putting even more downward pressure 

on commodity pricing. 

The good news is that the ethanol industry stands ready to help. Our industry has been 

working hard to create additional demand on both ethanol, and subsequently on corn, and 

to actively position the industry for increased production capacity. 

First, Renew Kansas and the ethanol production industry have been actively developing 

additional domestic ethanol markets, namely markets for ElS {a mixture of 15% ethanol 

and 85% gasoline). We have worked successfully with the privately funded Prime the 

Pump program and USDA's Biofuels Infrastructure Program to provide ElS to consumers 

at 640 locations across 28 states. 3 By the end of2017, these numbers are expected to grow 

to more than 1,000 locations.4 

Within our state, Renew Kansas is a proud partner of the Kansas Better Blends Initiative 

(KBBI), which is an alliance of key partners in the ethanol industry that is utilizing USDA's 

Biofuels Infrastructure Program. In addition to our association, other KBBI partners 

include the Kansas Department of Agriculture, Kansas Corn Commission, Kansas Grain 

Sorghum Commission, United Sorghum Checkoff Program, and ICM, Inc. These 

3 Ciro\'\'th Encr!L\' 

"

1 Gro\Yth r::nerg;, 
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organizations have committed matching funds and in-kind services to make this program a 

success. The USDA Grant is administered by the Kansas Department of Agriculture, and in 

total, KBBI will make available $2.23 million directly to retailers for installation of new or 

retrofit equipment here in Kansas. 

We have also focused on increasing ethanol demand internationally. Ethanol exports have 

been growing, and we surpassed the 1-hillion-gallon mark in 2016. And the trade 

programs authorized under the Farm Bill have been key in helping the ethanol industry 

unlock additional trading partners. Keeping USDA Foreign Ag Service trade promotion 

available to ethanol is a key component to ensuring we can expand our export 

opportunities. 

While there is much optimism about foreign markets for ethanol, I would be remiss if! did 

not mention trade restrictions from China that have shut out American ethanol exports and 

have also reduced the demand for ethanol distiller grains. The recent increases from 5°;(, to 

30% tariff on US ethanol and approximately 70% total tariff on US distillers by China have 

significant impact on US exports. While not related to the Farm Bill, these restrictions will 

hamper the ethanol industry from helping farmers have a stronger marketplace for their 

grain. 

The combination of increasing the ethanol concentration in our domestic fuel supply and 

increased exports can help relieve the current over-supply of domestic corn. This would 

also provide the country and the agriculture community a consistent solution for the 

increased crop production in future years. 

The ethanol industry is also poised to increase production capacity. Innovation is driving 

plants to produce more elhanol from the same bushel of corn through both increased 

conversion yields and the addition of cellulosic ethanol. Yes, it is finally here. Cellulosic 

ethanol production is finally a commercially available option for existing ethanol plants. 

Not only are plants able to convert the starch in grain to ethanol, but they are now able to 

convert some of the fiber in the grain to ethanol as well. Beyond cellulosic, there has also 

been considerable development to allow plants to get more throughput through the 

existing assets with nominal capital investments. These combined technological 

improvements make it possible to for us to expand production capacity to accommodate 

the expected increase in corn production. 
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Continued Support for Ethanol Provides Continued Support for Agriculture 

The ethanol industry can provide immediate support to grain pricing by increasing ethanol 

production capacity. To support increased capacity, we must increase both domestic and 

international demand for ethanol. This is where you can help. 

As committee members, and policy makers, we respectfully request that you advocate for 

policies supportive of renewable fuels- including those not related to the Farm Bill. 

Supportive policies will provide confidence to grain producers that there will be demand 

for their product, and it will provide confidence to existing ethanol producers and investors 

to continue to aggressively pursue innovation and improvements. 

Specifically, we ask that you support ElS as an option for consumers. ElS is a federally 

approved fuel for all vehicles 2001 and newer, and there has been a strong commitment by 

both the industry and the government to build the refueling infrastructure needed to 

expand the availability of this fuel. To turn away from E15 now would mean reduced 

ethanol demand in both tbe short and long-term, hurting a key market for farmers. 

I also want to touch on a regulatory hurdle and market barrier to entry that impacts the 

ElS marketplace. Due to a 26-year old legislative oversight, even though E15 is a less 

expensive, higher performing fuel, it cannot be sold like E10 during the summer months. 

This is 

because of statutory Reid Vapor Pressure (RVP) restrictions. And legislation will be 

introduced in the House and the Senate to address this issue. 

RVP is a measurement of evaporative emissions from motor vehicles. Under the Clean Air 

Act, RVP is capped at 9 pounds per square inch (psi). ElO comes in at around 10 psi, but 

given the fuel's favorable environmental profile it was issued a one-pound waiver under 

the 1990 Clean Air Act Amendments. As the ethanol level in gasoline increases, the RVP 

decreases, resulting in a cleaner fuel. While the RVP ofE15 is less than ElO, measuring 

between 9 and 10 psi, it does not receive the same waiver as ElO, making retailers comply 

with two separate RVP levels. Because of this, fuel retailers are not allowed to sell ElS in 

certain areas of the country during the summer months, even though it is a cleaner fuel 

than ElO. 

For retailers already selling E15, this causes confusion for their clientele who have become 

accustomed to using a less expensive and better performing fuel in ElS. While they can 

purchase E15 the same way as ElO on May 31, from june 1 to September 15 they are 

advised that the exact same fuel they just purchased will not be available to them for 

several months. Most importantly, this acts as an illogical barrier to fuel retailers who are 
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interested in offering ElS, but shy away because of the implications of not being able to sell 

a fuel year-around. In all of this, it is the consumer who suffers. Americans should have the 

option to choose what kind of fuel they use, not be subjected to a "one size fits all" rule. By 

fixing this RVP issue, consumers will have the choice of using a cleaner, higher performing, 

less expensive fuel. 

I also wanted to briefly touch on the Renewable Fuel Standard (RFS), the bedrock policy of 

America's ethanol industry. Corn ethanol is an earth-friendly biofuel that reduces 

greenhouse gas emissions by an average of 43 percent, while some advanced biofuels can 

reduce emissions by 100 percent or more over gasoline. It is because of the market access 

granted by the RFS that we have 12 ethanol plants in Kansas today. While this policy is not 

related to the Farm Bill, it is absolutely a critical component to the success of farmers here 

in Kansas and America. 

I wanted to close by thanking the Chairman and the Committee for allowing me the 

opportunity to testify here today. We are proud of the work that America's ethanol 

industry does to help the Americanfarmer and rancher succeed. We believe very strongly 

that a healthy farm and ranch sector is critical to our success. Farmers provide grain to our 

facilities, and ranchers utilize the feed product we produce. 

The work you are doing today to develop a strong farm bill is critical to the work we do to 

produce feed and fuel, and we hope that our positive message will help you produce a solid, 

predictable Farm bill in Washington, D.C. 

Again, thank you for your time today. 

Respectfully submitted, 

Derek Peine 
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28496.079

Kansas Sunflower Commission 

2626 SE 69th St. 

Berryton, KS 66409 

www.kssunflower.com 

STATEMENT OF THE KANSAS SUNFLOWER COMMISSION 

Farm Bill Field Hearing 

February 2, 2017 

Thank you Senator Roberts, Senator Stabenow and distinguished members of 

the Committee. Welcome to Kansas, my name is Cameron Peirce, I am from 

Hutchinson, Kansas in Reno County, I am so pleased you have chosen Kansas 

as one venue to listen to the impact of Farm Bill programs and funding on 

Midwestern producers. I currently serve as the Vice-Chairman of the Kansas 

Sunflower Commission; I hope to give you some insight into the importance of 

Farm Bill programs to sunflower growers and to all commodity producers in 

Kansas. It is a great honor for me to represents the thousands of farmers who 

produce these commodities. 

First I will give you some quick facts about sunflowers in Kansas and nationwide. 

Annually, Kansas plants between 65,000 and 90,000 of oil seed and confection 

sunflowers. in 2016 USDA estimated 1.6 million acres of sunflowers were 

planted nationwide. Oil seed production makes up 1 A million of those acres with 

non-oil about 200,000 acres. Almost all of those acres are planted in eight midwestern States. The US shipped over 70,000 metric tons of confection 

sunflowers overseas and nearly 39,000 metric tons of sunflower oil in 2016. 

Similar to other commodities, the market price for sunflower has declined over 

the past three years while international production has increased, making it 

increasingly difficult for farms to be profitable. $18.65 million have been paid to 

sunflower base acres in the first to years of the current Farm Bill. In these 

challenging times, Farm Bill programs, and particularly the risk management 

programs, are a vital food security mechanism that keeps American food safe 

and affordable. I am sure you aware Farm Bill dollars are infused back into rural 

America through purchases of farm goods and services, agriculture inputs and 

everyday household needs. They are a part of the financial equation that keeps 

rural America whole. More importantly, these programs keep American 

agriculture successful and give producers a vital safety net. The volatility of 

weather and markets are unpredictable for the Kansas farmer, having a safety 

net in place ensures safe and affordable food can continue to be produced in 

Kansas and across the United States. 
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As we look at the future of the Farm Bill we hope you and your fellow Senators 

understand how important agriculture is to the success of the rural parts of our 

country. Volatility in agriculture markets is managed with good practices and farm 

diversification. The same principles apply when it comes to funding of programs 

within the Farm Bill. We sincerely hope the appropriators in Washington will allow 

your committee the opportunity to determine how funds will be distributed 

amongst the Titles and programs within the Farm Bill. The expertise and 

agriculture backgrounds of the Committee members will be extremely important 

as the limited resources are distributed. 

As you look at priorities in this new Farm Bill please consider that producers still 

need a safety net for crop failure and disaster. Crop insurance has been and still 

is the best tool for these situations. Full funding for the crop insurance program is 

the highest priority for sunflower growers and I suspect that it is the case for all 

commodities. Both production and revenue protection insurance products are 

important options for producers. The flexibility these options offer is important as 

producers weigh input costs, planting decisions and premiums. I encourage the 

Committee to continue the flexibility currently found in federal crop insurance. 

Conservation programs in the Farm Bill are an important part of crop production 

and sunflowers benefit from having those programs in place. Sunflowers are 

generally part of a robust no-till rotation, a practice that has gained wider 

acceptance and implementation through EQIP funding. USDA-NRCS's soil 

health initiative has been a big success in the last few years. Producers, agribusiness and commodity investorsnow understand how important soil health 

practices are to increasing productivity on the land and protecting our natural 

resources at the same time. effort should be made to encourage producers 

to adopt practices that improve our nation's soils. Programs like EQIP need to be 

maintained at current funding levels. 

Some of the newer programs authorized in the last Farm Bill are also important 

for producers as revenue loss coverage programs as we have seen the last two 

years. Specifically the Agriculture Loss Coverage (ARC-CO) and Price Loss 

Coverage (PLC) are important tools for producers to maintain their businesses. 

Both of these programs were well intentioned when authorized, but could use 

some improvements with the next authorization of the Farm Bill. For example, the 

ARC-CO program uses county specific data from the National Agriculture 

Statistics Service to predict revenue from the covered commodity, which works in 

counties where sufficient data exists, but is ineffective where the county specific 

data is insufficient. I hope the Committee will examine some of the flaws in these 

programs as the discussion about reauthorization takes place. 

The USDA Agriculture Research Service (ARS) conducts genetic, pest and 

disease control as well as alternative use research and is a vital component 

toward improving sunflower production and marketability for producers. Although 
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ARS funding is not provided through the Farm Bill, members of Congress must 

understand how research helps producers keep up with the increasing demand 

for food. Sunflower producers have helped in this effort as well. The National 

Sunflower Association and the Kansas Sunflower Commission along with grower 

commissions from other states have provided $2.8 million over a three-year 

period to help fund the ARS Sunflower Unit, whose mission is to significantly 

increase yield production through improved genetics and increased pest 

resistance. 

I understand there will be many more public interests lobbying your committee for 

other programs and overall debt reduction actions. So I will take this opportunity 

to remind you that American agriculture is the original industry that got this 

country started. We still produce the safest and most abundant food worldwide. 

In Midwest States like Kansas, agriculture is still a major contributor to state and 

local economies. We need your support and leadership in Congress to continue 

our tradition and our way of life. With the utmost respect to you and the difficult 

decisions you have ahead, I would ask you remember those of us out in the 

country that put food on your tables as you make these decisions. Thank you. 
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816 SW IYLIR ST.. 

TOPFKA, KS (J66l2 

300 

Feb.23,2017 

The Honorable Senator Pat Roberts, Chairman 

The Honorable Senator Debbie Stabenow, Ranking Member 

Committee Members 

U.S. Senate Committee on Agriculture, Nutrition & Forestry 

PHONt: 785-233-4085 

f OU f-RH: 888-603-2(167 

FAX 785-23J~J03g 

Chairman Roberts, Ranking Member Stabenow and members of the U.S. Senate Committee on 

Agriculture, Nutrition and Forestry, thank you for conducting your first formal field hearing on the 2018 

Fam1 Bill, Hearing.fi'om the Heartland: Pe1:,pectives of the 2018 Farm Billfi·om Kansas, here in our 

state. We arc pleased to welcome you back home, Senator Robctis, for this impmiant meeting. 

Fanners, ranchers, agribusinesses and those serving these constituencies have a vested interest in fedeml 

farm policy. The agricultural industry is the backbone of our great state's economy, so we appreciate 

having this hearing in Kansas. 

Our Association, Members, and our Members Involved in the Hearing Today 

The Kansas Cooperative Council (KCC), founded in 1944, is a voluntary statewide trade association 

representing all types of cooperative businesses with operations in Kansas. Our members include 

agricultural marketing and supply cooperatives, mral electric and telecommunications cooperatives, 

members of the Farm Credit system, and insurance and risk management cooperatives. We are pleased 

that vations co-op industries are represented here today and are taking part in the industry paneL Frontier 

Farm Credit is a direct member and Nemaha-Marshall Electric Cooperative is connected to our 

association through our member, the Kansas Electric Cooperatives, In e. We appreciate their presence 

here and their willingness to share thoughts and concerns on behalf of their sectors of the Kansas 

cooperative community. 

At the time we prepared this statement, we understood that one of our larger local fam1er cooperatives, 

MKC, and DFA, one of our regional members, will be submitting written comments individually. MKC 

will share perspectives from a grain handling and ag supply cooperative, while DFA will share insights 

ti·om the dairy sector. Other co-ops may comment, as welL Whether other cooperative entities appear as 

formal conferees today or provide written comments, we appreciate their contributions to the official 

record of today' s hearing and we commend their testimony to you. 

Our agricultnral cooperative members include the traditional grain elevator and agriculture input 

providers. These local co-ops range in size from a single location operation to those with multiple 

facilities spread across several counties. Although the concrete silo is a popnlar image of"the co-op," our 

agrieultnral membership is broader than just that. Servi-Tech Laboratories is a technologically advanced 

agronomy and laboratory service provider. We arc pleased that their President & CEO. Greg Rnehle, will 

he presenting additional comments today on behalf of Servi-Tech and the Kansas Cooperative Council. 
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As the committee knows, the provisions of the Farm Bill drive agriculture policy and influence on-fann 

operational decisions and related industry decisions. Components in past !arm bills helped encourage the 

t,'fowth of the cotton industry in Kansas. Over time, cotton acreage has expanded to support tour gins and 

one warehouse in our state. Two of the producer-owned gins in Kansas are members of the Kansas 

Cooperative Council, as is the regional marketing cooperative they participate in, Plains Cotton 

Cooperative Association (PCCA). The Kansas Colton Association (KCA), an invited conferee for the 

hearing today. is an associate member ofthe KCC. With KCA's participation today, we will note that 

their comments, both Tom Lahey's presentation and their wtittcn testimony, will provide a more expanded 

description of their challenges with the existing Farm Bill and the cotton industry's needs moving forward 

than what we present today. As we noted in regard to other members above. we respectfully draw your 

attention to KC A's concerns, as colton is an important segment of our Kansas at,>ricultural cooperative 

landscape. 

To fnrther illustrate the diversity within the agricultural cooperative sector, we have the top three U.S. 

fmmcr-m\11ed cooperatives in our membership. Their interests include, among other things, dairy 

production and mm·kcting, animal feed, crop inputs and petroleum refining and distribution. 

The industries represented within onr memhership all have connections of varying degrees to agriculture 

producers and agribusinesses. Thus they are, or can be, affected by federal agriculmral and rural policies. 

That makes most all of our members a stakeholder, in some fashion, in the discussions regarding the next 

Farm Bill. Therefore, we are very appreciative of the opportunity to have a representative on the industry 

panel today and to submit these written comments, as well. 

Need for Increased Emphasis on "Working Lands Programs 

Our agricultural cooperatives, which are owned and controlled by fanners and ranchers, have a 

particularly close connection to fann programs. As yon know, our grain handling members rely otl grain 

production to sustain their businesses. TI1ey need grain to handle, market or store. Obviously, weather or 

pest outbreaks cm1 impact the quantity and quality of grain coming into the elevator. But, fam1 policy 

also impacts what is planted and the number of acres planted. 

Historically, Kansas bas been among the leaders in the number of acres enrolled in the Conservation 

Reserve Program (CRP). Initially, the program was designed primarily to address issues such as erosion. 

Over time, the CRP program has expanded beyond that initial framework to address other concerns 

including enhancement of wildlife habitat. 

Our association has long-standing eonccms with the CRP program's blanket requirement that enrolled 

land mnst he idled for the tetm of the contract. We believe a "working lands" model where stewardship 

concerns arc addressed through integration into active production is a far better approach, as it achieves 

enviromnental benefit while preserving economic productivity. While we do acknowledge that idling 

certain acres may be the appropriate option for some h'found, we would prefer a system where that 

detennination is made on a licld-by-tield basis and not mandated. 

We strongly advocate for addressing more of our environmental goals through working lmtds programs. 

We also encourage better cost-share opportunities for producers willing to participate in working lands 

programs under voluntary public-private pmtnerships which advance stewardship of our natural resources. 
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The stewardship goal should be the main driver for participation rather than payment/cost-share 

availability. 

In late 2007, Kansas embarked on a targeted water conservation initiative and, to accomplish the program 

goal of reducing irrigation, entered into a Conservation Reserve Enhancement Program (CREP) 

agreement with the United States Dept. of Agriculture (USDA). As you know, CREP is a specialized 

program under the Conservation Reserve Program (CRP). As a specialized CRP program. producers 

enrolling in the CREP pro1,•:ram had to quit fanning that land and place it under a cover crop. The goal of 

Kansas' particular water quantity CREP was water conservation, and that goal could have been 

accomplished by conwrting to dry land production if the land was capable of sustaining that practice. But, 

under the tenus of the CREP agreement, the land had to be idled no matter what. We do acknowledge 

that a significant portion, maybe even all the top tier acres actually enrolled, might not have been well 

suited for dryland production in most weather years. Bnt, it is troubling to our members that there is not 

even the possibility to consider whether dryland farming could be apprnpriate on some acres. 

The concern is magnified for us because the decision to enter into a CREP was largely driven by cost 

rather than stewardship. At the time, the cost-shar·e available nnder the CREP program allowed the state 

to leverage federal dollars on an eight-to-one ratio. Kansas could draw down 80 percent oftbe funding 

through USDA with a 20 percent match. That match could include state dollars, local support and even 

state in-kind support to reach the 20 percent threshold. Nowhere ncar that arnmmt of federal cost-share 

support was available tmder working lands programs, so Kansas pursued the CPEP, because that is where 

the money was. 

We believe it is entirely possible for environmental programs, and the associated fnnding, can be designed 

so that stewardship goat not the amount of matching funds drives decision making. We respectfully 

encourage your committee to keep this in mind as you work through the details of the 2018 Fann Bill ar1d: 

Adjust conservation programs to allow for a greater degree of crop production where that is not 

significantly inconsistent with the conservation goal sought; and 

Channel conservation program funding more heavily toward working lands programs where 

conservation and crop production can co-exist 

We do recognize we are asking you to consider greater emphasis on working lands programs that continue 

a;,>riculture production at a time when we have tremendous amounts of grain in this state still in temporary 

storage after bountiful2016 harvests. And. we do recognize that conservation pro1,>rams that idle land, in 

essence, can influence supply and thus commodity prices. So it may seem counter-intuitive to some that 

we place so much emphasis on working lands programs over those that take land out of production. But 

in a longer-term view, we think that a blanket policy to idle every acre enrolled in a program, no matter 

what the conservation goal of that particular enrollment may be. is an unnecessary restraint. 

Importance of Farm Credit System to Cooperatives and the Need to Maintain Jurisdiction within 

the Ag Committees 

The Kansas Cooperative Council membership includes Fann Credit associations in Kansas and their 

lending hank, CoBank. The Farm Credit System was created with a unique mission, ownership stmcture 

and authorizing legislation as compared to many other t!nancial institutions. As you know, jurisdiction 

over the system rests in your committee and your House counter-part. We continue to believe that this is 
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the proper venue as the Ag Committee is best suited to understand the challenges faced by the Farm 

Credit System owners- their farmers, ranchers, and cooperative members. 

The Farm Credit System is an important financial partner in rural Kansas and rural America. The system 

is there to support our rural cooperatives, as well as individual producers. 

Crop Insurance 

Crop insurance is an important component of an overall risk management plan and safety net component 

for many producers. The additional economic stability that comes with that ripples beyond the farm gate 

to area agribusinesses and the rural economy when producers are still able to pay their bills at the co-op 

and buy groceries. 

Rural Utility Service (RUS) 

Rural Utility Service loans and Joan guarantees are vital to our rural utility members, their local 

member-owners, and rural communities. The RUS serves as a reliable source of credit for rural electric 

cooperatives (RECs) and RLECs. Loans through RUS allow local RECs and RLECs to upgrade systems, 

improve capacity, increase efficiency, and meet the increasing demands of 21" century customers. 

Rural Economic Development loans and grants link cooperatives with their local communities to spur 

economic development, retain jobs and create new employment opportunities. Adequate funding for RUS 

loan programs is important in sustaining rural Kansas and rural America. 

Ympt·ovemeuts to Rural Infrastructure 

Improving our nation's infrastructure appears to be an impottant component of President Trump's agenda. 

Rural America has many needs that might be addressed under infrastructure improvement plans. In 

Kansas, our inti'ast:mcture needs include repairing roads and bridges and expanding broadband. 

Nationally, agriculture shippers are also active in seeking improvements to our nation's locks and dams. 

The Fam1 Credit system, RUS, and other USDA Rural Development program areas have a strong histmy 

of supporting :mral community infrastructure improvements, and with the additional emphasis this 

administration seems ready to focus on intinstructure needs, such entities can become even more 

important players in this space. 

Funding 

Under the 2014 Fann Bill consideration, voluntary funding reductions resulted in an estimated $23 billion 

over 10 years, based on calculations at that time that would be redirected to deficit reduction. The 

January 2017 baseline estimates indicate that just nutrition and crop insurance alone will spend 

approximately $100 bi!lion less than anticipated. So, it is vitally important that the budgetary savings 

coming ont of the 2014 Fmm Bill be recognized when we look at funding components of the 2018 hill. 

Other Overall Concerns 

In preparing these comments, our mral telecommnnications interests noted the overarching paperwork 

burden associated with participation in government programs. We tmst that many of our cooperative 

members would echo the same concem, whether they arc participating in a program that falls under the 

Fam1 Bill or any other area. To that extent, where there are opportunities for this committee to encourage 

streamlining of processes and paperwork, whether in Farm Bill legislation or by direction to agencies 

administering Farm Bill programs, it would be helpful to our members. 
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Thank you for the opportunity to provide comments on in preparation for the 2018 Farm Bill. As a state 

heavily dependent on the broader agricultural economy, federal timn policy has a significant impact on 

many of our co-op members and their local cooperative member-owners. 

Sincerely. 

JMN4 L. Jw.J. 

James L. Jirak, Chairman of the Board 

Kansas Cooperative Council 

J..edie-9. 

Leslie J. Kautlnan. 

~ 

PresidcntiCEO 

Kansas Cooperative Council 

Laboratories 
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Clay Scott 

Family Farm and Ranch Ulysses, Ks 

Raising irrigated/dryland corn and hard white wheat, cattle and boys 

Testimony Before the United States Senate Committee 

On Agriculture, Nutrition, and Forestry 

McCain Auditorium at Kansas State University 

Feb 23, 2017 

"Hearing from the Heartland: Perspectives on the 2018 Farm Bill from Kansas." 

Written Testimony 

INTRODUCTION 

Welcome to Kansas. Chairman Roberts -welcome home-, Ranking Member Stabenow and 

members of the committee. Thank You for the opportunity to speak about production 

agriculture and those issues concerning the development of the 2018 farm bill. My farm is 

located in far southwest Kansas-about 90 miles west of Dodge City- near where my great 

grandfather homesteaded years ago. We are home to several large beef feedlots, dairies and 

swine facilities. Including a group of dairymen near Sumner Michigan who have recently 

started a large expansion of their existing heifer facilities- north and west of Ulysses. 

In addition to farming I am actively involved in water. I am a delegate to the Kansas Water 

Congress, a member of the National Water Resources Association (NWRA), and a board 

member and past president of the Southwest Kansas Groundwater Management District. 

Together members of the NWRA and Kansas Water Congress provide water to millions of 

individuals, families, and agricultural producers in a manner that supports communities, the 

economy and the environment. This connection between agriculture and water is clear and of 

growing importance. In the U.S. we are fortunate to spend less than ten percent of household 

spending on food, this is far less than many other developed countries. A key input to keeping 

food affordable is ensuring a reliable supply of water. 

INFRASTRUCTURE: 

As Congress and the Administration discuss a potential infrastructure package it is 

important that it considers the vital importance of water infrastructure. Water and food are 

both strategically important resources and without a strong commitment to water 

infrastructure our nation's ability to produce food will be hindered. Water infrastructure is key 

not only to food production. It is also vital for power generation, manufacturing, and human 

health and safety. Water infrastructure is one of the most important components of our 

nations infrastructure system. This importance needs to be recognized. 
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TECHNOLOGY: 

Technology in agriculture is changing our world at a rapid pace. Advancements in breeding 

and biotechnology are bringing improvement to our fields and when combined with new 

techniques and practices these stronger plant genetics are pushing our yields results higher 

while our inputs are being reduced. Mobile drip irrigation, soil moisture probes, and 

conservation tillage are practices that are delivering solid results and producing improved soil 

health and increasing sustainability. 

I would like to note that proper environmental stewardship is critical to bringing this 

technology to the market at an affordable cost to the farmers. Streamlined review of 

technology guided by sound science and combined with a proper market acceptable release is 

absolutely imperative. USDA and congress have helped this immensely in last few years. 

Market disruptions from non-approved traits to the export supply are not acceptable. These 

non-approved traits create huge expenses for exporters, disrupt supply channels due to 

segregation, weaken farm revenue and feed the notions of those opposed to production 

agriculture. I would urge this committee to continue improvements upon these concerns. 

Attached are the first year study results from a Natural Resources Conservation Service (NRCS) 

Conservation Innovation Grant (CIG). Attachment 1-Mobile Drip Irrigation 

CROP INSURANCE: 

The current crop insurance program is our most crucial risk management tooL It is the 

basis for our ag lending industry and farm credit. Improvements are needed. During the 2016 

crop year, Kansas saw record production in many areas of the state. This exceptional 

production forced cash prices much lower. While futures prices did decline most of the losses 

occurred via the increased basis adjustments. Yet, farmers who rely on the revenue policy of 

their multi-peril insurance for price loss coverage were disappointed to see no losses paid 

because the pricing was done on the futures only side of the contract. None of Kansas grain 

elevators, coops, or farmers were able to deliver against the Kansas City Board of Trade wheat 

contracts due to logistics. Thus the cash price fell while the "hedged bushel" leveled off. I 

suggest that MPCI products have a method of correction to represent equivalent cash prices 

paid vs the Futures Contract of Record. If the price of Kansas City Futures contract doesn't 

represent the price of wheat, what is it really worth? 

Limited water irrigation coverage. My farms and region suffer from limited well yields. For 

several years we have incorporated water technology systems such as soil moisture probes to 

accurately access the root profile in our soils. Together with selected hybrids with the drought 

technologies, we are changing our production practices to produce very strong yields. One 

difficulty is we cannot report these fields as irrigated due to yield goal limitations/definitions 

nor do they fit a true dryland field. As a result, we are reporting on Farm Service Agency (FSA) 

and Multi Peril Crop Insurance (MPCI) reports as dryland with water applied. A third definition 

of coverage would be useful to areas where intensive water management are called for and do 
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not force additional irrigation in challenged areas. RMA will be offering this needed policy for 

2017 by written agreement only. Its inclusion into the next farm bill is needed for areas of 

intensive or expanded water management. 

ARC/PLC PROGRAM: 

The current crop support plan is difficult to understand. Counties suffer from reporting 

errors that distort program payments. Some of these reporting errors may be self inflicted. 

The Risk Management Agency (RMA) requires acres where limited irrigation water is applied to 

fields yet have a yield goal below current Average Production History (APH) to be called 

dryland. The majority of the wet acres on my corn fields meet this definition. However, Farm 

Service Agency (FSA) declares acres with any water applied to be called irrigated. Thus, a 

confusing set of data that corrupts accurate results. The coordination of terms and practices 

between RMA and FSA must be revisited in the next farm bill. 

WATER CONSERVATION: 

The greatest resource in western Kansas is water. Like all states in the west, we strive to 

increase efficiencies and improve on new technologies to extend and preserve this resource. 

The new mobile drip irrigation systems (a new technology and practice) are helping take these 

efficiencies to a maximum extent. Ultra low drops with mobile drip lines place the irrigation 

just inches above the root zone to provide the exact amount water needed and eliminate most 

evaporation and runoff possibilities. 

Water conservation programs -like those found in the EQIP program- must reward those 

working towards conservation. Using historic usage only encourages maximizing usage prior to 

enrollment. Those who are already working to conserve have a larger burden to achieve the 

same gains. Conservation is a key to sustaining this resources and one which a robust 

partnership where Farm bill programs and Farmers and Ranchers can succeed. 

CONSERVATION RESERVE PROGRAM: 

The conservation reserve program is probably the best practice for environmental 

stewardship in the farm bill. Approving quality lands to meet quotas over environmental 

needs in others is not serving the interest of it intended goal. As with all programming in the 

next farm bill, please look to the environmental return of enrollment and not to retirement. It 

is also important to ensure that USDA adheres to contract agreements when implementing 

CRP and CREP. 

GRASSLAND and FOREST HEALTH: 

Forest and grassland health are keys to protecting the water supply of many western states. 

The Committee took steps to improve forest health in the 2014 Farm bill and Chairman 

Roberts introduced the Emergency Wildfire and Forest Management Act in the last session of 

Congress. We greatly appreciate Chairman Robert's and the Committee's attention to this 

important issue. As the Congress works to address forest health issues NWRA believes it is 

critical that both forest management reforms and resolution of the "fire borrowing" issue are 
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addressed in comprehensive legislation focused on improving the health and resiliency of our 

forests. 

DUPLICATIVE PERMITTING: 

NWRA also encourages the Committee to clarify that a National Pollutant Discharge 

Elimination System (NPDES) permit is not required for pesticides already approved under the 

Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). The judicious use of pesticides plays 

an important role in the United States economy and the livelihoods of countless individuals. 

Pesticides help grow the food that feeds the world's growing population. They can also help 

improve the efficiency of water delivery and carbon free hydropower generation by keeping 

infrastructure free from invasive weeds that can reduce water delivery and impede power 

generation. It is unnecessary to require a NPDES permit in addition to FIFRA licensing. It 

creates an additional layer of unnecessary red tape. 

THANKS: 

I have three sons, two enrolled this last fall at Fort Hays State University with an eye to 

returning to the farm. It is a difficult and expensive transition. Support for the beginning 

farmer and rancher programs is a helpful resource and a great investment in sustaining new 

blood of our industry. I would encourage continued support that your committee has shown 

for these projects. 

I appreciate the opportunity to provide testimony to your committee today. I would like to 

thank you for your diligence and honest effort to attend the Kansas segment of the 2018 Farm 

Bill Hearings and I thank you for hearing our prospective of agriculture 

Thanks again. 

Respectfully submitted, 

Clay Scott 

Attachment 1 

NRCS CONSERVATION INNOVATION GRANT 

2016 Annual Progress Report 

Grantee: Southwest Kansas Groundwater Management District No. 3 

Project Title: A Demonstration and Evaluation of the Potential for Mobile Drip Irrigation (MDl) 

Technologies to Reduce Water Use and Extend the Usable Life of Groundwater Supplies 

Agreement Number: 69-6215-!5-0002 
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Project Directors: Trevor Ahring 

Clay Scott 

Mark Rude 

Contact Information: 

Phone: (620) 275-7147 

E-Mail: ~.'-"~~'"""""'~c2"e; 

Address: 2009 E Spmce St. 

Garden City, KS 67846 

Period Covered by Report: 09/Hl/20 15 12/3112016 

Project End Date: 09/30/2018 

Project Status 

There are 10 fields that have been equipped with mobile drip tape on the inner 3 spans or 

evaluation in the CIG project. These fields are located in the following sections, all within 

Stanton and Grant Counties. Kansas: 

Sec 21-28-38 

Sec 8-28-38 

Sec 18-28-3 8 

Sec 3-29-39 

Sec 4-29-39 

Sec 31-27-39 

Sec 14-27-39 

Sec 21-27-39 

Sec 16-27-39 

Attachment 1 

See Fig. I for a complete project map. including land with fully-inigated com, limited-iJTigation 

com, and inigatcd wheat 
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Figure 1. Project map. All fields located in Grant and Stanton Counties. 

Attachment 1 

Each project field has been equipped with Dragon-Line® mobile drip irrigation on 

the inner three spans of a center pivot system. Irrigation was scheduled using soil moisture 

probes to maximize yield and minimize water use. 
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Field Inputs 

Seeding Rate: All fully-irrigated corn ground was seeded at a rate of 27,500 spa. Limited 

itTigation corn ground was seeded at a rate of 19,600 spa. Irrigated wheat was 

seeded at a rate of 90 lb/ac. 

Fertilizer: Fully-i!Tigated com was fertilized with 225 lb N. Limited inigation com was 

fe1iilized with 160 lb N. Wheat was fertilized with I 00 lb N. 

Water: The summer of2016 was wetter than normal, producing 19" rain. This high 

rainfall, combined with good management, allowed for project wells to be shut otT 

for 33 days in July and August. Fully-in·igatcd com ground received 14.7" of 

iiTigation water. Limited irrigation corn received 9 .8'' of irrigation water. Wheat 

received 8'' of inigation water. 

Yields 

Yields tor each project field were as follows (no hail loss unless indicated otherwise): 

Section 31-27-39: 241 bsh/ac (fully-irrigated com) 

Section 14-27-39: 229 bshiac (fully-irrigated com) 

Section21-27-39: 202 bsh/ac (w/29% hail damage) (fully-irrigated corn) 

Section 16-27-39: 203 bsh/ac (w/19% hail damage, 11% grain snap) (fully-irrigated corn) 

SW \'4 Section 3-29-39: 222 bsh/ac (fully-inigated corn) 

NE Y. Section 3-29-39: 98 bsh/ac (irrigated wheat) 

SE Y. Section 4-29-39: 227 bsh/ac (fully-inigatcd com) 

Section 18-28-38: 231 bsh/ac (4% hail loss) (fully-inigated corn) 

220 bsh/ac (limited irrigation com) 

100 bsh/ac (inigatcd wheat) 

Section 8-28-38: 233 bsh/ac (fi1lly-irrigated com) 

215 bsh/ac (limited irrigation com) 

80 bsh/ac (irrigated wheat) 

Section21-28-38: 228 bsh/ac (lhlly-irrigated com) 

226 bsh/ac (limited in·igation com) 

48 bsh/ac (wheat streak mosaic virus) (inigatcd wheat) 

Attachment l 

There were no significant yield differences on the acreage covered by mobile drip inigation 

compared to the acreage covered by drop nozzles. This may have been because of the higher 

than average rainfall, or it might have been because the technology docs not significantly affect 

yield. 
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Water Savings 

For each of the project fields, nozzles on the inner 3 spans were replaced with mobile drip 

in·igation, covering 196.4 project acres. Of these acres, 133.4 acres were fully iiTigatcd corn, 

with 14.7'' itTigation water applied. 42 acres were itTigatcd wheat, with 8" irrigation water 

applied. 21 acres were limited irrigation com with 9.8" irrigation water applied. The total water 

applied with mobile drip technology was 208.6 AF. All project wells are replacing nozzles in the 

inner towers that apply water at a rate 0.204 ac-in/hr with mobile drip inigation that applies 

water at a rate of 0.126 ac-in!hr. The water usc on those acres with the old drop nozzle packages 

would have been 337.5 AF. The total water savings for the 2016 project vear were 128.9 AF. 

Other Benefits 

Replacing inefficient nozzles in the inner 3 spans improved the overall unifom1ity of pressure in 

the center pivot system, allowing nozzle size to be increased in the outer spans. This improved 

the rate of application without increasing the overall pumping rate, allowing the systems to be 

shut off for more days than they othcnvise would have. This reduces operational cost and saves 

energy. 

Budget 

The overall project budget is $57.800, including $25,200 lederal funds and $32,600 non-federal 

funds. To date, $15,076.65 of federal funds have been spent. This funding was used to help 

purchase mobile drip irrigation systems and soil moisture monitoring equipment. $12,564.35 of 

non-federal funding has been spent. This includes $9,064.35 cash for purchase of mobile drip 

irrigation systems and soil moisture monitoring equipment It also includes $3.500 in-kind 

cont1ibution for reporting and creation of an informational video (can be seen at 

This leaves a remaining budget of$30,159. This includes Sl 0,123.35 federal fi.mding and 

$20,035.65 non-federal funding. Equipment costs to date have been less than anticipated, so it is 

likely that the project will be concluded without exhausting the remaining federal and nonfederal budget. 

Work to be Completed 

There are still two years remaining for evaluation. Each project fidd will continue to be 

evaluated and GMD3 will create a final repmi, including cost-benefit analysis, as well as a 

recommendation to NRCS whether or not they should incorporate this practice into EQIP. 
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Written Testimony of the 

National Pork Producers Council 

Hearing from the Heartland: 

Perspectives on the 2018 Farm Bill 

Before the 

Senate Committee on Agriculture, 

Nutrition & Forestry 

Manhattan, Kan. 

February 23, 2017 
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Introduction 

The National Pork Producers Council (NPPC) is an association of 43 state pork producer 

organizations that serves as the voice for the nation's pork producers. The U.S. 

pork industry represents a significant value-added activity in the agricultural economy 

and the overall U.S. economy. Nationwide, more than 60,000 pork producers marketed 

more than 118 million hogs in 2016, and those animals provided total cash receipts of 

nearly $240 billion. Overall, an estimated S23 billion of personal income and $39 billion 

of gross national product are supported by the U.S. pork industry. 

Iowa State University economists Daniel Otto, Lee Schulz and Mark Imemmn estimate 

that the U.S. pork industry is directly responsible for the creation ofmorc than 37,000 

full-time equivalent pork producing jobs and generates about 128,000 jobs in the rest of 

agriculture. It is responsible for apjJroxu1natcly 102,000 jobs in the manufacturing sector, 

mostly in the packing industry, and 65,000 jobs in professional services such as 

veterinarians, real estate agents and bankers. All told, the U.S. pork industry is 

responsible for 550,000 mostly rural jobs in the United States. 

U.S. pork producers today 25 billion pounds of safe, wholesome and nutritious 

meat protein to consumers worldwide, and exports add significantly to the bottom line of 

each U.S. pork producer. U.S. exports of pork and pork products totaled 2.3 million 

metric tons a record-- valued at $5.94 billion in 2016. That represented almost 26 

percent of U.S. production, and those exports added more than $50 to the value of each 

marketed. Exports supported approximately 110,000 jobs in the U.S. pork and allied 

industries. 

Obviously, pork producers have a strong interest in the next Fan11 Bill. NPPC has fon11cd 

a Farm Bill Policy Task Force to gather input from producers fi·om around the country. 

The task force will hold a number to review and evaluate many of the Fann 

Bill issues that will affect the U.S. pork industry. NPPC is committed to working with 

Congress to help craft the 2018 Fmm Bill. 

NPPC Written Testimony on the Next Farm Bill, Senate Committee on Agriculture, Nutrition & Forestry 

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As it has requested in every Fam1 Bill on which it has weighed in, the U.S. pork industry 

asks that Congress in the next Farm Bill maintain the U.S. pork industry's competitive 

strengthen its competitiveness and defend the industry's competitiveness 

supporting provisions that would be beneficial to agriculture and by opposing 

unwarranted and costly provisions and regulations that would negatively affect America's 

tanners and ranchers. 

There arc several issues producers would like Congress to address in the next Fmm 

Bill that could help U.S. pork producers. 

Foot-and-Mouth Disease Vaccine Bank 

Foot and Mouth Disease (FMD) is one of the most economically devastating foreign 

animal diseases affecting animal agriculture. It is a11 infectious and sometimes fatal viral 

disease that affects cloven-hooved animals, including and cattle. It is easily spread 

through a number of methods, including through the air, contact with contaminated 

equipment and by predators. An outbreak today of the disease, which last was detected in 

the United States in 1929, likely would cripple the entire livestock sector. Tn addition to 

causing harm to production animal the economic consequences undoubtedly 

would ripple throughout the entire rural economy, from input suppliers to packers and 

from processors to consumers. 

FMD is endemic in Africa, Asia, some South American countries and the Middle East. 

The FMD virus has seven viral serotypes and more than 60 subtypes, with wide strain 

variability. Sporadic outbreaks with dif1erent types continue to pop up in countries 

around the world. 

Increased travel and trade between affected countries make the United States ,.,.,,,r,o,om 

vulnerable to introduction of the disease. Now, the country has to confront the possibility 

ofterrorists using FMD as a weapon to inflict significant damage to the U.S. economy 

and affect food availability. 

NPPC Written Testimony on the Next Farm Bill. Senate Committee on Agriculture. Nutrition & Forestry 

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Tn the U.S. Department ofAl,'Ticultnre's Foreign Animal Disease preparation strategy 

document on the phases and types of an FMD outbreak, Dr. James Roth, professor and 

researcher at Iowa State University, identified four phases of the disease: 1) confinnation 

of an outbreak (typically three days); 2) surveillance and epidemiological work necessary 

to provide timely evidence of the extent of an outbreak to support decision making by 

government officials; 3) recovery from the disease; and 4) freedom fl·om the disease 

(possibly with vaccination). 

He categorized FMD outbreaks as six types: Small Focal, Moderate Regional, 

Large Regional, Widespread or NationaL Catastrophic U.S. and Catastrophic North 

American. which includes Canada and Mexico. 

Given the structure oftbc U.S. livestock the likelihood of having a Small Focal 

or Moderate Regional outbreak is remote. The livestock industry estimates there arc 

approximately 1 million pigs and 400,000 cattle moved daily in the United States, some 

over long distances. In addition, there are numerous auctions, fairs and exhibits that 

concentrate large numbers of animals in a location, providing the opportunity for 

one infected or exposed animal to spread the disease to many animals. Thns, it seems 

unlikely that, if the United States had an outbreak, it would be on the smaller end of 

Roth's scale. 

The World Organization for Animal Health (OlE) sets standards for managing and 

determining a country's disease status. Those standards range fi·om "stamping out" 

(killing all infected and exposed animals) to tl·ee ofFMD, or "free with 

vaccination." 

After watching countries such as the United Kingdom, Korea and Japan, whose livestock 

populations pale in comparison to the United States, stmggle to manage FMD outbreaks 

killing large numbers of animals, USDA's Animal and Plant Health Inspection 

Service (APHIS) changed its policy on the disease from "stamping out" to 

using vaccine to limit the 

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This policy was endorsed by the U.S. livestock industry as a cheaper and more 

practical alternative given the enonnous size of the U.S. livestock herd and the movement 

of livestock around the country. The United States 

FMD outbreak. 

cannot "kill" its way out of an 

The though. is the United States does not have enough FMD vaccine available 

nor could a sufficient quantity be obtained in time to implement an effective control 

program. 

U.S. law prohibits storing live FMD virus on the U.S. mainland, so production 

companies arc the only source of finished vaccines. The United States is the only country 

in the world that maintains its own vaccine bank, which is maintained at the Plum 

Island Animal Disease Center on Plum Island, N.Y., and which has a limited number of 

antigens. 

Currently, if there were an FMD outbreak in the United States, antigen would be shipped 

to a vaccine manufacturer in either England, or Lyon, France, to be tumed into 

finished vaccine and shipped back to the United States. After three weeks, the process 

wonld produce only 2.5 million doses of vaccine. 

Iowa State's Roth estimates that at least 10 million doses would be needed during the 

first two v;ecks of an outbreak. there is no surge to produce additional 

doses of vaccine; all the vaccine production capacity in the world is currently in use 

other countries. 

Additionally. it must be noted that the vaccine 

Bank and tlms includes Canada and Mexico. 

bank serves as the North American 

Over the past several years, the United States has made progress in FMD 

preparedness through the development of secure supply plans for milk, pork and beet: 

and APHIS continues to work with the livestock indnstry to improve its preparedness 

NPPC Written Testimony on the Next Farm Rill, Senate Committee on Agriculture. Nutrition & Forestry 

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capability. 

priority in future 

and improving vaccine availability must be a 

Establishing a more robust FMD vaccine bank will a increase in 

budget outlays. (The current FMD efforts are funded at just $1.9 million.) But the cost 

pales in comparison to the economic cost of an FMD outbreak in the United States. 

Because North America is f!·ec of FMD, an outbreak of the disease in the United States 

would immediately shut off all exports of U.S. livestock, meat and dairy products, 

a precipitous drop in livestock markets. Since U.S. consumers have little 

knowledge of the disease, which cannot atiecl people, there also likely would be serious 

disruptions in the domestic market because of decreased demand for those products. 

According to one recent study, prevention of FMD is estimated to be worth $137 million 

a year to the U.S. pork industry. 

Iowa State University economist Dermot estimates the cumulative of an 

FMD outbreak on the beef and industries over a 10-year period would be $128.23 

billion. The annual jobs impact of such a reduction in revenue would be 58,066 in direct 

employment and 153,876 in total employment Corn and soybean farmers over a decade 

would lose $44 billion and nearly $25 billion, respectively, making the impact on those 

four industries alone almost $200 billion. 

The history of government involvement in disasters like an FMD outbreak is that, once a 

problem occurs, unlimited resources are committed to control ofthe situation. In 

the case of FMD, there is a clear opportunity to invest in a robust vaccine bank that 

would limit the economic impact on producers, feed suppliers and consnmers and reduce 

the govemmcnt's cost for control and eradication of the disease. 

A recent study by Kansas State estimated the cost to the U.S. government of 

eradicating FMD would be $1 I billion if vaccination is not But costs could be 

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cut if vaccination is used, and, the estimated~ depending on the 

strategy losses to consumers and could be cut by 48 percent. 

should work with the administration to address the gap in the 

preparedness for an FMD outbreak. Whether the disease introduction is the 

result of terrorism, careless travelers or carried on traded commodities, the calamitous 

result would be the same: devastation to the U.S. livestock industry and a hit 

to the U.S. economy. 

NPPC urges to the and $150 million a year in "''""';Q"""'' 

funding for USDA APHIS to protect the U.S. livestock from an FMD outbreak. 

the Farm Bill should direct APHIS to: 

• Contract for an offshore, vendor-maintained vaccine bank that would have 

available concentrate to protect all 23 of the most common FMD 

strains currently in the world. 

• Contract for a 

the first two weeks of an outbreak 

• Contract with an intemational mr•m,,filr·n 

least 40 million doses. 

Disease Surveillance 

for the snrge to produce at 

An adjunct to a robust FMD vaccine bank is a world-class disease surveillance system. 

Being able to detect and any disease that could affect the U.S. food supply is 

vital to the continued Yiability of the U.S. 

disease (FAD) into the U.S. livestock herd, but there is evidence that the 

to prevent such an introduction needs to be 

animal 

net in 

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Late last year, the House Committee held a on American Agriculture 

and National which the ofthe U.S. food supply to the 

for FAD introduction terrorists or accident 

Additionally, in October 2015, the btp:artl:sanBtue Ribbon Study Panel on Biodefcnse, 

co-chaired by fonner Dcpartlnent of Homeland and fonner 

Sen. Joe Lieberman, released a report that the need for itwtwnvin'" 

system for protecting the U.S. livestock herd and the nation's food supply from FADs. 

The threat 

the 

the first case in the United States ofPoreinc Endemic Diarrhea virus was identified on an 

Ohio hog fam1. That disease, which USDA detennined likely came fi·om China, 

throughout the Midwest and killed between 8 million to 10 million young 

over an 18-month 

Other bacterial and viral diseases arc around the world, and that is the reason the 

U.S. pork industry has devoted resources to endemic and foreign animal 

diseases, funding more than 120 research and more than $5 million for 

studying, and swine diseases over the past 10 years. 

The outbreak of HI N l influenza in 2009 demonstrated the interrelationship of human and 

animal health when new and diseases. From that the 

U.S. pork industry learned that a and Integrated Surveillance System 

(CISS) is needed to ensure the capture of data about a broader range of diseases. 

The industry has been with USDA APHIS and the Centers for Disease Control 

and Prevention (CDC) to develop a CISS, continuation and expansion of 

swine influenza surveillance. ofthis is critical to the 

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expanding U.S. pork exports. The CISS is designed to provide an warning system" 

and to allow for development of response plans in advance of an epidemic. 

The U.S. pork industry is collaborating with APHIS to test implementation of a C!SS and 

to detenninc how it can be connected to an animal traceability system. Cun·ently, the 

most significant shmicoming is fhnds to build the infrastructure to accommodate a more 

robust system of surveillance. 

The ability to expand and strengthen surveillance to include other diseases will help 

increase expmis. Reducing surveillance, however, would other countries 

justification to restrict U.S. expmis because of inadequate surveillance data. 

U.S. pork producers also support USDA's animal traceability system. An effective 

traceability system is critical to the national animal health infi·astmcture and is required 

for certification by the OlE. The ability to quickly trace diseased and exposed animals 

during a foreign animal disease outbreak would save millions of animals, lessen the 

financial burden on the industry and save the American taxpayer millions of dollars. 

With support from all sectors ofthe industry, approximately 95 percent ofU.S. pork 

producers' premises already are registered under the USDA livestock identification 

program. Premises identification is the key to a goal of tracing an animal back to 

its fam1 of origin within 48 hours, which would allow animal health officials to more 

quickly identify, control and eradicate a disease; prevent the spread of a disease; and 

make certifications to trading partners about diseases in the United States. 

NPPC requests that Congress include in the Farm Bill authority for $30 million a year for 

the National Animal Health Laboratory Network, which conducts diagnostics on animal 

diseases, and $70 million a year for block grants to the states tor disease surveillance and 

other suppoti. 

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Agricultural Research 

NPPC supports federal funding for research, education and extension 

programs by improving the quantity and quality of USDA research through the 

Agriculture and Food Research Initiative (AFRI). Basic, competitive agricultural research 

allows America's fam1ers to remain globally in the face of a growing world 

population, improves public health and strengthens national 

AFRI is the USDA's competitive research program and makes n"''''-'r"'"'~'''u"t 

competitively-awarded research grants. The grants fund basic and applied research, 

education and extension to colleges and universities, agricultural experiment stations and 

other organizations conducting research in priority areas that are established partially in 

every Fann Bill. 

The 2008 Fatm Bill required AFRI to make available 60 percent of grant funds for basic 

research and 40 percent for applied research. Despite being authorized for $700 million in 

the 2008 Farm Bill and reauthorized in the 2014 Fann Bill, the program never has 

received near full funding in the appropriations process. In fact, USDA's 

overall resem·ch funding has decreased 30 percent since 2009. 

While other federal research and development budgets have grown over time, 

research funding has This has oecuHed despite studies eorlsJs:ten:tly 

reporting high social rates of return -between 20 percent and 60 percent annually. The 

United States is falling behind developing nations in its commitment to funding 

agricultural research, which has created rapid increases in the country's ""'''h"'hr.t~, 

Amid growing challenges, such as the threat of new diseases, the position as 

the world leader in agricultural research and technology should be an overarching goal. 

NPPC supports increasing the funding for ~m·•r••ltn research to ensme that the U.S. 

livestock indusl!y maintains its "''"'"'"'"'" in the global 

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Production and Marketing Regulations 

NPPC works on behalf of America's producers to ensure that laws and rules don't 

impose unnecessary costs on the U.S. pork industry, restrict it from meeting consumer 

demands in an economical manner or prevent market-based solutions to issues. The 

structure of the pork production and packing sectors should be allowed to change with the 

demands ofthe global This includes allowing producers and 

packers to adopt new technologies and pricing and marketing mechanisms that enable the 

fmmer to reduce their risks and the latter to captnre economics of scale. 

The U.S. pork-packing sector is the envy of the world in tenus of etTiciency and food 

safety, and legislation and regulation should not take away or hamper that source of 

intemational advantage. Allowing producers and packers the freedom to develop new 

ways of doing business will enhance the value of U.S. pork products at home and abroad 

and reduce costs and risks. 

methods, including contracts, to meet the needs of a diverse marketplace, 

strongly opposes any provision that would eliminate or restrict such mechanisms. 

producers' options could force the livestock markets to revert to an inefficient 

system used more than half a century ago in which animals were traded in small lots and 

at prices determined in an open-market bid system. 

Dictating how U.S. pork producers sell and raise their animals and how packing 

companies buy livestock would the competitiveness of the U.S. pork 

industry. Mandates whether pushed by lawmakers or activists must not stand in the 

way of the free market. 

Of particular and immediate concern to the U.S. industry is the Fmmcr Fair 

Practices Rules, specifically an Interim Final Rule, which was issued in the final weeks of 

the Obama administration. 

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Written by USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA), 

the Interim Final Rule broadens the scope of the Packers and Stockyards Act (PSA) of 

I 921 related to the use of "unfair, discriminatory or deceptive practices" and 

USDA in 2010 proposed a number ofPSA provisions collectively known as the GIPSA 

Rule- which mandated in the 2008 Fann Bill. But the agency was blocked by 

provision that would eliminate the need to prove a competitive injury to win a PSA 

lawsuit Protecting competition is the heart of the PSA. In fact, lederal appeals 

of the PSA. 

The Interim Final Rule would eliminate the need to prove injury to competition, which 

would prompt an explosion in PSA lawsuits by tuming nearly every contract dispute into 

a tcderal case subject to triple damages. 

The inevitable costs associated with increased lawsuits and the legal 

would create likely would lead to further vertical integration of the pork and 

drive packers to own more of their own hogs reducing competition for producers of all 

sizes, stifling innovation and providing no benefits to anyone other than trial lawyers and 

activist groups that will use the mle to attack the livestock industry. 

Infonna Economics study found the GIPSA Rule, the Interim Final ,Rule, 

now would cost the pork industry more than S420 million annually, with most ofthe 

costs related to PSA lawsuits brought under the "no competitive provision.) 

more of them in the fonn of the Interim Final Rule of the Farmer Fair Practices Rules. 

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NPPC urges Congress to work with the administration to rescind the Interim Final 

Rule and to ensure that any USDA mle to amend the Packers and Stockyards Act not 

restrict producers' ability to sell or 

ability to usc tcclmologics and pricing and m."1·h•tin 

mutual benefit. 

Likewise, federal mandates on production 

animals and not limit their 

mechanisms that work for their 

including ones that would dictate 

animal housing systems, would add to producers' costs and weaken the U.S. pork 

industry's competitiveness vis-a-vis competitors. 

Nearly three decades ago, the U.S. industry developed and !11flleJnente:d strict 

standards for animal care and judicious use guidelines tor use of animal drugs. These 

standards and guidelines are part of the industry's Pork Quality Assurance Plus and 

Transpmi Quality Assurance programs, which producers and handlers to be 

trained and certified in caring for and transpmiing animals. 

Pork producers do not support animal care and handling provisions in 

the Farm Bill a piece oflegis!ation that has been aimed for more than 80 years at 

maintaining the competitiveness of the U.S. and livestock sectors. 

USDA Export Programs 

foreign markets for U.S. pork products increases producers' bottom line and 

contributes significantly to the U.S. economy, fostering job growth and increasing the 

U.S. gross domestic product. Pork represents 37 percent of global meat protein intake, 

more than beef and poultry, and world pork trade has grown significantly over the past 

decade or so. The extent of the increase in global pork trade in the future will hinge 

heavily on continued efforts to increase trade liberalization. 

The U.S. industry in 2016 exported $6 billion which supported 

more than 50,000 jobs. lt is estimated that U.S. pork prices were $50.20 per hog higher 

last year than they would have been in the absence of exports. 

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It is important to strengthen the ability of U.S. to compete in the global 

m<lrk,etplac:e. But the downside exports is, of course, the larger economic 

impact on producers and the U.S. economy should there be any dismption in trade. Pork 

producers understand this dynamic and that it would be devastating for the U.S 

pork sector. 

While the best way to increase U.S. exports is tlu·ough free trade agreements that 

eliminate all taritTand non-tariffbaniers on pork, programs nm by USDA's 

Agricultural Service and authorized under the Farm Bill also are important to U.S. 

agricultural exports. 

The Market Access (MAP) uses funds fi'om the Credit Corporation 

to help producers, exporters, private and other trade finance 

promotional activities for agricultural products of the United States. The Forcigu Market 

Development Program, also known as the Cooperator helps create, expand and 

maintain long-term export markets for U.S. agricultural products. 

NPPC supports funding levels that will sustain those important programs. 

Protecting the environment is a top ptiority of the U.S. pork industry. Pork producers are 

meeting or exceeding environmental standards. Pork producers have fought hard tor 

science-based, affordable and effective regulatory policies that meet the goals oftoday's 

environmental standards. To meet strict environmental criteria vvhile maintaining 

production, they support the federal govemment providing through conservation 

programs within the Fann Bill cost-share support to help some of the costs of 

compliance. 

For many fanners, USDA conservation financial assistance funds through the 

Environmental Quality Incentives (EQJP), the Conservation Stewardship 

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Program (CSP) and the Conservation Reserve (CRP) are integral to making 

investments in environmental protection practices and technologies possible. Certainly 

there will be advances made by many farmers without federal tunding assistance, but 

conservation financial assistance is critical for many, and it will help build a foundation 

oralcttces that can sustain conservation improvements for the long term. 

Under the EQIP program, however, pork producers have not received support to 

meet all the challenges they face related to conservation and the environment. Producers 

who use EQIP would like to see the scope of projects covered the program widened. 

NPPC wants in the next Farm Bill maintained for EQJP and the other critical 

working lands conservation programs, and on CRP, it supports the current limit on 

acreage that may be enrolled in the program. 

Conclusion 

The U.S. pork industry is the lowest-cost nrrH1n.r~er and No. l exporter of pork in the 

world, and U.S. pork producers continue to produce the most abundant, safest, most 

years, weathering financial crises and diseases as well as the vagaries of a supposedly 

free-market economy pushed and pulled in various directions by government intervention 

and regulation. All the while, they have invested in and adopted new technologies that 

have promoted animal health, protected the environment and added thousands of jobs and 

billions in national income to the American economy. 

For America's pork producers to continue as leaders in the intemational and domestic 

economies, for them to take of the opportunities and meet the challenges 

presented to them, Congress and the administration, through the next Farm Bill, should 

pursue policies and regulations that support the U.S. pork industry rather than hinder its 

ability to continue producing safe, lean and nutritious pork and pork products for the 

global marketplace. 

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City of Dodge City 

806 N, Second Ave. 

P.O. Box R80 

Dodge City, KS 67801 

Testimony to the 

Phone: 620-225-8! 00 

FAX: 620-225-8144 

W\VW .dod.gecity .org 

United States Senate Committee on Agriculture, Nutrition, and Forestry 

Mrs. Cherise Tieben, City Manager, Dodge City, Kansas 

February 23, 2017 

Manhattan, Kansas 

Mr. Chairman and members of the Committee, welcome to Kansas. I am Cherise Tie ben, City Manager 

of Dodge City, Kansas, the proud home community of Senator Pat Roberts. Thank you for allowing my 

testimony about a rural housing challenge with a positive outcome. 

In 2008, Dodge City community leaders recognized, the lack of quality affordable housing and the 

resulting impediment to recruiting, retaining and expanding the local workforce. At the time, the local 

housing supply was limited, including an inadequate stock of affordable and moderate housing available 

for purchase by first-time homebuyers. In the preceding five years, only 64 newly constructed 

residential homes had been built. 

Local stakeholders saw the need for a housing assessment which was subsequently commenced to 

evaluate the existing housing stock and quantify the long-range housing demand for our community. 

There were many inputs to the study including, evaluation of current federal, state and local 

government policies and incentives. The results of the housing study were beneficial and identified 

several obstacles while also projecting a need to build 568 single family homes and 379 multi-family 

homes, in varying price ranges in the following 5 years. 

The housing assessment highlighted the serious lack of inventory of starter homes for first-time 

homebuyers. And, banking regulations were tightening, making it more difficult for first-time home 

buyers to qualify for a conventional residential home loan. Young families and people moving into the 

community needing to utilize USDA RD loans to purchase affordable to moderate market range homes 

were encouraged to buy or build outside of Dodge City due to the population restrictions of the loan 

program. 

The City of Dodge City and three other southwest Kansas communities brought to the attention of 

Senator Roberts, the stifling impact of the USDA RD loans population limit. Senator Roberts saw the 

need for an upward adjustment to the population limit and led the effort for a change, which became 

effective in May, 2014. The impact is measurable 94 USDA guaranteed loans, totalying $9.9 million 

dollars have been underwritten. The other southwest Kansas communities also share a similar success. 

The positive results allow the retention of existing businesses, the ability of existing businesses to grow 

and improves opportunities to recruit new business to our community. 

Again, Senator Roberts thank you for being our champion on this and so many other issues. Thank you 

for the opportunity to testify today. I am pleased to answer any questions. 
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Testimony of Kent Winter 

Before the U.S. Senate Committee on Agriculture, Nutrition & Forestry 

Manhattan, Kansas 

February 23, 2017 

Chairman Roberts, Ranking Member Stabenow and members of the Committee, I would like to thank 

you on behalf of Kansas grain sorghum farmers for the opportunity to share our views on discussions 

surrounding the upcoming farm bill. 

I farm near Andale in south central Kansas, producing grain sorghum, wheat, soybeans, corn and alfalfa, 

and I currently serve as president of the Kansas Grain Sorghum Producers Association. 

Kansas is the nation's leading producer of grain sorghum. Last year we produced 55 percent of the 

nation's grain sorghum crop, above our normal production rate between 40 and 50 percent of the U.S. 

grain sorghum crop. Sorghum is used as a feedstock for ethanol, for livestock feed and is exported to 

other countries. There is also a growing market for sorghum as a consumer food choice and in the 

distilled spirits industry. Grain sorghum has great rotational benefits for many Kansas farmers because it 

will often grow in challenging conditions, especially where water supplies are short. 

Times are tough on the farm. Prices for most commodities have collapsed the last year, and lenders and 

farmers are very worried about producers staying in business. This means farm programs are critical in 

our day-to-day business decisions in Kansas. When producers apply for a farm operating loan, the 

banker asks two questions; What are your crop insurance guarantee levels, and what do you anticipate 

in other farm program safety net support? The ability to secure annual operating loans directly depends 

upon the stability of farm programs. Strong farm programs provide certainty and stability that is vital for 

growers to be able to obtain operating capital from their banks. That operating capital is what bolsters 

local rural economies. 

We appreciate your leadership in maintaining and strengthening farm programs. The current Price Loss 

Coverage program is working for sorghum. In the first year of this farm program, strong cash sales from 

export demand held our prices above the reference price level set for sorghum in the last farm bill. 
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However, as prices dropped significantly in the last year, needed support has kicked in for sorghum 

farmers, and it is a simple program to understand. Agriculture Risk Coverage (ARC) has been very 

confusing and somewhat frustrating for some of our membership because it is hard for growers to 

understand why one county gets payments and the adjacent county does not. Therefore, having a 

robust risk management system in place is vitally important to my farm, and that includes a PLC program 

that today fills the gap between the level of risk management coverage I need compared to the level of 

coverage I can get through crop insurance today. 

Mr. Chairman, in regards to the conservation of our natural resources, sorghum is not only the 

nation's premier water saving grain crop, but it also offers valuable conservation characteristics such as 

drought and heat tolerance, high residue stubble, expansive root systems, carbon sequestering capacity, 

and wildlife habitat and food. Sorghum is drought tolerant and well suited for arid conditions and is 

especially important in areas that draw water from the Ogallala Aquifer to support agriculture. As the 

Ogallala has struggled to maintain adequate levels and recharge, sorghum's ability to produce grain with 

significantly lower water requirements is critical for the long-term existence of the Ogallala. Sorghum is 

a proven water-sipping crop and will be a solution, I think, many farmers will embrace. 

As sorghum producers finalize our priorities for the conservation title, we want to ensure that the title 

works better for dryland farmers in the western plains. Whether that is water conservation practices in 

EQIP or resource-conserving crop rotation practices in CSP, we want the conservation title to work for all 

producers in all regions of the country. Sorghum producers support a variety of conservation programs 

and believe working lands conservation programs are vital to increasing productivity while also 

protecting our natural resources. 

In Kansas, sorghum is used mainly for ethanol production and livestock feed. While most think of 

ethanol as a product made from corn, most Kansas ethanol plants use both feed grains to produce this 

renewable fueL Having both grain sorghum and corn available allows ethanol plants more flexibility and 

better pricing opportunities. This ensures a strong and viable ethanol industry in our state, and also 

ensures a good value-added market for sorghum producers. 
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Finally, trade by way of exports remains vital for our industry. Therefore, we support increased funding 

for Market Access Program and Foreign Market Development programs in this farm bill as well as even 

better trade agreements around the world. 

While I have focused on the use of grain sorghum for ethanol, I would like to mention the potential for 

the use of sweet sorghum and high biomass sorghum. As technology continues to advance in this area, 

discussions continue with major energy companies on the use of different types of sorghum as 

feedstocks, so maintaining energy title programs that continue to create opportunities and reduce risks 

for producers is important. 

One last item that I would like to address is research. Unfortunately our industry is being plagued by a 

new insect called the sugarcane aphid, which has created significant financial and management 

challenges for our farmers. Research remains the answer for a long-term solution to this growing 

challenge, and we need help to deal with it and the damage it is causing. 

In closing, I would like to underline the importance of stable and viable farm programs, especially to 

smaller crops like grain sorghum. Sorghum provides many benefits to conservation and crop rotations 

for our growers. Sorghum also plays an important role in a dependable feedgrain supply for our ethanol 

and livestock producers. However, as a crop that is planted to make the most of difficult growing 

conditions, it is also uniquely exposed to risk. Well thought-out farm programs that address risks and the 

potential of grain sorghum will benefit our growers as well as our local, state and national economies. 
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Testimony of Ken Wood 

before the Senate Committee on Agriculture, Nutrition and Forestry 

2018 Farm Bill Field Hearing in Manhattan, Kansas 

February 23, 2017 

Mr. Chairman, Ranking Member Stabenow, and Members of the Committee, thank you for 

the opportunity to address you today. My name is Ken Wood, and I farm about 2,500 acres 

here in central Kansas, just outside of Chapman, Kansas. I produce wheat, corn, soybeans 

and grain sorghum. l serve as President of the Kansas Association of Wheat Growers, and 

am honored to have the opportunity to submit comments regarding the future of our 

country's farm policy. 

Wheat is an important crop for Kansas. On average, Kansas plants 9.2 million acres of 

wheatl. For reference, that is 2,000 square miles larger than the state of Maryland.2 ln 2016 

over 15 percent of all the land area in Kansas was covered with wheat3• In the fall of 2015, 

farmers planted eight and a half million acres of wheat and that 2016 crop yielded a record 

57 bushels per acre, up 20 bushels per acre from the previous year.4 This resulted in 

Kansas wheat production of 467 million bushels, about 1.5 times as much as 2015 harvest, 

and nearly double the 2014 harvest.5 

With these record yields, came stockpiles and bunkers of wheat on the ground. As of 

December 1, 2016, wheat stored in all positions totaled 420 million bushels, up 29 percent 

from a year ago and a record high. 6 ln fall 2016 Kansas farmers planted almost 1 million 

fewer acres of wheat than the previous year, just under seven and a half million acres.7 This 

represents the second lowest planted wheat acres in Kansas in over a century8. Many feel 

that low prices and a struggling farm economy have resulted in lower planted wheat acres. 

Although we were blessed with a bountiful harvest in 2016, 2017 is shaping up to be a 

tough year for Kansas wheat farmers. Farm income levels are at their lowest point since 

1985. Between 2014 and 2015, net farm income dropped 95%, and net farm debt levels 

have increased 25% over the last three years9• 

1 http:/ /kswheat.com/producers/10-year-average-kansas-wheat-production 2 

https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_OO_SF1_GCTPH1.US01PR 

&prodType=table 

'!d. 

4 https :/ /www .nass. usda .gov /Statistics_ by_ State/Kansas/Pu blications/Crops/whthist.pdf 5 /d. 

6 http:/ /usda.mannlib.cornell.edu/usda/nass/GraiStoc/ /2010s/2017/GraiStoc-01-12-2017. txt 7

https://www.nass.usda.gov/Statistics_by_State/Kansas/Publications/Crops/whthist.pdf 

8 1d 

9 http://www.agmanager.info/kfma/state-summaries 
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According to USDA, farming is still overwhelmingly comprised of family owned businesses. 

99% of U.S. farms are family farms, and they account for 89% of farm production. 10 Low 

prices, coupled with rising costs, are placing even more stress on the Kansas wheat farmer, 

forcing them to cut costs and find efficiencies in order to be profitable. This situation 

highlights the need for federal programs like crop insurance and illustrates the vital 

importance of a farm safety net. 

Crop insurance, for me, is the most important segment of the "Farm Safety Net." When a 

natural disaster looms on the horizon, whether it is a drought, flood, hail storm, or in my 

case, a tornado, we know that crop insurance will help keep us in business. 

On May 25,2016, at about 8:00p.m., my farm, home, vehicles, most of my machinery, and 

approximately 300 acres of my crops were totally destroyed by an EF 4 tornado. The 

availability of crop insurance was not the deciding factor, but certainly a contributing 

factor in my decision to rebuild and re-establish my business. l honestly don't think that I 

would have had the courage to start over without having the protection that crop insurance 

offers. I had buildings and machinery to invest in, and l certainly made sure that they were 

insured. Similarly, I had ongoing investments to make in seed, fertilizer, and crop 

protection products. I really didn't want to leave that investment uninsured. For most of us, 

crop insurance will not guarantee a "good year," but it offers the promise of "another year." 

I am old enough to remember vividly the circumstances that the ag community lived 

through during the decade of the 1980's. I believe that if we would have had crop insurance 

available then, like it is now, the 1980's wouldn't have been nearly as devastating. We had a 

glut of grain, which drove down prices. Then we had 4 years of drought, which eventually 

helped the price situation, but in the meantime, we had little to sell at very low prices. 

While l think that having a stronger safety net back then wouldn't have solved the problem, 

l have to think that it would have softened the blow. 

Despite passage of a five year Farm Bill, some in Congress continue to come after Title 1 

farm programs and the federal crop insurance program. Some say that we are giving 

handouts to farmers and that farm programs cost us too much money. However, 72% of all 

farms received no farm-related Government payments in 201511 and all together, 

agriculture spending makes up less than three tenths of one percent of overall federal 

spending. 

A budget exercise in the fall of2015 showed how crop insurance is continually under 

attack. It was only after heavy push back from the ag community and our champions on the 

Hill when Congressional leadership agreed to reverse the cuts as part of a highway bill a 

couple of weeks later. We are always on notice that when Appropriations bills reach the 

floors of the House or Senate, it's very possible that we'll see anti-crop insurance 

10 https:/ /www ,ers. usda ,gov /webdocs/publications/ eib 164/ eib-164.pdf 11 https:/ /www. ers. usda .gov /webdocs/ publications/ eib 164/ eib-164.pdf 
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amendments being offered. In the past, efforts to cut crop insurance have come after the 

federal share of premium support, either through hard caps or through establishing AGI 

limitations on eligibility. Such caps would limit participation and make crop insurance 

more expensive for all producers. As was evident in my story, crop insurance is vital to 

protecting farmers and is a resource to keep us farming. Without it, we would be vastly 

limited in who is able to afford to farm. 

In addition to disaster insurance, Agriculture Risk Coverage (ARC) and Price Loss Coverage 

(PLC) programs provide key support for farmers. The 2014 Farm Bill allowed producers a 

choice between revenue protection and price protection, programs which replaced the 

former direct payment program. One improvement to the current programs that we would 

like to see in the future would be to increase the reliability of the data coHected. This has 

been specifically impactful in the administration of the ARC-County program. The ARC 

guarantee is based on county yields that use NASS data; however, many don't trust the 

accuracy of NASS data, particularly since returning surveys isn't specifically required, and 

the accuracy of the data isn't necessarily verified. Additionally, if NASS doesn't receive 

sufficient responses for a particular county, USDA has a cascade of other sources in place 

for determining county yield, which includes RMA and regional data. This process has led 

to situations with significant differences in payment rates between neighboring counties. 

The last Farm Bill was written at a time when economic conditions were much different 

than what farmers are currently facing. Wheat prices have dropped below loan rates, which 

has only happened a couple of times in the last two decades. The low prices triggered the 

availability of Marketing Assistance Loans (MALs) and Loan Deficiency Payments (LOPs). 

These programs are critical to helping producers with short-term cash-flow needs. The fact 

that they were triggered at all is an indicator of the bad economic conditions in rural 

America. 

The financial situation in the agricultural economy has changed considerably over the last 

two years, and we are in the beginning of what is going to be a tough stretch for Kansas 

agriculture. As I stated earlier, farm income levels are at their lowest point since 1985. Net 

farm income dropped 95% from 2014 to 2015, and net farm debt levels have increased 

25% over the last 3 years. 12 This downturn has largely been caused by low commodity 

prices, which are due to record highs in both local and worldwide production over the past 

two years. 13 These production levels have increased supply, while overall demand has 

waned, due to a strong U.S. dollar and decreasing exports.l 4 ln short, we have a lot of 

product and nowhere to go with it. Another major factor is that while revenues have only 

gone down, the cost of production and expenses have gone up. From 2009 to 2015 the cost 

of production has increased almost 50%.15 

http:/ /www.agmanager.info/kfma/state-summaries 

https://www.wsj.com/articles/whats-behind-the-glut-in-agricultural-commodities-1476670020 

https:/ /www.wsj.com/articles/the-next-american-farm-bust-is-upon-us-1486572488 

http://www.agmanager.info/kfma/state-summaries/2015-state-summary-detailed-cost-summary 
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As the situation continues to deteriorate in rural America, it is small and beginning farmers 

that are going to be affected the most. Small and beginning farmers are the most vulnerable 

to changes in the marketplace, because they do not have the ability to absorb losses or 

tough conditions like some of the more established producers do. The USDA estimates that 

small farms make up 90% of the farm count and operate nearly half of America's 

farmland.l6 If conditions continue to worsen, we could see a lot of those farmers going out 

of business. 

One way to help turn the agricultural economic situation around would be to help create 

demand for wheat products. This could be done by increasing food aid and supporting 

international trade. 

Food aid has long been a point of pride for American farmers as we continue the more than 

60-year tradition of Food for Peace. Lest we forget, the McGovern-Dole program was 

cofounded by one of Kansas' native sons. Last year we received reports from a trip to the 

Middle East and Africa examining the use of U.S. food aid. Members of that trip reviewed a 

dam project in Jordan being funded by the sale of donated U.S. wheat. We also heard about 

efforts being made about 130 miles from the Somalian border, in eastern Ethiopia, where 

U.S. wheat is being donated in response to the 50-year drought gripping the eastern part of 

the nation. It is programs like these that help farmers, through their bountiful harvests, to 

feed the world. 

Last year the United States sent a total of 592,000 metric tons (21.8 million bushels) of 

Hard Red Winter wheat in food aid, which accounted for almost 10% of all Hard Red 

Winter wheat exports. Additionally, the only markets that purchased more Hard Red 

Winter wheat than the total of food aid donations were Nigeria, Japan, and Mexico. 

Perhaps the easiest and most effective way to increase commodity prices and improve the 

rural economy is to increase trade. Wheat is one of the most heavily exported crops grown 

in America and is the 7th most valuable crop in terms of export value17. Kansas ranks as the 

8th largest state in terms of exports of agricultural products.18 In 2015, Kansas wheat 

exports alone were valued at over 800 million dollars.19 When considering all export 

production in the state of Kansas, wheat is the znd largest export, falling behind only 

aircrafts in terms ofvalue.zo 

Because of our heavy dependence on exports the Kansas Association of Wheat Growers has 

been a major supporter of international trade deals such at NAFTA, CAFTA, and TPP. 

Although we were disappointed with how things ended with TPP, we would encourage 

Members of the Committee to help spread the message about how vital international trade 

https://www.ers.usda.gov/webdocs/publications/eib164/eib-164.pdf 

https://www.ers.usda.gov/data-products/state-export-data/ 18 /d. 

19 /d. 

https:/ /www.census.gov/foreign-trade/statistics/state/data/ks.html 
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is to the agricultural industry. On average, half of the wheat grown in Kansas is exported, 

and without trade, the Kansas farmer will continue to struggle. 

For wheat, Mexico is a particularly important market. It was once a country that 

high tariffs on wheat. NAFTA instead created a duty-free wheat trade which moved Mexico 

into a top 5 export market for U.S. wheat. It is the largest consistent market and the largest 

total market over the past couple years. Kansas farmers certainly want to see good 

relationships maintained with our Mexican trading partners and obviously want to do no 

harm to wheat market access. If the U.S. decided to leave NAFTA or extract painful 

concessions, it is likely that Mexico will target the most sensitive sectors, and agriculture in 

particular. Mexico has alternatives when it comes to wheat. In 2010 the U.S. had over 80% 

of the wheat market there; last year it was only 55%. Russia, Ukraine, and EU in particular 

have all increased their market share. 

We would also urge you to support ending the trade embargo with Cuba, or at the very 

least, support legislation in the House and Senate that would ease financing restrictions on 

the purchase of American agricultural products. Cuba's 11 million people consume close to 

one million metric tons (36.7 million bushels) of wheat each year. It is the largest wheat 

market in the Caribbean, but it currently purchases almost all of that wheat from the 

European Union and Canada. Cuba could import at least 500,000 metric tons (18.35 million 

bushels) of wheat from the United States each year but has not purchased U.S. wheat since 

2011. Under the current embargo, the United States can export agricultural products to 

Cuba through the use of third-party banking institutions, which makes facilitating trade 

burdensome and often more expensive. 

Finally, once we do have trade deals, we need to make sure we are taking action to enforce 

them. The National Association of Wheat Growers and U.S. Wheat Associates recently rolled 

out a study conducted by Iowa State University economist Dr. Dermot Hayes showing that 

the support system used by China has led to U.S. wheat farmers losing out on over $650 

million in lost revenue in one year. A study by DTB Associates last year demonstrated that 

China has been heavily exceeding the trade commitments it agreed to when it acceded to 

the WTO. Particularly given the low commodity prices farmers are receiving, there has 

been more and more attention paid to the fact that U.S. farmers aren't on a level playing 

field because of the subsidies employed by other countries. 

As you know, nobody understands the need for good stewardship and conservation better 

than Kansas wheat farmers. This is what we do every day. We depend on clean water and 

healthy soils to make a living and feed the world. However, wheat farmers also need 

regulatory certainty so they know how to stay in compliance with the law. Costs of 

compliance have grown increasingly cumbersome over the last few years. Rules such as the 

EPA's Waters of the United States rule, duplicative environmental regulations, and illadvised additions to the endangered species act, have made farming and ranching more 

difficult and more expensive for Kansans. I believe that reducing these burdens, and 

streamlining them into a reasonable, affordable, and manageable regulatory structure will 

help our bottom lines and keep farming profitable. 
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The agricultural economy is at a crossroads right now, with depressed prices, increased 

costs and many additional challenges. It is our duty, as stewards of the land, to leave the 

soil and environment in better shape for our next generation than it was when we received 

it. Along that same line, a strong safety net provides for the future of food production in the 

United States. We ask that you make decisions that will allow us the ability to sustain our 

livelihoods and provide for future generations of farmers. When a natural disaster looms 

on the horizon, whether it is a drought, flood, hail storm, or in my case, a tornado, we know 

that we have a safety net to help keep us in business. 

I would like to thank you for coming to our state to hold this farm bill field hearing. Field 

hearings show your commitment to hearing firsthand from farmers and ranchers about the 

effects of farm legislation on individuals across the country. It has been an honor to submit 

testimony and speak on behalf of wheat producers. !look forward to any questions you 

may have. 
(177) 

DOCUMENTS SUBMITTED FOR THE RECORD 

FEBRUARY 23, 2017 

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1320 Resenrch Park Driw 

~L:mhottan, Kansas 66502 

Jackie '\kC!askeY, Sen-elan' 

900 SW JacksorL Room ,156 

Topeka, Kansas 66612 

296-3556 

Gun•rnor Smn Brown back 

Addendum to Written Statement by Secretary McClaskey 

Kansas Agricultural Growth 

:Federal Policies and Programs Limiting Growth in /\gricnlture 

February 23, 21117 

Farmers. ranchers and agribusinesses must baJance a h:nglhy list of challenges and variables, many of which they cannot 

control, as they \Vork to grow and raise food for families across the globe. Kansas needs to be poised to work 

collaboratively to help cratl quality legislation aimed at serving our fam1ers and ranchers in the next Farm Bill and other 

federal policy initiatives. 

While challenges exist, the opportunity for gro\\ih and the willingness of the agriculture industry to work together to 

address these challenges is far greater. Following arc issues related to federal policy and programs identified by industry 

stakeholders that limit growth potential of the agricultural industry. \Vorking together, these challenges can be overcome. 

Domestic and luternationall\llarkets 

Access to intemational markets lOr agricultural products is key to growing the agriculture industry. Resistance to 

free trade agreements at the federal level can hinder this access. 

Regulatory approval of new seed technology around the world is important as Kansas fanners look to take 

advantage of the latest advancements to improve yield and meet world\vidc demand. A reliance on non-sciencebased standards in some trade partner nations disrupts the ability of U.S. fanners to access critical intemational 

markets. 

The U.S. dairy indusUy is becoming increasingly affected by international dairy markets. A cunent surplus of 

milk supply worldwide has greatly suppressed domestic milk prices. \Vhilc the U.S. must become more 

competitive on the \vorld market. risk management strategies are needed to help protect the U.S. dairy industry 

from major price swings. The U.S. must also counter protectionist milk policies, such as a potential U.S. milk 

protein concentrate ban from Canada, poor dairy-specific Trans-Pacific Partnership negotiations, or Russian bans 

on dairy and agricultural products. 

It can be challenging to get U.S. Department of Agriculture meat inspectors to mral meat processing opemtions 

on a schedule that matches the needs of all patties. Only those facilities inspected by USDA are allowed to sell 

meat outside of the state borders even though state~inspected facilities must meet the same requirements for food 

safety. 

Consumer Awareness 

Ever-increasing ft1od safety expectations from the public and the govcmment result in a growing regulatory 

burden on food processing businesses to implement processes. upgrade equipment, sample product, document 

activities and hire additional employees to complete all of this Vi'Ork 
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The U.S. has an antiquated view of poultry meal and poultry by-products as the only country in the world with 

split definitions. Other species don't have split definitions. 

USDA Animal and Plant Health Inspection Service is c.urrcntly working on a hiotech policy which may include 

double haploids as biotech versus traditional breeding. This type of process regulation is ineffective and unjust. 

Attention should be paid to the end product and whether genetic modification has actually occurred or not. 

Recent increase in demand iDr gluten~ free products by consumers has the potential to decrease demand for wheat 

products at retail. Gluten-free has mm·cd beyond heaHh needs for a small percentage of the population into a 

dietary tad resulting in much misunderstanding about gluten, where it comes from and what advantages it brings 

to food. Standardized marketing claims for advertised characteristics such as gluten-ffee, natural, organic, locaL 

etc. could help consumers better understand the products they are buying. 

Workforce Development 

The temporary and seasonal guest worker programs do not work fbr many sectors of agriculture, such as the 

livestock and dairy industrit:'s, which require year-round labor. 

A lack of adequate housing in rural areas compounds the issue of a shortage of agricultural workers. The 

opportunity exists to engage \vith USDA Rural Development and local-level contacts to identify solutions to 

housing needs in rural communities. 

Critical lnfrastructurc and Transportation 

Having the transportation infrastrUcture necessary to move agricultural commodities and. products is criticaL Ports 

such as the Port of Catoosa in Oklahoma where Kansas products are loaded on barges need to be maintained such 

that shipping capacity isn't delayed or reduced due to aging infl·astructure. 

The beef industry relics solely on trucks and the highway system to transport live animals and beef products. 

Federal regulations can make it challenging to transport !1ve animals or beef products in a manner that is safe for 

drivers and animals alike. 

Federal agricultural exemptions, such as hours of service for livestock haulers, are based on temporary 

exemptions, creating long~tcnn uncettainty for the industry. 

Access to Capital and Taxation 

Maintaining the flexibility farmers have in how they depreciate capital purchases as it relates to federal income 

taxes is critical fOr management and planning. Any changes that reduce that flexibility, or threaten to reduce it. 

compromise fanners' ability to plan for expenses. 

Farm families \Vork their whole lives to build and maintain the family fanning operation including the acquisition 

of land. Being forced to sell hard-eamed assets to satisfy estate taxes is a devastating blmv to Hrmi!y farmers, 

part1cular1y beginning fmmt.~rs. 

Anima! Health and Welfare 

Antibiotics are an impmiant tool to prevent, treat and control disease in animals. Despite efforts to ensure that 

animal antibiotics do not anect public health, there are some lawmakers \Yho continue to call tOr increased 

scrutiny and regulation on the usc of antihlotics in tOod-producing animals. 

The lack of traceability system inhibits expmt growth potential and could potentially create animal health threats. 

In the past, some federal laboratories have been managed in a manner that docs not fully integrate with the 

regional economy or capitalize fully on the potential to pminer with private industry, especially small- and 

medium-sized enterprises, on research initiatives. It will be critical to work alongside the Department of 
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Homeland Security and USDA in the deYclopmcnt of strong partnerships with state govemment, private industry 

and universities to maximize potential of the: National Blo and Agro~DefCnse facility (NBAF). 

Accord1ng to the World Health Organization, about 75 percent of emerging diseases are zoonotic. CuiTently, there 

is not a laboratory in the United States that can research and work on zoonotic diseases, and also develop vaccines 

and cmmtetmcasures to those zoonotic diseases, which affect livestock. 

Since the last horse slaughter facility was closed in the United States, the market for horses has crashed along 

\Vith an explosion of unwanted horses that cannot be disp<:~sed of in any other manner. This also creates animal 

welfare issues for those unwanted. o1J and negle-cted animals. Federal appropriations arc encouraged for horse 

slaughter facilities. 

:-.latural Resources 

Buming the Flint Hills is a critical range management tool to improve prairie grass production and prevent 

intrusion fi·om weeds and woody plants. Despite the Flint Hills Smoke Management Plan, there is concem that the 

federal government may propose regulations that may result in challenges to the ability of Flint Hills ranchers to 

burn rangeland. 

Threatened and endangered species reduce the pace or viability of new projects and ~.::xpansions. An example of 

this includes the lesser prailie chicken~ which until late 2015 was listed as a threatened species under the 

Endangered Species Act \Vhilc a court order vacated the listing of the chicken, the rcnc'\ved revlc\v of the listing 

criteria by the U.S. Fish and Wildlife Service has the potential to delay or stop construction of new and expanding 

agriculture operations. 

Allowing limited haying, grazing and vegetative management on acres enrolled in federal cost share conservation 

programs would likely incn:asc landowner interest and participation in these programs without compromising the 

natural resources benefits of the practices. In addition, some requirements of the cost-share programs 

disincentivize participation from grovvers of alternative crops such as sorghum. 

Federal Policy and Regulations 

Though not unique to Kansas, there exist significant challenges due to federal laws and regulations~ including: 

food labeling, dietary requirements, \Vaters of the U.S., the Endangered Species Act, burdensome Occupational 

Safety and Health Administration regulations and more. 

Cotton is not a covered commodity under the Farm Bill so it lacks the Price Loss Protection or Agricultural Risk 

Coverage afforded to other commodities such as corn, soybeans and wheat. Cotton growers have to rely on 

insurance products (Stacked Income Protection [STAX] Program) in the absence of other Fann Bill support 

mechanisms. While restoring cotton as a Title f commodity under the next Farm Bill is a more long-term 

resolution to this issue, designating eotlon in the '"other oilset:d" category offers an alternative for improved 

coverage under existing commodity programs. 

There exist significant challenges due to federal Jmvs and regulations that affect tcchnolof,ry1 including Federal 

Aviation Administration regulations lhat largely restrict Unmanned Aerial Vehicle usc. 

Renewable Fuel Standard is a regular unknown when ii comes to understanding the requirements for ethanol in 

U.S. gasoline. More tmnsparcncy and predictability would bring increased stability to the ethanol market. 
(181) 

QUESTIONS AND ANSWERS 

FEBRUARY 23, 2017 

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Senate Committee on Agriculture, Nutrition, & Forestry 

Hearing from the Heartland: Perspectives on the 2018 Fam1 Bill from Kansas 

February 2017 

Questions for the Record 

Mr. David Clawson 

Chairman Pat Roberts (R-KS) 

L Mr. Clawson, you mention the importance of USDA's conservation programs in your 

testimony. The 2014 Fann Bill significantly consolidated and streamlined the suite of 

conservation programs available to producers. Gearing up for the 2018 Farm Bill, what 

policy recommendations would livestock producers suggest Congress consider for the 

Conservation Reserve Program? 

First, l would caution against increasing the number of new acres that could be enrolled 

in traditional CRP. KLA believes the program should focus on the most sensitive areas instead of 

taking entire fields out of production. Further, KLA supports rules to allow periodic haying and 

grazing as an important management tool as part of an NRCS management plan. We also support 

the flexibility to utilize CRP acres in emergency situations. KLA encourages the committee to 

consider ways in which CRP acres can be made available more quickly in emergency situations. 

2. Mr. Clawson, f hear often that regulatory burdens are directly impacting fann operations 

both in Kansas and across the country. During these tough economic times, I'm sure these 

costs can be crippling. Can you elaborate or share with the C ommittcc the regulatory 

challenges impacting your farm's pro11tability? 

To begin, l would highlight the crippling effects of the G!PSA interim final mle on 

competitive injury. Implementation of that final rule would put an end to the value-based 
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marketing programs that reward cattle producers for their investment in genetics and 

management practices that lead to beef products that better meet conswner needs. 

The EPA Waters of the U.S. (WOTUS) rule is another example of a potentially 

devastating regulation. If implemented, WOTUS would represent an unprecedented expansion of 

federal authority over private property. Compliance costs arc diftlcult to determine, but certainly 

would add significantly to our cost of production. KLA strongly supports President Trump's 

action to withdraw this onerous rule. 

The EPA is a source of many regulations that increase costs for my business. Numerous 

rules have increased the cost of energy, increasing the cost of many inputs and transponation. 

Our fanning and ranching operations constantly strive to be more efficient, but producing food 

for people around the world is an energy-intensive effort. We need EPA to recognize the 

stewardship of land and water resources provided by farmers and ranchers. Far too often, EPA 

regulators have treated fanners and ranchers as the problem when it comes to protecting the 

environment. 

Trucking regulations often ignore the type of product being hauled. For the well-being of 

the animal, cattle need to arrive at their destination as soon as possible. Livestock producers need 

flexibility in the hours-of-service rules. Neither standing on the truck nor being off-loaded dming 

required rest periods is optimal for cattle health and well-being. Livestock producers need an 

exemption from hours-of-service rules to minimize the time in transit. 

The time value of complying with trucking regulations also is substantial. While there are 

some exemptions for private not-for-hire haulers, the remaining regulations still are costly and 

require significant time for compliance. Complying with the Unified CatTier Registration (UCR) 

and the Interstate Fuel Tax Agreement (IFT A) requirements can be confusing and costly for 
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private haulers. Most private haulers only cross state lines a few times a year but still must apply 

and pay the UCR fee and report the! use. While this is normal for motor carriers, many fanners 

and ranchers are not experienced in wading trucking regulations. 

Also, many pickup truck and trailer combinations crossing state lines are required to get a 

USDOT number and must pay the UCR fee and comply with 1FT A These vehicles are not 

semi-trucks and should not be treated like them. The weight threshold for these regulations needs 

to be increased to allow farmers and ranchers to operate their farm pickups as needed. 
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Senate Committee on Agriculture, Nutrition, & Forestry 

Hearing from the Heartland: Perspectives on the 2018 Farm Bill tl·om Kansas 

February 23, 2017 

Questions for the Record 

Ms. Amy France 

Cbainnan Pat Roberts (R-KS) 

I. Ms. France, you mention the importance of USDA's conservation programs in your testimony. The 20! 4 

Farm Bill significantly consolidated and streamlined the suite of conservation programs available to 

producers. Gearing up tor the 2018 Fann BilL what policy recommendations would you suggest Congress 

consider for the Conservation Reserve Program? 

Chairman Roberts, thank you again for the opportunity to provide input into the 2018 Farm Bill development 

process. In wcstem Kansas, where !live, the Conservation Reserve Program (CRP) represents a vital 

partnership connecting federal, state and farmer partners to protect sensitive land rrom degradation and improve 

environmental quality; and that is where the program should remain: protecting marginal and highly erodible 

lands (HEL). The CRP program has been extremely beneficial to producers, wildlife and the ecosystem 

throughout Kansas since its inception. In fact, Kansas (37,582 contracts on 21,966 farms totaling 2,074,491 

acres) and Texas (19.264 contracts on 13,967 limns totaling 2,909,92R acres) are the only two states with more 

than two million acres enrolled in CRP as of December 2016. Every program though, could use some 

improvement and CRP is no exception. My suggestions include: 

Allow for additional management practices on CRP land: As mentioned in my written testimony, Farm 

Bureau strongly supports working lands conservation programs. Any cm1rt to incorporate additional 

management practices as part of traditional or continuous CRP contract management and expansion of 

the CRP Grasslands Program would be a positive policy direction. As our fhends at the National 

Resources Conservation Service (NRCS) often say, "what's good for the herd, is good for the bird," 

meaning carelhl inclusion of grazing practices in established CRP lands are benet!cial to upland ground 

Amy France, Kanl\aS Fnrm Bur<,;au, Senate Ag Committee Field l-lc..·uing, QFR Response 3 
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birds such as the lesser prairie chicken (LPC). Studies show improved habitat following grazing events 

thanks to increased forb diversity and seasonal changes within forage mixes. Likewise. for those tarms 

where grazing is not easily employed, additional oppmtunities to incorporate haying into CRP contract 

management would be highly sought by Farm Bureau members. Over the cmrrse oft he past decade 

Kansas has experienced record drought. In ttying to assist fellow producers who \verc severely impacted 

by drought, and alier jumping through multiple hoops, it was determined in mnst cases producers who 

were required to actively "manage" the CRP acreage could not bale aud donate the bales to a drought 

stricken producer; rather, the bales taken from CRP acreage were required to be burned or destroyed. In 

limited cases, the bales could be donated but no reimbursement could be given to offset transportation, 

hauling or labor costs. Additionally, CP25 CRP acres in Kansas have not been allowed to be touched by 

hoof or swathcr; any assistance to allow at least grazing on CP25 acres would be much appreciated. 

Incorporating higher levels of management ofCRP lands, and allowing tor reasonable access to the 

growth ofCRP grass during times of severe weather events as part of the next Farm Bill not only 

provides greater environmental incentive to keep these acres in land to conserve grass and provide 

wildlife habitat but also assist in managing the fuel load that CRP acres might provide to wildfires. As 

evidenced both in 2016 and again this year in Kansas, wildfire is both dangerous and devastating to rural 

communities. Carefully managed haying and grazing ofCRP lands can play a key role in limiting the 

available fuel load as well as assist in the recovery ctlbrts of areas burned if allowed to be baled and 

transported to areas impacted by fire. 

Continue efforts to ensure CRP rental rates accurately mirror local rental rates: To best balance the 

desires to enroll sensitive lands, yet also ensure that acreage is accessible to young and beginning 

farmers, both CRP and Conservation Reserve Enhancement Program (CREP) rental rates should be 

examined annually at enrollment to ensure they accurately reJ1ect the rental rates of comparable land in 

the immediate area. 

Amy Fr:tm'e, Kansas Fann Bureau, SL>narc Ag Committee Field !-tearing, QFR Response 1'!4,'20!7 
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Maintain the current 24 million acre cap for CRP: As farmers, Clint and I strive to maintain, build and 

restore the soiL water and air so we can pass our furm on to the next generation in better shape than 

when we began farming it. We believe proper funding of working lands conservation programs such as 

the Environmental Quality Incentives Program (EQ!P) and the Conservation Stewardship Program 

(CSP) is the best way to achieve that goal. l know the CRP cap of24 million acres will be thoroughly 

debated in Congress and I cannot tell yon today if 24 million acres is the appropriate number or not. 

What I can tell you is as a fanner, USDA pro!,q·ams and dollars have a lot more bang for the buck within 

the crop insurance, Title l programs and even the EQIP and CSP programs of Title 2 than in increasing 

CRP payment rates or increasing the national CR P acreage cap. 

• Transitional payments on expiring CRP contracts: Over the coming years Kansas will experience the 

following CRP contract expirations: 

o 2017 137,464acrcs 

2018 106,413 acres 

2019 50,300 acres 

o 2020 = 503,4S3 acres 

o 2021 368,933 acres 

o 2022 298,148 acres 

2023 133,123 acres 

o 2024 476,627 acres 

With this amount of acreage expiring at some point over the course of the next Farm Bill. it is 

imperative some sort of workable transitionmeehanism be in place. Some of the expiring CRP acreage 

would be best suited to remain in grass and utilized l(,r grazing or haying purposes, some will end up 

being rctumcd to production agriculture. Yet some acreage should have the opportunity to reenroll in the 

CRP program to protect the sensitive nature of the soiL Farm Bureau looks :f(Jrward to working with 

policy makers on ways to successfully transition large contract expirations into :fhture programs and 

production practices that best suit the productivity of the soil and protect natural resources. 

Standardize management ofCRP across the contracts: A lot of the producer activity and management 

issues with CRP stems Jl-om a lack of standardization among the multiple General CRP practices. For 

Amy France, Kansas Fam1 Bnrerm. Senate Ag l'ommittL·~._· Field Hearing, QFR Response 3· 14 '20!7 
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example, CP25 is extremely restrictive while CP2, CP4 and CP l 0 are similar in the management 

practices allowed. When signing up for a CRP contract, the length ofthe underlying contract should not 

sway producers into agreeing to more restrictive land management activities. Standardization of 

management activities within all CRP contracts regardless ofthe practice chosen will help alleviate 

neighborly disputes (where one neighbor has grazing access to his CRP but the adjacent tract grazing is 

not allowed), help USDA service center employees better communicate the benefits of the program and 

ensure the most environmentally sensitive lands are placed in the program. The type of covers 

established (introduced grass. native grass, high fi.wb mix. etc.) would still differentiate the practices and 

allow Jbr a simplified ranking of applications. 

Greater emphasis on Continuous CRP: Enhanced payment rates provide incentives to pnt the most 

erosive, ecologically sensitive, or least productive land into grass, wetlands or timber. Doing so 

maximizes environmental benefits, provides the greatest return on investment, both by reducing 

payments associated with Title l programs and crop insurance on the lowest quality land. Furthermore, 

the highest quality and most productive lands continue to produce fbod, fiber, energy and forage, 

Again, it was an honor to testify on behalf of Kansas Farm Bureau and our more than 30,000 farm and ranch 

family members across Kansas as you plan for the next Farm BilL l appreciate the opponunity to provide more 

input regarding CRP and look forward to continuing the discussion. 

Amy Franc~'., Kansas Fann Bureau, St-•tmte Ag Committe(' l:'k!d Hearing, QFR Rt·sponsc 3il4 '20! 7 
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Senate Committee on Agriculture, Nutrition, & Forestry 

Hearing from the Heartland: Perspectives on the 2018 Farm Bill from Kansas 

February 23, 2017 

Questions for the Record 

Mr. Lucas Heinen 

Chairman Pat Roberts (R-KS) 

1. Mr. Heinen, you mention the importance of USDA's conservation programs in 

your testimony. The 2014 Farm Bill significantly consolidated and streamlined 

the suite of conservation programs available to producers. Gearing up for the 

2018 Farm Bill, what policy recommendations would soybean growers suggest 

Congress consider for the Conservation Reserve Program? 
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Senate Committee on Agriculture, Nutrition, & Forestry 

Hearing from the Heartland: Perspectives on the 2018 Farm Bill from Kansas 

February 23, 2017 

Questions for the Record 

Mr. Kent Moore 

Chairman Pat Roberts IR-KS) 

1. Mr. Moore, you mention the importance of USDA's conservation programs in your 

testimony. The 2014 Farm Bill significantly consolidated and streamlined the suite of 

conservation programs available to producers. Gearing up for the 2018 Farm Bill, what 

policy recommendations would corn growers suggest Congress consider for the 

Conservation Reserve Program? 

The Kansas Corn Growers Association {KCGA) recognizes the important role that USDA 

programs contribute to maintaining and improving stewardship of our land, air and water 

resources. 

The Conservation Reserve Program is a time-tested success story of the federal government 

and farmers and ranchers working together to improve soil health, water quality and wildlife 

enhancement. Kansas Corn supports the continuation of the CRP program in its current 

capacity as a tool that producers can utilize to address highly erodible acres. KCGA is currently 

working with other corn state associations and National Corn Growers Association to analyze 

current CRP policy and to consider more specific recommendations to improve the program. 

At this point, our policy on CRP is unchanged from the 2014 Farm Bill. 

In general, we support voluntary enrollment into the Conservation Reserve Program and 

renewal of contracts targeted to the most environmentally sensitive acres. We believe CRP 

rental rates should be adjusted to ensure that environmental or significant wildlife habitat 

sensitive land remain in the CRP program. We support voluntary enrollment under the 

continuous CRP provisions for wildlife habitat and food plot areas; filter strips and buffer strips; 

established waterways and turn rows, and other partial field enrollments impacting water 

quality. 
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Senate Committee on Agriculture, Nutrition, & Forestry 

Hearing from the Heartland: Perspectives on the 2018 Farm Bill from Kansas 

February 2017 

Questions for the Record 

Mr. Michael Springer 

Chairman Pat Roberts (R-KS) 

1. Mr. Springer, since 2013 pork producers have struggled as Porcine Epidemic Diarrhea Virus 

crept onto hog farms in 39 states. The disease had a devastating impact and roughly 10% 

of the swine herd perished at the peak of the outbreak. Looking back on that experience, 

can you describe specific measures or needs related to disease preparedness and 

prevention that will equip producers so they can be prepared to address emerging disease 

threats? 

Thankfully, our farm did not have to deal with PEDV, but we've had our share of other swine 

health challenges. For our farm, our first line of defense is our veterinarians. To keep them 

effective, they rely heavily on the federally-funded research performed at institutions such 

Kansas State University's College of Agriculture and Veterinary Medicine. These agricultural 

research projects have real-life application on our farm. 

As an example of this, our farm recently built a building designed to "bake" or dry our trucks 

and trailers before they are allowed to enter our farm. Hopefully, this drying process limits one 

avenue of bringing diseases onto our farm. The building cost about $200,000 to construct and 

it costs about $50 per load to operate. This was an expensive addition to our biosecurity 

measures, but I see it as another form of insurance for our farm. 
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Senate Committee on Agriculture, Nutrition, & Forestry 

Heming from the Heartland: Perspectives on the 2018 Fann Bill from Kansas 

23,2017 

Questions for the Record 

Mr. Ken Wood 

Chairman Pat Roberts (R~KS} 

l. Mr. Wood, you mention the importance ofUSDA's conservation programs in your 

testimony. The 2014 Fam1 Bill signiflicat1tl) consolidated and streamlined the suite of 

conservation programs available to producers. Geming up for the 201R Farm Bill, what 

policy recommendations would wheat growers suggest Congress consider for the 

Conservation Reserve Program? 

Response 

2. KA WG's policy is to support maintaining the current level ofCRP acres and the current 

CRP policy. As we look forward to the next fmm bill, KA WG docs not want CRP acres to 

be expanded and wonld want the current cap maintained. We would like to see a 

focus and emphasis on enrolling acres based on soils, specifically less productive 

land that may cunently be used in production. In the future, we would like to see the 

program allow for increased flexibility in management decisions by producers enrolled in 

the program. This will allow producers to make decisions in a time of need, such as 

following natural disasters, etc., and may also encourage more active producers to utilize 

CRP, in addition to the program's traditional usage by producers who arc taking a less 

engaged role in farming operations. 

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