Senate Hearing, 107TH Congress - Implementation of The Farm Security and Rural Investment Act of 2002
Senate Hearing, 107TH Congress - Implementation of The Farm Security and Rural Investment Act of 2002
Senate Hearing, 107TH Congress - Implementation of The Farm Security and Rural Investment Act of 2002
107932
HEARING
BEFORE THE
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
TOM HARKIN, Iowa, Chairman
PATRICK J. LEAHY, Vermont RICHARD G. LUGAR, Indiana
KENT CONRAD, North Dakota JESSE HELMS, North Carolina
THOMAS A. DASCHLE, South Dakota THAD COCHRAN, Mississippi
MAX BAUCUS, Montana MITCH MCCONNELL, Kentucky
BLANCHE L. LINCOLN, Arkansas PAT ROBERTS, Kansas
ZELL MILLER, Georgia PETER G. FITZGERALD, Illinois
DEBBIE A. STABENOW, Michigan CRAIG THOMAS, Wyoming
BEN NELSON, Nebraska WAYNE ALLARD, Colorado
MARK DAYTON, Minnesota TIM HUTCHINSON, Arkansas
PAUL DAVID WELLSTONE, Minnesota MICHEAL D. CRAPO, Idaho
(II)
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CONTENTS
Page
HEARING(S):
Implementation of the Farm Security and Rural Investment Act of 2002 ......... 01
WITNESSES
Veneman, Hon. Ann M., Secretary, United States Department of Agriculture,
accompanied by Dr. J.B. Penn, Under Secretary, Farm and Foreign
Agricultural Service, Dr. Keith Collins, Chief Economist and Bruce Knight,
Chief, Natural Resources and Conservation Service ......................................... 02
APPENDIX
PREPARED STATEMENTS:
Harkin, Hon. Tom ............................................................................................ 52
Crapo, Hon. Michael ......................................................................................... 58
Leahy, Hon. Patrick ......................................................................................... 53
Lincoln, Hon. Blanche ...................................................................................... 60
Stabenow, Hon. Debbie .................................................................................... 56
Veneman, Hon. Ann M. .................................................................................... 62
DOCUMENT(S) SUBMITTED FOR THE RECORD:
Baucus, Hon. Max ............................................................................................ 74
Request from Senator Harkin regarding information on how states define
a dairy operation ........................................................................................... 77
QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD:
Harkin, Hon. Tom ............................................................................................ 84
Lugar, Hon. Richard ......................................................................................... 89
Baucus, Hon. Max ............................................................................................ 109
Breaux, Hon. John and Hon. Mary L. Landrieu ............................................ 112
Cochran, Hon. Thad ......................................................................................... 113
Conrad, Hon. Kent ........................................................................................... 115
Crapo, Hon. Michael ......................................................................................... 118
Daschle, Hon. Tom ........................................................................................... 129
Fitzgerald, Hon. Peter ...................................................................................... 130
Leahy, Hon. Patrick ......................................................................................... 91
Lincoln, Hon. Blanche ...................................................................................... 133
Miller, Hon. Zell ................................................................................................ 136
(III)
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IV
Page
QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORDCONTINUED
Murray, Hon. Patty .......................................................................................... 138
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IMPLEMENTATION OF THE FARM SECURITY
AND RURAL INVESTMENT ACT OF 2002
U.S. SENATE,
COMMITTEE AGRICULTURE, NUTRITION, AND FORESTRY,
ON
Washington, DC.
The committee met, pursuant to notice, at 10:04 a.m., in room
SR328A, Russell Senate Office Building, Hon. Tom Harkin,
[Chairman of the Committee], presiding.
Present or submitting a statement: Senators Harkin, Leahy,
Conrad, Lincoln, Miller, Stabenow, Wellstone, Lugar, Cochran,
Fitzgerald, Thomas, Hutchinson, and Crapo.
STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM
IOWA, CHAIRMAN, COMMITTEE ON AGRICULTRE,
NUTRITION, AND FORESTRY
The CHAIRMAN. The Committee on Agriculture, Nutrition, and
Forestry will come to order on the hearing on the implementation
of the new Farm bill.
The Farm Security and Rural Investment Act of 2002 was passed
with solid bipartisan majorities in both Houses of Congress and
was signed into law with a strong statement of support by Presi-
dent Bush. It is a balanced and comprehensive bill that restores
farm income protection, boosts conservation more than any pre-
vious bill, helps rural communities build economic growth and cre-
ate jobs, and promotes farm-based renewable energy. It strength-
ens our support for trade, nutrition, food aid, and agricultural re-
search.
Implementing this new legislation properly is, of course, of criti-
cal importance to rural America. The committee is pleased to wel-
come Secretary Veneman; Under Secretary J.B. Penn; Bruce
Knight, chief of the Natural Resources Conservation Service; and
Keith Collins, USDAs chief economist. We look forward to a
progress report on carrying out the Farm bill and addressing issues
and questions that have come up in that process.
At the outset, I want to thank the many conscientious employees
at FSA, NRCS, Rural Development, and other USDA agencies for
all their work toward making the promise of the new Farm bill a
reality. I know in Iowa there have been a good number of informa-
tional meetings thanks to the USDA, the Iowa State University Ex-
tension and Farm and Commodity Organization. It all comes down
to developing reasonable and workable rules and regulations and
getting clear, consistent information out to those who need it.
(1)
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bers of our USDA team with us today, all of whom have been very,
very active in the implementation of this Farm bill.
Mr. Chairman, what I would like to do today is summarize my
formal statement and then respond to questions.
As you know, this new law contains many complex issues and
new programs that require a great deal of work to implement. This
includes writing new computer programs, implementing new regu-
lations, a massive updating of bases and yields, extensive training
for USDA employees, working with producers to make sure they
understand the changes in the new law so that they can best uti-
lize and receive the programs and the benefits.
USDA has had very short time frames to meet in terms of put-
ting these new programs into place. Even with all of these chal-
lenges, I have to say I am very pleased and proud of the progress
that the Department has made thus far in implementing the new
Farm bill. The implementation planning that we did prior to the
bill being passed has helped in that regard, and as soon as the
Farm bill was signed by the President, USDA went into high gear
to implement it. We will get checks to farmers on time.
All this progress could not have been accomplished without the
dedication and the hard work and the commitment of USDAs em-
ployees at every level around the country, and, Mr. Chairman, I ap-
preciate you recognizing our USDA employees around the country
in your opening remarks as well.
Many times over the years our employees have been called upon
to assist our Nations farm economy. What we have seen during
these past few months of the Farm bill implementation is no dif-
ferent. USDA employees around the country have worked tirelessly
to implement the new Farm bill, and they deserve a great deal of
praise for their efforts thus far.
I also want to thank all the members of this committee as well
as Chairman Combest and Congressman Stenholm and other mem-
bers of the House Agriculture Committee for their continued inter-
est in our work during the past few months. We have conducted
several member and staff briefings and appreciated your input and
suggestions as we have moved forward.
We also appreciate the input from the farm community, particu-
larly our farmers and ranchers who have made their views known
on implementation. We have a lot of suggestions, and we have con-
ducted listening sessions around the country, which has been help-
ful to make sure that we were acting in the best interest of our Na-
tions farmers as a whole, but at the same time taking into account
regional considerations.
We have been listening, and our recent announcement to provide
clarification regarding bases and yields is just one example of our
flexibility and desire to make the best available decisions as we im-
plement the many changes required in the new law.
As soon as the new Farm bill was enacted, we moved quickly to
set up an internal structure for implementation, and we did this
with a two-pronged approach. We established our sub-Cabinet as
the Board of Directors, and then we created a working group which
was chaired by three people: Keith Collins, who is here with us,
our chief economist; Hunt Shipman, our Deputy Under Secretary
for Farm and Foreign Agricultural Service; and Scott Steele, who
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Every regulation that you put out under the Administrative Pro-
cedures Act or under various Federal Executive Orders requires a
cost-benefit analysis, possibly an environmental assessment, pos-
sibly a risk assessment, an unfunded mandates assessment, a
Small Business and Regulatory Flexibility Act assessment, a civil
rights impact assessment and possibly an energy assessment.
That all flows from the fact that Congress did not want Federal
departments to regulate willy nilly and impose lots of requirements
on us to be sure that when we put out a regulation, when we put
out decisions, they are sound and well thought out.
Unfortunately, it took us until July 12th to come to that conclu-
sion on dairy, and we regret that, but we still think that we got
it out in a fairly timely way by getting the sign-up period beginning
in August. In fact, even though we do not have our computer soft-
ware done for the dairy program yet, we have started sign-up with
manual sign-up in order to get as close as we could to the July 12th
date.
Senator LEAHY. Mr. Chairman, I, obviously, disagree, and I will
submit a number of questions to the regard because we have a sit-
uation where medium-sized farms did not do as well as large farms
or small farms. They have left a huge gap in here.
Thank you.
The CHAIRMAN. Thank you, Senator Leahy.
[The Statement of Senator Leahy can be found in the appendix
on page 53.]
Senator Cochran.
THE STATEMENT OF HON. THAD COCHRAN, A U.S. SENATOR
FROM MISSISSIPPI
Senator COCHRAN. Mr. Chairman, thank you very much.
Madam Secretary, welcome to the hearing.
First of all, I want to commend you and your staff for the hard
work that you have turned in implementing this farm bill. It was
a huge undertaking, very little time available to you between the
enactment of that legislation and the sign-up periods that were
going to be occurring for this crop year. I commend you. You have
done an excellent job.
I happened to run into Mr. Penn the other day at the airport,
and we talked about some of the practical problems that were con-
fronted, and the enormous burden that was really imposed on the
Department by the Congress to do this in a very short period of
time.
I know there are going to be some difficulties encountered, one
of which you mentioned in your statement on Page 3. You talk
about the fact that you have a schedule for sign-ups, announce-
ments, payments to farmers. I wonder whether you can share with
us what the schedule is. We are asked by producers, when we go
back to our States when can payments be expected, when will all
of the sign-ups be scheduled. Is there anything you can tell us that
we can pass on to our producers in that regard?
Secretary VENEMAN. Well, we did announce last month that we
would begin sign-up on October 1st, with payments to be distrib-
uted shortly thereafter, and we continue to stand by that time line,
and we will be able to get payments out shortly after people sign
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I will tell youI mean, I dont know, maybe you could start out-
lining exactly how much you are going to take out of corn, how
much you are going to take out of soybeans, how much you are
going to take out of wheat, how muchCBO wont let you do it,
anyway. I mean, you are not going to be able to get the scoring
that way. You could support this. You wont. If we dont get the
support from the President and from the Secretary of Agriculture,
I am really worried that the help will not be there for people. Then
they will go under.
Are you sure you cant today say I support this, it had strong
bipartisan support, it is the right thing to do? You cant do that as
Secretary of Agriculture?
Secretary VENEMAN. I understand your concern, Senator, and,
again, I will reiterate that the President has been clear on the
principles that he had laid out for disaster assistance, and we con-
tinue to want to work with the Congress on disaster relief which
is consistent with those principles.
The CHAIRMAN. Thank you.
Senator Fitzgerald.
Senator FITZGERALD. Thank you, Mr. Chairman. Following up on
Senator Wellstones questioning, I just want to say I disagree with
Senator Wellstone, and I actually agree with the administration. I
want to compliment you for having the courage to say that we
ought to give this relief within certain principles, and there is no
easier way to score political points in Washington than just giving
money to everybody. Everybody who comes in my office every day
wants more money. Everybody wants more money. Somebody has
to pay for it, and the money that we are giving out around here
is not manna from heaven. It actually comes from the taxes and
paychecks of people who work every day, and so we have a respon-
sibility to treat that money very carefully and not just get out the
ladle and not ask questions. I want to compliment you for your
very careful approach in that regard.
Madam Secretary, I authored a section of the new Farm bill that
establishes a commission on the application of payment limits for
agriculture, and it required the members of the commission be ap-
pointed 60 days after enactment, and I believe it was enacted July
13th. I am wondering if your Department has turned its attention
to the appointment of commission members, and would you be able
to give me an update on where the USDA is in the nomination
process?
Secretary VENEMAN. I would be happy to, Senator. As you know,
this is a commission that is going to consist by law of ten members,
one of whom the Congress appointed itself, and he is sitting right
next to me. We do have one member appointed, but they are ap-
pointed three by the Senate, three by the House, and three by the
Department of Agriculture.
I can tell you that with regard to thewe have not received any
announcement on the three by the Senate or the House. I have had
meetings with my staff just this week on this very issue. We are
very close to making final selections on individuals that we believe
will do a good job on this commission. We would hope to be able
to announce the USDA selections in the very near future.
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so much above the market prices, we thought that was the food
price, rather than the feed price. We thought that was the price of,
No. 1, dry peas, rather than feed quality peas.
What we want to do, in establishing the loan rate, is to make
sure that we have the loan rate and the repayment rate the same.
We set the loan rate and said that is for food quality, and then we
set a loan repayment rate for food quality as well.
Senator CRAPO. What you are saying is you do not believe that
Congress clearly directed that we focus on feed peas, and No. 3-
grade lentils, and No. 3-grade chickpeas?
Mr. PENN. I understand that is what is in the managers report,
but I am saying because that price, the $6.33 was so far above
where market prices had been, we thought that was the food-grade
price, rather than the feed-grade price.
Senator CRAPO. Well, you are hearing from us that that is not
what we meant.
Mr. PENN. Well, as I said, we are trying to work with the various
producers and with the trade association for this set of crops and
to gather information so that in 2003 we can make changes in this
program as are required.
Senator CRAPO. Do I understand you to say, then, that you are
intending to move in 2003 to the feed peas, No. 3-grade lentils, and
No. 3-grade chickpeas?
Mr. PENN. We certainly want to follow the intent of the Con-
gress, as Senator Conrad reminds me over and over. We certainly
do. In this particular case, unlike the sunflower case, I mean, it
was just a misunderstanding about that. Because these prices are
so high, I mean, you understand it is going to cause acreage distor-
tions, it is going to distort the economics among the various crops,
it is going to draw acreage perhaps from wheat and other things
because the guaranteed price is so high. We just did not think that
that would be the intent, to tell you the truth.
Senator CRAPO. I understand. There can be quite a debate on
what the impact of your decision will be as well, and the program
was put together with a lot of careful facts. I appreciate your com-
ments, and I am going to work together with my colleagues to see
that we get this where we intended it with Congress.
One last quick question. First of all, I have a lot of questions I
will not get to, and I would appreciate the chance to submit them
to you for response.
The last quick question is that I do commend you for your imple-
mentation, Madam Secretary, of the sugar program. There is one
part of that implementation I am a little concerned about, and that
is that in the Farm bill, Congress eliminated the 1-percent sur-
charge on CCC interest rates on sugar nonrecourse loans. Unfortu-
nately, it appears that in implementing this rule, USDA has not
eliminated the sugar loan rate.
Do you intend to take action to correct that?
Mr. PENN. No, Senator. This is a case where again, there is going
to be a disagreement as to what is allowable in terms of implemen-
tation, but if I remember correctly, the statute allows us the discre-
tion as to whether or not to lower this interest-rate charge by 1
percentage point, 100 basis points.
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In effect, when the CCC operates the loan program, the 1996
Farm bill obligated us to increase the interest rate by 1 percentage
point over the cost of borrowing money from the Treasury, and we
do that for every commodity, and it is required in the law. It is only
for sugar and only in this farm bill that the language was changed
that you may not charge that for sugar.
Because we wanted to keep consistency and fairness among all
of the crops, and we wanted simplicity in implementing the pro-
gram, we elected to leave it as it had been in the past.
Senator CRAPO. Even though Congress directed that we elimi-
nate the surcharge, because we did not specify the loan rate, you
are going to continue to apply the surcharge?
Mr. PENN. It said we may or may not charge the additional 1
percent. It did not mandate that we do that, Senator.
Senator CRAPO. Thank you, Mr. Chairman.
The CHAIRMAN. Thank you, Senator Crapo.
[The prepared statement of Senator Crapo can be found in the
appendix on page 58.]
Senator Conrad.
Senator CONRAD. Thank you, Mr. Chairman.
I would like to go back to the pulse-rate question and put up
again, I hope you understand the frustration, after spending hun-
dreds of hours writing this farm bill, and basically you all fought
us every step of the way, we get the job done in a way that we in-
tended, and now we see you undoing what we spent hundreds of
hours crafting.
On the pulse crops, Senator Crapo has raised, and I appreciate,
Senator, your raising the subject because it is another example of
defying the intent, a clear intent of Congress.
This is the managers language with respect to the pulse crops,
and this is language that I wrote. I do not know how it could be
more clear. The conference substitute established a marketing as-
sistance loan program for pulse crops, dry peas, lentil and small
chickpeas. The loan rate for dried peas is based on U.S. feed pea
prices. The loan rate for lentils is based on the price of U.S. No.
3 lentils, and the loan rate for small chickpeas is based on the price
of chickpeas that drop below a 20/64 screen.
That is what Congress said. That is what Congress directed. The
statute specifies the rate, but that is not what you have done. You
have created this differential.
Now I heard in the responses to Senator Crapo what I hope to
be an opening here. Madam Secretary, will you reconsider the ac-
tions that have been taken with respect to the so-called pulse
crops?
Secretary VENEMAN. Well, as Dr. Penn indicated, that it is clear
from his answer that we will take another look at this, as we look
at these for the 2003 crop year.
Senator CONRAD. You will not reconsider for 2002.
Secretary VENEMAN. Well, we are in a position where we have
tried to implement this farm bill, as has been indicated by a num-
ber of the members here, in a very short amount of time. Our peo-
ple have done yeomans work trying to do that and make the cal-
culations. We are learning things from it, and we will reconsider
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certain things for the 2003 crop year. There is no question about
it. Dr. Penn has indicated that.
Let me
Senator CONRAD. Can I just ask why were those of us who wrote
it not asked? We are a phone call away. The intent of Congress,
you have already acknowledged, should prevail. Why did anybody
from the Department not pick up the phone and call us up, if you
were confused about it, and just ask?
Secretary VENEMAN. Let me just say, Senator, and this is very
important, every meeting that our folks have had on the implemen-
tation of this farm bill has been attended by our lawyers. We are
doing nothing contrary to what our lawyers advise that we can do
with regard to the implementation of this farm bill. I just do not
want people to get the impression that we are not following the law
here because we are taking every action.
There is, as I said before, a lot of discretion that the Department
has to determine with regard to this farm bill, but I feel very
strongly about getting legal advice, and our folks have had lawyers
at every single meeting.
Senator CONRAD. You have said, Madam Secretary, you have
said the lawyers disagreed. There was a disagreement among the
lawyers. The lawyers do not run USDA, you run USDA. You make
the decision, you have been appointed by the President, confirmed
by the Congress to make those decisions.
I would say to you, Madam Secretary, if you have lawyers that
are confused on this point, you need new lawyers. It could not
be
Secretary VENEMAN. I did not say lawyers were confused on this
point. I talked about lawyers not agreeing on the Section 11 issue
with regard to technical assistance, and that was not
Senator CONRAD. Are you saying that your lawyers consistently
have advised you, all of your lawyers are telling you that what you
have done is what Congress intended on sunflowers, on pulse
crops? All of your lawyers are telling you that that was the intent
of Congress?
Secretary VENEMAN. Our lawyers are telling us that what we are
doing is within the scope of the law that has been passed by Con-
gress.
Senator CONRAD. Well, I will tell you, that is truly, it is unbeliev-
able to me. I mean, I have read from the statute with respect to
the oilseeds. I have read to you from the managers report with re-
spect to pulse crops. I wrote the section. There is no question what-
ever on what was intended. Everybody who participated in those
talks knows what was intended, but that is not what you have
done, and I find that very troubling because you have decided just
to go your own way and defy what Congress has said.
It is pretty clear you took $165 million out of this farm bill that
Congress intended farmers to receive. Because when we went to
CBO and asked them what it would cost to reverse course, they
said it is $165 million. You took, on your own, $165 million right
out of the minor oilseeds. I do not know what other conclusion one
can come to. That is, this administration, through you, this depart-
ment, you, you are the one that made these decisions, saying to
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Congress, We do not care what you guys say. We have our own
view of what makes sense, and that is wrong.
Mr. PENN. Senator Conrad, let me just respond that it is cer-
tainly not our intentyou talk about the intent of the Congress
but it is not our intent to violate the intent of the Congress. I
mean, what we are trying to do, as the Secretary said, is imple-
ment these programs in the most fair, equitable, efficient way that
we can.
This conference was a long, drawn-out, protracted process. We
had people in the conference, in all of the sessions. We had lawyers
there. We had program analysts there. All of our people were privy
to all of the discussions, and as Secretary Veneman said, our law-
yers are not saying go against the intent of the Congress, we are
just trying to interpret the statutes in the best way we can and use
the flexibility that we have to try to put together these programs
in a way that makes sense, and so we are trying to carry out the
intent of the Congress. It is just that we do not always agree as
to exactly what you intended, and there is not always unanimous
intent among the Members of the Congress as to what was in-
tended.
Senator CONRAD. I could just say to you, in conclusion, with re-
spect to these provisions, I was there for every minute. I wrote
these provisions. It is just as clear as it can be what was intended.
The language is clear, and I hope we are able to resolve it.
Mr. COLLINS. Could I just join this party for 1 second? I am not
going to comment on your legal interpretation, Senator Conrad, but
the impacts that you have described are something that I am not
sure that we would agree with. We have been fortunate, for per-
haps unfortunate reasons, to have very high oilseed prices this
year, prices that are above loan rates.
The description you gave earlier of a farmer who is losing quite
a large amount of money because of this decision or the costs that
you just gave of our decision, in terms of leaving $160 million on
the table, quite frankly, I do not think I could support those kinds
of estimates.
Senator CONRAD. That is what you told CBO.
Mr. COLLINS. I never told CBO any such thing.
Senator CONRAD. Well, USDA told CBO that it would cost $165
million. That is where the number came from.
Mr. COLLINS. That may be somebodys version of baseline scor-
ing, but in the real world, oilseed prices are well above loan rates
right now, and we are not going to see those
Senator CONRAD. Well, I will tell you it would be helpful if you
had not told when Congress moved to put in place what they in-
tended in the first place, that you did not act to subvert it by put-
ting in a high score. You told them it would cost $165 million.
The CHAIRMAN. Senator Lincoln.
STATEMENT OF HON. BLANCHE LINCOLN, A U.S. SENATOR
FROM ARKANSAS
Senator LINCOLN. Thank you, Mr. Chairman.
Once again, Mr. Chairman, thank you for bringing us here this
morning and for your continued leadership on the Farm bill proc-
ess.
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were made. Dr. Collins went into that in much more detail, and we
can have him do that again if you would like.
Senator CRAPO. Go ahead.
Mr. COLLINS. If I could, at the risk of stepping into one more con-
troversial issue. A criterion that people are using to judge our deci-
sions as being unfair is the statement that large producers are ben-
efiting more than small- and medium-sized producers.
Senator CRAPO. Right.
Mr. COLLINS. Unfortunately, the way this program is con-
structed, that is the expected case no matter what you do, not only
for this year, but for future years as well.
Senator CRAPO. I agree with you on that.
Mr. COLLINS. The reason for that, of course, is that there is a 2.4-
million-pound eligibility cap, not a payment limit. Congress could
have chosen a dollar payment limit. Instead they chose a volume
cap. That means, for a large producer, they are going to reach their
cap within 1 or 2 months. By giving a large producer, and all pro-
ducers, an opportunity to choose the starting month so that they
can maximize their payment, guess what? The large producers
market the whole 2.4 million pounds in the months with the weak-
est prices. They will choose April and May or whatever to start the
clock under 2.4 million pounds.
It is inevitable that the expected value of this program is the
large producers will have a higher average payment rate than
small- and medium-sized producers. There is no way around that.
People keep criticizing us for that being an outcome of this pro-
gram; it is endemic, it is inherent in the way the program was con-
structed.
Senator CRAPO. Doctor, I understand that. In fact, when we de-
bated this, that was one of the arguments I made about the unfair-
ness of the program and the impact that it was going to have.
That having been said, it seems to me that at least we ought to
try to do what we can within the flexibility of the program to mini-
mize that impact, and that is the reason for my question.
Mr. COLLINS. Fair enough.
Senator CRAPO. Thank you, Mr. Chairman.
Secretary VENEMAN. Senator or Mr. Chairman, if I might, just
for a minute, respond to Senator Lincolns questions just quickly,
and we can provide more for the record.
I absolutely agree with you. We want to do the right thing with
regard to implementation and do it as fairly as possible. Obviously,
we are having to work under very quick time frames. Your col-
league from Arkansas, Mr. Hutchinson, raised some of these issues
as well, and we responded that we are working through our FSA
offices to help producers make the kind of decisions that you have
talked about in terms of bases and yields and the kinds of things
that need to be updated and that they will need assistance from
FSA.
We have computer programs. Senator Hutchinson brought up the
fact that not everybody has access to computers, but we can make
that available through FSA, and we will do that and work with our
FSA folks.
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I read for you. That is, funding from the program funds authorized
by Section 1241(a). That is what I read. They intended an ade-
quate level of funding... That is our wording. ...not one subject to
the arbitrary limit contained in Section 11 of the CCC Charter
Act.
The conference managers rejected the Senates approach of leav-
ing technical assistance funding under Section 11, but exempting
such funding from the cap to obtain adequate funding levels. In-
stead, they took as their guide, and this is key, the funding mech-
anism for technical assistance under EQIP, which was outside of
and not restricted by Section 11. Not only is this apparent from the
text of Section 1241(a) including the provision of technical assist-
ance, but it is stated as the intent of the conferees in the con-
ference report accompanying the Conference Bill H.R. 2646.
It is clear from the text of Section 1241(a) and the underlying
legislative history, that Congress intended the various programs
made available under the section to be the primary source of fund-
ing for the technical assistance related to the respected programs.
Now I will say that in the back of this is an addendum from
OMB saying they disagree, but you run the Department of Agri-
culture. I want to know why the legal opinion of the USDA general
counsel is invalid and why it is disregarded by you in this provi-
sion.
Secretary VENEMAN. Mr. Chairman, I have not disregarded the
opinion of our general counsel. As you point out, you have the docu-
ments. There is a disagreement between the general counsels, and
we have tried
The CHAIRMAN. Between the general counsel and whom? There
is no disagreement. I just read it to you. I have the whole thing
from the general counsel. There is no disagreement.
Secretary VENEMAN. Well, you said you had another memo that
disagrees from OMB.
The CHAIRMAN. That is from OMB. That is right. I am just talk-
ing about why you are disagreeing with your general counsels posi-
tion.
Secretary VENEMAN. I am not disagreeing with my general coun-
sel, sir.
The CHAIRMAN. You agree with general counsel.
Secretary VENEMAN. Well, my counsel has given me that advice,
and I do not disagree with the advice.
The CHAIRMAN. Then what you are saying is that for those seven
programs, that they do not fall, and according to you, they do not
fall under Section 11 caps.
Secretary VENEMAN. That is the advice we have been given by
our general counsel.
The CHAIRMAN. You agree with that advice.
Secretary VENEMAN. I have no reason to disagree with that ad-
vice.
The CHAIRMAN. Well, then, why was technical assistance then
provided for EQIP and WHIP, two of them that were listed here,
but not for the WRP and the Farmland Protection Program? USDA
requested it, by the way. Why was it not?
Secretary VENEMAN. Mr. Chairman, as I indicated, there has
been a disagreement among the lawyers of the two, of USDA and
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tor, or they can pick up the phone and send it directly. Now, of
course, with e-mail they can certainly send them in. We have been
taking special pains, when we see two or more questions on the
same topic, to try to as quickly as we can prepare an answer, get
it back to the people who posed the question, but, more impor-
tantly, put it on the FSA website in the Q&A column there so that
it is available to everybody all over the country.
We appreciate your compliments on the website because we have
really tried to use that as a new medium this time to disseminate
information.
The CHAIRMAN. Good.
Mr. PENN. It gets picked up by the press. It is picked up by the
extension services. It is utilized by lots of people.
I dont know if we have a formal mechanism, but we have en-
couraged everybody when they run into something they dont know
about to get it to somebody who does, and we try to prepare an an-
swer and make it available widely.
The CHAIRMAN. I appreciate that.
I just have two other things. One, on the Rural Business Invest-
ment Programand I am concerned about how we are moving
ahead on that. The Farm bill has been passed now 4 months. I un-
derstand that USDA still has not signed an interagency agreement
with the SBA toward development of rules and management of this
important program. Again, can you give me some idea of how we
are moving on that? I know you have a lot on your plate. I under-
stand that. The need for investment capital in rural America is
drastic. Can you give me some idea of how we are progressing with
the SBA on this?
Secretary VENEMAN. Senator, we will get you a response on this
issue. I cant give you an exact timeframe, but I know that you and
I agree on the importance of these rural development programs and
investment in rural America. You mentioned our Broadband Pro-
gram which is new in the Farm bill. We have a tremendous num-
ber of grants out with new funds that were provided by the Farm
bill in the rural development areas, and we will check on this and
get an answer back to you as to what timeframe.
The CHAIRMAN. OK. I appreciate that. I have some, again in my
own Statethat is what happens when you go out for a month.
You hear all these things, and what I heard was that people are
looking at this provision and they want to know when they can
start applying for some of this assistance. We have had some farm
credit organizations, even some banks in Iowa, have asked me
about it. I said, well, we justI am sure that soon we will have
some regulations out on it and get this agreement made with the
SBA to move ahead on it. I hope that, again, your area of rural de-
velopment that is doing this will move ahead expeditiously, work-
ing with the SBA to get this agreement made.
I will close on a good note. I just want to personally thank you
and your staff, particularly those at the Food and Nutrition Serv-
ice, for your outreach and preliminary implementation work on the
nutrition title. I have heard back really good things on it. You have
made some terrific strides in simplifying program rules and ex-
panding food stamp benefits. Now just make sure States know
about the various options available to them and implement the food
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stamp changes and other programs like the free fruits and vegeta-
bles. I am getting a lot of interest in this free fruits and vegetables
program, and, again, my staff has told me and I have experienced
it at least a couple of times where your people in FNS have been
really very good at getting information out and support and that
type of thing. Thank you for that.
Well, Madam Secretary, do you have anything else that you
would like to add before I adjourn?
Secretary VENEMAN. Well, Mr. Chairman, I would just like to
thank you for holding this hearing. Again, I know there are dis-
agreements in some areas, but I just want to say that the USDA
staff at every level, from the top to the county office staff, have
done a tremendous amount of work to implement this Farm bill in
a very short amount of time, and our farmers and ranchers and all
of us owe them a tremendous amount for everything they are doing
to try to do the best job they possibly can.
The CHAIRMAN. Well, I thank you. I would just note for the
record that in your statement you said the bill includes 10 titles
and over 400 pages. I just want you to feel good. The 1990 Farm
bill had 25 titles and 751 pages.
[Laughter.]
The CHAIRMAN. We are making some progress, I guess.
Well, thank you very much, Madam Secretary. We look forward
to working with you, but we do have these problems in terms of
carrying out what we believe is the law and the intent. Senator
Conrad went over his; I went over mine, my problems with OMB,
and this cannot stand. This cannot stand. Our Government oper-
atesI am not going to give you a lecture on Government. You
have been in it as long as I have, practically speaking. We only op-
erate on comity and recognizing our spheres and where we act. We
pass laws, and we put our intents. We write our reports to give
clear indication of what we intended. If the administrationand I
dont mean this one, any administrationthumbs its nose at us,
that breaks down the structure of our Government, breaks down
the structure in which we operate. I dont like to see a Government
operate where we are clashing all the time and continue to clash.
That just breaks down, the very structure that has enabled our
Government to succeeed for so long. OMB is on a dangerous course
here. To the outside observer, that might seem small, well, this is
just agriculture, what the heck? I am telling you, it is big. We are
going to have to have some real serious meetings with OMB to get
them to understand this.
Thank you very much, Madam Secretary.
Secretary VENEMAN. Thank you, Senator.
[The prepared statement of Secretary Veneman can be found in
the appendix on page 62.]
The CHAIRMAN. Thank you. The committee will stand adjourned.
[Whereupon, at 12:48 p.m., the committee was adjourned.]
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APPENDIX
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