House Agriculture Committee members quiz Vilsack on wide range of issues
February 12, 2015
Members of the House Agriculture Committee today quizzed Agriculture Secretary Tom Vilsack on many issues in a hearing on the rural economy that lasted more than two hours.
With many members asking about issues of particular relevance to their districts, the topics included crop insurance, the Conservation Reserve Program, cotton price, government peanut butter purchases, West Coast ports, country-of-origin labeling for red meat, imports of South American beef, sign-ups and cover crops in the new commodity programs, the Waters of the United States rule, catfish, dairy, forestry, and food stamps.
The hearing was marked by less partisan conflict than might have been expected for Vilsack's first hearing since the Republicans have taken control of the Senate as well as the House.
After Vilsack detailed farm bill implementation in his opening statement (see link), House Agriculture Committee Chairman Michael Conaway, R-Texas, opened the hearing by declaring his opposition to the proposals in President Barack Obama's budget to cut crop insurance.
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"With commodity markets plummeting and producers struggling to find financing, now is precisely the wrong time to weaken crop insurance," Conaway added.
"We have a new farm bill on the books that passed with bipartisan support," Conaway added in a post-hearing news release. "The president's proposed cuts to crop insurance, which the secretary has vocally supported, would undermine the farm bill and make the inherently risky business of growing our nation's food supply even riskier. We should recognize the contributions agriculture has made to deficit reduction and give the new farm bill time to work."
But Conaway also praised Vilsack and Risk Management Agency Administrator Brandon Willis for their "dogged determination" in implementing the yield exclusion for spring crops. He ended the hearing by telling Vilsack that he has "done a great job" on farm bill implementation. Conaway added that he does not want any details to go wrong.
House Agriculture Committee ranking member Collin Peterson, D-Minn., noted that he is "concerned about attempts to reopen the farm bill, whether by making changes to crop insurance, SNAP [the Supplemental Nutrition Assistance Program] or any other farm bill program. This is a very bad idea and could put everything we worked for in jeopardy. I hope this committee will remain united in opposition to additional cuts to farm bill programs. Quite frankly, the Agriculture Committee has done our work."
On crop insurance, Conaway questioned Vilsack's recent statements that the rate of return for insurance companies is 14 to 15 percent.
Conaway disagreed with the analysis that insurance companies have been making that much money, and noted that some reinsurers have told him they are considering exiting the business.
Using statistics from the RMA, Vilsack acknowledged that the rate of return on retained premiums has not been that high in recent years. He said that it doesn't work "to look at any one year" and decide if crop insurance is profitable or not.
But Conaway noted that the years Vilsack cited as highly profitable came before the implementation of the most recent standard reinsurance agreement, in 2011.
Crop insurance executives "are in the arena" going forward, Conaway said.
The chairman added that he fears the Office of Management and Budget has "a mindset that they don't want a public-private partnership" but want to make crop insurance a public program.
"We ought to keep it public-private," Conaway said.
"I agree with that," Vilsack replied.
Conaway asked Vilsack to share with the committee how RMA calculates the rate of return for the program, and Vilsack agreed that RMA would provide the information.
CONSERVATION RESERVE PROGRAM
Peterson told Vilsack he is concerned that the lower cap on the number of acres in the Conservation Reserve Program and the emphasis on protecting highly erodible land will "concentrate the program" geographically and that a lot of areas will be excluded.
"I'm worried about wildlife," Peterson said, adding that people are buying land for wildlife and then using federal conservation programs to pay for it.
"I guess that is OK," Peterson said, but he added that he wants farmers to be able to use the programs.
Rep. Randy Neugebauer, R-Texas, associated himself with Peterson's remarks.
Vilsack said he shared those concerns, but sees a larger issue of land tenure among young farmers and is working on that issue.
Neugebauer and Reps. David Scott, D-Ga., Austin Scott, R-Ga., and Rick Allen, R-Ga., all asked Vilsack about cotton prices, which the secretary said is a difficult problem to address.
Prices are so low, Austin Scott said, that he is worried that farmers will reduce their cotton acreage by more than the 15 percent that the National Cotton Council recently announced in its intended plantings report. Scott said he is also worried about reports that Pakistan may increase cotton plantings.
But Vilsack said he was heartened by Trade Representative Michael Froman's announcement today that the U.S. government will challenge China's export subsidies in the World Trade Organization. Vilsack also said he has urged China to be more transparent about its stockpiles of cotton.
Vilsack remarked that the Chinese "are sometimes unpredictable in their approach toward trade."
Rep. David Scott pointed out the federal government's "drastic decline" in its purchases of peanut butter.
Vilsack said he would assign Deputy Agriculture Secretary Krysta Harden, a Georgia native, to that issue.
Rep. Ted Yoho, R-Fla., also raised the peanut issue, saying that "we have to increase consumption" and suggesting that it be included in food aid.
COUNTRY OF ORIGIN LABELING AND CANADA
Several members asked Vilsack about the department's views on the country-of-origin labeling of red meat controversy with Canada. Vilsack repeated previous statements that nothing is likely to happen until the appeal of the World Trade Organization case is exhausted.
If the United States loses the case, Canada and Mexico will have the right to retaliate and the United States will enter into negotiations about the extent of the damages.
Vilsack said that a recent National Farmers Union study showed that Canada may have overstated the losses. If the United States loses and Congress doesn't want retaliation, it will have to repeal COOL for red meat or rewrite it with a North American label, he said.
The issue, Vilsack noted, is that the strict labels require segregation of animals, and the WTO has ruled that the segregation is an "unfair burden" on Canada and Mexico.
Separately, Vilsack noted that the Canadians "have been very reluctant to negotiate, very reluctant," on the Trans-Pacific Partnership. The Canadians, he said, "have been far less willing to negotiate" than the Japanese. The secretary added he is not sure if this is because the Canadians think the United States cannot complete TPP, or if their politics do not permit them to make an offer.
SOUTH AMERICAN BEEF
Several members asked why the United States is planning to allow beef imports from several South American countries that have foot and mouth disease.
Vilsack replied that USDA has determined that areas of South American countries are safe and that the United States must allow the imports if U.S. officials are to make arguments in other countries that they should accept U.S. beef even though the United States has had cases of mad cow disease.
Rep. Frank Lucas, R-Okla., former chairman of the committee, said farmers in his district have concerns that USDA will not allow cover crops to be included in the acreage base for commodity programs, even though USDA has been encouraging the planting of those crops.
Vilsack replied that he is not certain that the law gives USDA the flexibility to include those crops, because they have not traditionally been part of the commodity program. Vilsack asked the committee to provide the department guidance on what Congress intended in the farm bill.
WEST COAST PORTS
Several members asked Vilsack for his help on the labor dispute in West Coast ports.
Vilsack said he believes there are "only a couple remaining issues," and he hopes the situation is resolved soon.
"This is a very serious situation. We are fully aware of this," Vilsack said.
Rep. Bob Gibbs, R-Ohio, suggested that Obama use the Taft-Hartley law to make the ports function. But Vilsack said that requires a federal judge to issue an injunction. In the last 30 years, judges have been insisting on a "a higher bar" to issue the injunction, he said.
Rep. Dan Newhouse, D-Wash., said that the port situation is causing layoffs in apple warehouses. Washington companies can't get apples to China in time for the Chinese New Year, and poultry producers cannot get feed grains and are in danger of losing their certification, Newhouse added.
Several members asked Vilsack to take a more public position in opposition to the Waters of the United States rule.
Vilsack said he has worked to educate Environmental Protection Agency Administrator Gina McCarthy on "ephemeral streams" and to visit farms, which she has done.
Vilsack also told Rep. Rodney Davis, R-Ill., that EPA has extended the applications for its scientific advisory panel on agriculture to March 30. Davis said that there should be not just agricultural scientists but people with farm experience on the panel.
Vilsack repeatedly said that EPA is "a sister agency" and that he cannot take a more public position because "it is about having a relationship with EPA on a multitude of issues."
Asking EPA to pull the WOTUS rule would be "sort of like asking you to make sure the Senate does something," Vilsack said.
Rep. Chris Gibson, R-N.Y., said he was concerned that USDA is cutting funding for conservation programs when EPA is imposing a rule with "onerous requirements."
Vilsack said that although the administration has proposed cutting spending on some individual conservation programs overall, more farmers and more acres are enrolled in conservation programs than ever before.
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM
Rep. Jackie Walorski, R-Ind., who chairs the subcommittee on nutrition, said she would undertake a review of the SNAP program that would include everyone from government officials to nonprofit groups to beneficiaries. Vilsack promised to provide USDA's assistance in that effort.
Rep. Jim McGovern, D-Mass., asked Vilsack to "draw a line in the sand" against any cuts to nutrition programs. Vilsack noted that the program has historically low fraud and payment error rates.
Rep. Suzan DelBene, D-Wash., said she has "great hopes" for USDA grants to help SNAP beneficiaries find work. Vilsack noted that Washington State has pioneered the SNAP-related employment programs, and that 35 states have submitted more than 40 applications for the 10 grants that will be awarded.
Rep. Michelle Lujan Grisham, D-N.M., said she is concerned that able-bodied adults, who now have time-limited SNAP eligibility, will be thrown off the program in areas where there are no jobs.
Rep. Bob Goodlatte, R-Va., said that dairy producers are concerned about an interpretation of the new dairy program that would limit their ability to invest in another operation and get program benefits. Vilsack said USDA staff are still trying to figure out how dairy farmers can expand production and stay within the rules of the law.
Reps. Dan Benishek, R-Mich.; Doug LaMalfa, R-Calif.; and Glenn Thompson, R-Pa., all asked Vilsack about forestry problems.
Vilsack told Benishek that USDA had not been able to remove as much wood from forests as planned because the U.S. Forest Service had to use money from other accounts to fight forest fires. He urged Benishek to support a proposal in Obama's budget to establish an emergency account to fight fires. The proposal would not increase spending, but would allow a more orderly use of the funds, he said.
LaMalfa said he would work on the emergency funding issue.
Thompson said, "We have had decades of neglectful bipartisan management" of the forests, but he believes some progress is being made in forest management. Thompson said he would like Vilsack to work with him so that the nation's forests can go from "burning money" to "making money, growing money."
Responding to Rep. Rick Crawford, R-Ark., Vilsack said he believes the rule on moving catfish inspection from the Food and Drug Administration to USDA should be released in April.
TRADE PROMOTION AUTHORITY
Vilsack said the White House has given him responsibility for educating 13 members of the House and Senate on the need for trade promotion authority, and that some of them were sitting in front of him today.