Vilsack addresses key topics in Senate Ag hearing
Key topics addressed by USDA Secretary Tom Vilsack at Thursday's Senate Ag Committee hearing:
o Baby infant formula. Senate Ag Chair Debbie Stabenow (D-Mich.) noted Vilsack has “been very busy on a number of fronts, making sure WIC moms can get baby formula amid a national shortage. I appreciate how quickly, once you were notified, you went into gear. And I also want to thank Sen. Boozman and the whole committee for us working together on a bipartisan basis to — to take action.”
Vilsack said he is using the additional authority Congress provided in terms of WIC “that will allow us to work with those who produce formula in this country to create more supply.” He said USDA sent a letter to all of the state health commissioners as well as to Gerber, Nestle, and [Rickett] Mead Johnson “indicating our willingness to work with them to provide waivers so that they can continue to expand contract brand options. In terms of the WIC, state agencies allow the use of contract brand alternatives that were not previously authorized, as well as temporarily allowing them to use non-contract products to be substituted.” Vilsack said the U.S. government “will pay the rebates in — in the WIC budget itself so the companies will not be at risk financially for these substitutions. I think it will help assist in expanding access to product.”
o Next farm bill field hearing in Arkansas. Sen Boozman announced Stabenow would be joining him in Arkansas next month for a second farm bill field hearing. “We'll be holding our next field hearing in Jonesboro, Arkansas on June 17. I'm excited to share the views of Arkansas's hardworking farm families with the chairwoman and my colleagues on the committee,” Boozman said.
o CRP. Boozman supported USDA’s early Thursday announcement that will allow some additional flexibilities for those with expiring CRP contracts. “But I believe that we can do more,” Boozman said. “One suggestion is look to the past. In the 2014 Farm Bill, landowners enrolled in the CRP were given an opportunity to end their contracts early without penalty. We should give serious consideration to this — penalty free incentive again until grain production returns to normal.” Boozman added that this flexibility would allow “potentially millions of acres to return to food production. The world cannot afford for prime farmland to lie fallow.” He also said in regard to EPA and USDA that there should a two-year pause on any regulatory changes to currently approved crop protection tools. “Producers need the regulatory predictability to plan for the future, and the companies that produce these inputs need the regulatory certainty to bring those tools to the market. American agriculture can meet this unprecedented moment. The federal government should ensure it's not in the way.”
Vilsack said “many, if not most” of the acres in CRP are “really not very productive” because they are “highly erodible areas and areas that are not particularly productive.” Added Vilsack: “We think that farmers can be trusted to make the right decisions.”
o Crop insurance and prevent plant. Committee members John Hoeven (R-N.D.) and Amy Klobuchar, (D-Minn.) both urged Vilsack to consider offsetting penalties facing farmers who claim insurance benefits for prevented planting and then plant a crop later. Under existing rules, those farmers will get only 35% of their prevent-plant benefit. Storms “have created significant challenges for farmers who are already behind on grain planting,” Klobuchar said. Vilsack said eliminating the penalty would put crop insurers at risk. In a letter (link) to Vilsack ahead of the hearing, Hoeven, Klobuchar and other Minnesota and North Dakota lawmakers asked to offset the penalties outside of the crop insurance program “to maintain the actuarial soundness of crop insurance while shielding” crop insurance companies from risk. Vilsack said USDA “will certainly take a look at the correspondence we received yesterday and make a decision as quickly as we can.”
o Poultry competition. Vilsack said earlier on Thursday, USDA filed, to try to create more new and better markets for farmers, the beginning of a process on the Packers and Stockyards Act. “We start with the poultry tournament rule,” Vilsack explains, adding there are two components. The first is an effort to try to create greater transparency between integrators and producers, providing additional information to the producer before they enter into contracts. It's modeled after the FTC franchisee disclosure efforts, Vilsack reveals, saying it is “really designed to help producers be able to better value the costs and risks that they're taking in entering into a contract with an integrator. It allows them to manage that risk by knowing a bit more about who they're doing business with. We're requesting that they — the integrators — provide information concerning the number of placements and the stock density, a history of payments under prior tournaments so that folks can understand and appreciate where they might be in the process… A bit of information about the background of the integrator, whether they've been in bankruptcy at any point in time, whether they're involved in litigation. And the ability of producers to be able to share that information with their financial advisors and those who are providing them legal assistance, so that they're in the best possible position to understand and appreciate the risk.” Vilsack said there will be an exemption for very small live poultry dealers in this proposal. In addition, he said, USDA has provided additional disclosures concerning the inputs that a farmer is receiving, both at the time of placement and at the time of settlement. “We want the farmer to be able to understand the breed, the fact -- the facility that was breeding the stock that they're being provided, the sex, the flock age, health issues that may have cropped up. And essentially at the time of the settlement, understanding the distribution of inputs, the housing specifications, feed disruptions that may have impacted and affected the rankings.” All of this is designed, Vilsack said, “to avoid deception and to provide farmers with the ability to understand precisely what they're getting into. A 60-day comment period… we believe from our analysis that the benefits of transparency and additional disclosure exceed the costs.”
Vilsack also revealed that USDA will be filing a study that was done on competition in the retail and seed area.
o Meat processing expansion. Vilsack also noted that USDA on Thursday morning announced a $200 million effort to try to help existing meat and poultry facilities. It's an intermediary loan program. It's going to provide grants to co-ops, other nonprofit organizations, public agencies, to create revolving loan funds to assist and help those facilities to remain in business, Vilsack explains. USDA also announced a $25 million effort to try to expand workforce through NIFA programs. “We think this is an opportunity to expand capacity. This goes along with the additional opportunities that we announced, in terms of additional processing capacity. We received 263 applications for the $150 million grants that are available,” he detailed. “It totals about $895 million of interest; 46 states, 111 beef applications, 33 poultry applications, 69 pork applications, 25 lamb, and 14 goat. The projected cost of all these projects, roughly $5 billion. So, there's obviously great interest in this program.” Vilsack also said USDA saw “great interest” in the Climate-smart Agriculture and Forestry Product Partnership Initiative. “We received 450 applications, $18 billion in requests from all 50 states. A diverse pool of applicants, nonprofits, cooperatives, for-profit organizations, government entities, commodity groups, forest groups, tribes, universities, small and large corporations. A wide range of commodities involved. This is the first of two application deadlines. June 10th is our small application deadline, about $8 billion of additional leverage.”
o Kentucky disaster. Senate Minority Leader Mitch McConnell (R-Ky.) noted that last December, Kentucky “got hit by the biggest tornado we've ever had. It actually ended up being on the ground for over 200 miles. It hit and it largely destroyed the town of Mayfield, which is the biggest grain storage facility in our state. Completely wiped out… As part of the destruction with this grain storage infrastructure gone in Western Kentucky, not only do we lose millions of bushels of storage, we've got a problem that has to be fixed or we're basically out of business this year.” McConnell said he put a provision in the appropriations bill that asks Vilsack to identify funding sources to quickly address the matter to “not completely lose our ability to have storage for this year’s crop.” Vilsack responded he was aware of the matter and that his staff has been in touch with the Farm Bureau in Kentucky as well as McConnell’s own staff. “I understand that there is an idea for a series of pop-up storage facilities there. I think there are some concerns about precisely how cumbersome that particular solution might be, but we are very committed to working as expeditiously as possible to provide an alternative and to provide the resources that will allow your farmers to have storage,” Vilsack concluded.
o Inflation impact on farmers and small businesses. McConnell said “this inflation issue” has meant “we're all hammered with amounts to well over $5,000 of increase costs annually, including $780 in additional costs for food. In a rural state like mine, and a lot of the members of this committee have similar states, small business and family farms are getting hit at both ends. Every single conversation I've had with farmers in the last year, the burden of increased input costs has been right in the forefront.” Vilsack said USDA is looking at ways to increase productive land, going into production and that “if you expand supply it has a tendency to help bring costs down and potentially increase income.” Secondly, in terms of the fertilizer, Vilsack said there are several things underway. “We are working with farmers to make sure that they are fully aligned with the right application, the right time, the right location, the right amount. We have also provided a new risk management tool that encourages a split application of nitrogen to reduce the cost to farmers, the loss of productivity that may occur if they are unable to fertilize twice in a year. We also have allocated $500 million towards looking at a broad array of options, in terms of how we might be able to expand fertilizer capacity in this country and not be as reliant and as reliant as we have been on outside sources for fertilizer. And we're also looking at a number of strategies, in terms of ways in which we can better utilize precision agriculture to ensure that we are using fertilizer in the appropriate time and appropriate amount.”
o Growing Climate Solutions Act. Stabenow asked Vilsack to expand his comments more on this legislation which overwhelmingly passed the Senate. Vilsack termed the measure “extraordinarily important because it provides a vehicle through which we can provide the level of technical assistance that farmers and producers and ranchers need, to be able to understand and appreciate climate-smart practices. And we've been providing technical assistance to both the House and the Senate Ag Committees, an effort to try to find common ground. In terms of the Climate-smart Agriculture and Forestry Products Initiative, this is designed to essentially create opportunities for marketing of climate-smart commodities. We think there's a value-added proposition. We think it's an opportunity to expand income for farmers to be able to allow farmers to also qualify for ecosystem benefits.
o SNAP. During the hearing, Durbin highlighted the importance of the Supplemental Nutrition Assistance Program (SNAP) for feeding low-income seniors and individuals with disabilities who are served by the Supporting Living Facility program in Illinois. But USDA has recently tried to block these eligible residents from accessing SNAP benefits. Durbin asked Vilsack to end “the Department’s hostility” toward this program and help reach a solution. Vilsack said USDA is working on a pilot program to address the issue and examine other ways USDA could be more flexible for beneficiaries. He said USDA is trying to work with the state to develop the framework of a pilot that would allow this problem to go away so it does not have to be dealt with annually in the appropriations process.
o Nutrition programs. Lawmakers asked Vilsack to explain how USDA was helping schools deal with rising food costs and pandemic assistance for the school meals program. Sen. Kristen Gillibrand (D-N.Y.) asked how to assure the National School Lunch Program will provide adequate funding for student meals in the 2022-2023 school year. “I continue to have hope and faith and trust in the Congress to basically see the wisdom of continuing the universal free meal program for another year,” Vilsack said, referring to extending pandemic aid. “If that does not happen, then we will take a look at what we've done in the past which is to provide additional resources,” he stated. But without an extension of funding for universal free school meals, Vilsack said schools will be faced with a 40% reduction in funding for the program. “That's the reason why we've asked for an additional year,” he stressed.
o Roundup/glyphosate herbicide. Sen. Chuck Grassley (R-Iowa) asked Vilsack if he was consulted when the Solicitor General changed the federal government’s position that federal pesticide laws preempt state rules. The case at issue is a challenge to California’s effort to require Prop. 65 cancer warnings on Roundup/glyphosate. Vilsack said he was not consulted about the move but added, “We continue to work with the EPA, in terms of crop protection products, in an effort to try to make sure that farmers and ranchers have what they need.” Later, Sen. Roger Marshall (R-Kan.) chided Vilsack for not being more proactive on the matter. That prompted a frustrated Vilsack to remark, “With all due respect, I am representing farmers.” He then listed off several areas USDA has pressed on from E15 to disaster aid funding in Congress.
Vilsack said glyphosate is critical for maintaining U.S. crop production and addressing climate change. He stressed USDA has “been very clear with EPA in our conversations about these crop protection tools that we have to follow the science. Whatever the science says we should follow.” He also agreed that glyphosate herbicide, known by its Roundup trade name, is critical to no-till farming, which increases soil carbon and protects water quality. Losing glyphosate “would obviously impact and affect production, and I think impact and affect our ability to deal with climate.”
o Minnesota disaster aid. Sen. Klobuchar secured Vilsack’s commitment that USDA will provide disaster assistance for Minnesota farmers impacted by recent storms. “These two separate storm systems that passed through Minnesota with heavy rains recently…tornadoes destroying farms and grain bins, flooded fields, left several rural communities without power. Our FSA executive director has requested disaster designations for 62 counties,” said Klobuchar. “I led a letter this week with the Minnesota delegation supporting the request and hoping you can look at it completely.” Vilsack confirmed he would review Minnesota’s disaster designation requests swiftly, promising: “We’ll try to get that approved as quickly as possible.”
o Ocean Shipping Reform Act. Klobuchar underscored how her bipartisan legislation to help fix supply chains and ease shipping backlogs will boost agricultural exports: “We have seen vulnerabilities for U.S. exporters, including our ag exporters who’ve seen the price of shipping containers increase fourfold…And it looks like we're going to be able to reach some agreement so that our goods are actually taken by these international shipping conglomerates and that we get some fair prices by some rules that we're gonna push through with the Maritime Commission.” The Ocean Shipping Reform Act, which Klobuchar introduced with Senator John Thune (R-S.D.), passed the Senate unanimously in March. The House has a similar version led by Reps. Garamendi and Johnson. Vilsack was asked to talk about the impact of shipping container disruptions on ag exports and whether or not he thinks cracking down on some of these international shipping conglomerates, rates, and practices would be helpful.
Vilsack: “I had an opportunity to speak to four of the major shippers about this very issue, asking them to create and provide greater consistency in terms of access to containers, and the ability of empty containers that currently leave our ports to be filled with agricultural exports. Received commitments from all four of them to basically take a look at doing a better job. This has been a difficult challenge for American agriculture. We've seen some improvement recently, by virtue of the resources that we put in play to create a pop-up site in Oakland. We've also provided incentives to move empty containers, financial incentives. We also recently opened up another opportunity in Seattle. So, we're going to continue to work on this and obviously, I think the legislation that's going through the process is sending a strong message that we're not satisfied, we're frustrated with the progress up to this point.”
o Biofuel infrastructure investments. Klobuchar asked about the biofuel infrastructure investments that USDA has made. Vilsack said “in the very near future” to expect a release “announcing the availability of another $100 million to expand access to public systems and distribution systems that would allow for E15 and B20 to be more readily available. So that's going to continue.”
o Minority representation. Vilsack told Sen. Cory Booker (D-N.J.) that he is ensuring every USDA county committee in the country has minority representation. Vilsack said that a new USDA equity commission is examining the county committee system as it investigates a range of issues involving potential discrimination.
o Rice producer aid. Sen. Boozman asked about securing assistance for rice farmers who are challenged by flat rice prices with disproportionately and record high input costs. Boozman said, “Rice farmers and some of our specialty crop growers may lose hundreds of millions of dollars this year due to increased input costs and unlike almost every other commodity, they have stagnant prices. They simply haven’t increased while we have had this enormous increase as we all know with our input costs. I am worried about the future of our domestic rice production and infrastructure it supports, again, and concerned about our specialty crops. Will you commit to working with us to ensure the economic viability of our domestic rice producers and others like specialty crop growers who may be experiencing similar difficulties?”
Vilsack’s response: “Senator, I hope all of your questions are this easy to answer. Yes.”
o Canada dairy trade case not raised. No lawmaker specifically raised the issue of Canada’s TRQs on dairy where the U.S. has filed a second complaint under U.S.-Mexico-Canada Agreement (USMCA) procedures. But Vilsack mentioned the topic in passing as he responded to a question from Sen. Deb Fischer (R-Neb.) on the issue of white corn restrictions by Mexico. She prodded Vilsack to be “stern and resolute” with Mexico on the topic, which prompted him to interject, “We haven't shown a reluctance to do that with our Canadian friends on dairy.”
