Senate Agriculture Committee Field Hearing at Michigan State University

Senate Agriculture Committee Field Hearing at Michigan State University

                                     Tuesday, May 31, 2011  

The purpose of the hearing was to discuss opportunities of growth for American Agriculture and focused on the reauthorization of the Farm Bill examining agriculture, energy, conservation, rural development, research, forestry, and nutrition policies that affect Michigan.

Panel I Witnesses:  Welcome from Michigan State University

Dr. Lou Anna K. Simon

President, Michigan State University, East Lansing, MI

• MSU’s leadership in specialty crop research has yielded USDA awards of $23.8 million in the last three years. This funding is invested in improving the quality, yield, and diseases resistance of Michigan’s main agriculture crops. MSU has begun the process of consolidating to better serve the state within funding constraints that are apparent with the 2012 Farm Bill.

Dr. J. Ian Gray

Vice President for Research and Graduate Studies, Michigan State University

• Support for CREATE-21 should be continued. “Create Research, Extension, and Teaching Excellence for the 21st Century” is requiring more funding of approximately $2 billion per year over a seven year period. Research would make up to 55 percent of the total and integrated programs would comprise the remaining 45 percent. This would allow the USDA to improve university research programs and develop the science that will guide the direction of American agriculture of the future.
• MSU’s research programs are the basis for new applications in agriculture that improve productivity, economic value, nutrition and safety. MSU has been focusing on research that benefits U.S. agriculture in the following areas.

-          Genomics and improved potato breeding

-          Cold tolerance

-          RosBREED project

-          Oil engineering

-          Swine production

Dr. Thomas G. Coon

Director of Michigan State University Extension, East Lansing, MI

• The national on-line presence of the Cooperative Extension, eXtension, continues to grow with investments from Farm Bill appropriations.
• MSUE supports current Farm Bill legislation such as North Central Region Center for Rural Development which is hosted by MSU.
• Federal support for Extension programs under the Farm Bill is an investment that promotes national stability and garners local and state support. Every dollar received from Smith‐Lever and Hatch funding is leveraged 16 times with funds from state, local, and grant sources making  funding given to Extension services though the Farm Bill, a prudent investment.
  
  

Panel II Witnesses:  Michigan Agricultural Production and Farm Bill Principles

Mr. Clark Gerstacker

Corn and Soybean Production; Member, Michigan Corn Growers Association, Midland, MI

• Important for Michigan farmers to have access to affordable risk management tools. 2012 Farm Bill is important because it ensures that the two percent of Americans that comprise the nation’s agriculture sector continue to provide low priced food for the other 98 percent of Americans.
• ACRE and crop insurance absolutely are very effective and cannot be relinquished in the new Farm Bill. Adjusting ACRE program triggers to be tied more closely to the individual farm will protect farmers from repetitive crop losses.
• 2012 Farm Bill should strive to be producer-based not land owner-based. This assures that the land owner who simply leases out the land does not reap benefits but only the crop grower who assumes all the risks.

Mr. Ben LaCross

Cherry Production; Chair, American Farm Bureau, Young Farmers and Ranchers Committee, Cedar, MI

·         Young agriculture producers need the 2012 Farm Bill to consist of research, support mechanisms, rural development, conservation, and market access.

·         Value added agriculture is significant driver of Michigan’s and nation’s economy. Processed fruits and vegetables have a significant plane in America’s economy and the 2012 Farm Bill Committee should consider restoring processed fruits and vegetables back into the snack program.

Mr. Ray Van Driessche

Sugar Beet Production and Conservation, Director of Community and Government Relations, Michigan Sugar Company, Bay City, MI

• Key reasons that a strong domestic sugar industry and an effective sugar policy are needed in the U.S.

-          Food security

-         Importance of size and efficiency

-         Restructuring

-         Trade challenges

Ms. Julia Rothwell

Apple Production; Chair, U.S. Apple Association, Belding, MI

·         The economic health of rural communities in Michigan is directly tied to specialty crops such as the apple industry. The most viable 2008 Farm Bill programs that should be continued or developed to protect the America’s specialty crops are:

-         Specialty Crop Block Grant

-         Specialty Crop Research Initiative (SCRI)

-         National Clean Plant Network

-         Market Access Program (MAP)

-         Technical Assistance for Specialty Crops Program (TASC)

-         Tree Assistance Program (TAP)

-         Immigration reform and worker guest programs

Mr. Ken Nobis

Dairy Production; President, Michigan Milk Producers Association, St. Johns, MI

• The Price Support Program disadvantages dairy farmers in today’s dairy industry. The cost of producing a hundred pounds of milk in the U.S. averaged about $17.30 during 2008-2010, and the Dairy Product Price Support Program only supported the price of all milk produced at $10.90.

•  Milk Income Loss Contract (MILC) program is ineffective because recent increases in feed costs have eroded the MILC-fixed price target and have created inequities among dairy farmers based on the scale of their operations. Less than half of milk producers are currently eligible for MILC payments thus rendering it an ineffective safety net.

Mr. Peter B. Blauwiekel

Pork Production; Member, Michigan Pork Producers Council, Fowler, MI

• NPPC has organized a Farm Bill Policy Task Force with the purpose of gathering opinions from producers around the country
• NPPC hopes Congress will consider the following factors in evaluating the needs of the U.S. pork industry

                     -Maintain the U.S. pork industry’s competitive advantage

                     - Strengthen the industry’s competitiveness

                     - Defend the industry’s competitiveness by opposing unwarranted rules

Panel II Questions:

1. Senator Roberts ask Ms. Julia Rothwell to rank the top two most important USDA programs. Miss Rothwell declines.

2. Senator Roberts asks about dairy policy and if the U.S. is still a reliable seller. Mr. Ken Nobis answers that efforts should be focused on international marketing.

3. Chairwoman Stabenow asks about how to build value-added programs.

      Mr. Van Driessche says funding is needed with developing processing.

4. Chairwoman Stabenow asks why Michigan dairies were better of than the rest of the dairy industry.

            Mr. Ken Nobis states, “We have, it’s because we are smarter”.

5. Senator Roberts asks about the ACRE program noting that 6% Michigan farmers signed up. Timing and complexity of payments received are impediments.

6. Chairwoman Stabenow asks what can be done to help beginning farmers.

      Mr. Ben LaCross states that credit access and generational transfers are the       biggest problems.

Panel III:  Farm Bill Stakeholders in Michigan

Mrs. Karen Serfass

Forestry Production; Past President, Michigan Forest Association, Dafter, MI

·         Congress needs to consider enabling new income sources and reducing costs of land management.

1.       Federal green building policies should be revamped that discourage use of wood products

2.       Development of other market-based approaches to conservation such as carbon storage, water and renewable energy

3.       Reduce regulatory burdens on family forest owners such as the potential for new Clean Water Act regulations on pesticide applications and forest roads

4.      Permanent repeal of the estate tax

Ms. Kristen Holt, President

Quality Assurance International (QAI) and Senior Vice President, Food Safety & Quality, NSF International, Ann Arbor, MI

• Programs that impact the organic industry extend beyond the Horticulture and Organic Agriculture title of the Farm Bill to conservation, trade, research, rural development and crop insurance.
• The 2012 Farm Bill committee should focus on areas addressed by the public sector to include long-term research. Programs should be evaluated based on return on investment, and policies should be supported that improve rural incomes and long-term sustainability of soil, water and human resources.
• Full support for the organic titles from 2008 would yield a return on investment equal to 40 dollars returned for every federal tax dollar spent.

Mr. Eric Davis

Director, Food Initiative, United Way for Southeastern Michigan, Detroit, MI

• The Supplemental Nutrition Assistance Program (SNAP) helps alleviate family hunger. The
  United Way
  pursues opportunities to create better access to affordable, nutritious food and encourages the 2012 Farm Bill committee to ensure that SNAP continues to meet the needs of Michigan and the U.S.

-          Focus should be on strengthening the safety net in rural communities

-          Streamline access through cross-sector efforts ( Michigan Benefits Access Initiative)

        

Mr. Dennis West

President, Northern Initiatives, Marquette, MI

• A restoration of the $100 million of mandatory funds each year to a Rural Renewal Initiative is needed to help create job opportunity in rural America. The utilization of the following programs funded should be prioritized in areas suffering from higher unemployment, low incomes and high poverty.

-          Intermediary Relending Program

-          Rural Micro entrepreneur Assistance Program

-          Rural Business Enterprise Grant Program

-          Water and Sewer Program

-          Water and Sewer Program

.

Mr. James Reid

Reid Dairy Farm, Grant Township, MI

• REAP allows operations to implement energy efficiency practices. Total investment cost in installing the solar panels on the Reid Dairy Farm was over $140,000. The reduction in energy costs is estimated to be $5,000 a year. Without financial assistance via the REAP program, the return on investment would  take 28 years as opposed to 4 years under the incentives given with the REAP program.

Mr. David Armstrong

President and CEO, Greenstone Farm Credit Services, East Lansing, MI

• Farm Credit utilizes all available program resources that permit credit to be disseminated among the broadest range of producers. The guaranteed loan program of the Farm Services Agency allows credit to be extended to farmers that do not have as much equity as other producers.

• Credit programs need to be evaluated to ensure that they accurately reflect the needs of today’s farmers. It is necessary that caps on loan size be allowed to fluctuate based on inflation in land values.

• Definition of what an eligible farm is should be made flexible to alleviate risk to corporate structures.

Panel III Questions:

1. Chairwoman Stabenow asks about challenges to organic farming.

       Ms. Holt answers.

1. Branding of USDA organic label most important
2. Cost sharing
3. Conversion funding between organic and conventional producers
4. EQIP

2. Senator Roberts asks if the solar panels provided by the REAP program will ever pay for themselves without REAP.

Mr. Reid answers probably if electricity costs rise and households start using more panels so that the cost per panel declines.