Field Hearing of the U.S. Senate Committee on Agriculture, Nutrition and Forestry

Field Hearing of the U.S. Senate Committee on Agriculture, Nutrition and Forestry

Statement for the Record of the
Honorable Thomas J. Vilsack
Governor of Iowa

July 24, 2006

Agricultural policy, as reflected in farm bills every few years, has a profound impact on all citizens in the Midwest and is not restricted to those working on the land. In fact, while the farm bill addresses many issues important to the 3.1 percent of Iowans who farm, the farm bill can legitimately be called Iowa's Water Quality and Rural Development Bill.

The benefits of farm bill programs are reflected in better land stewardship, cleaner water and enhanced recreational and economic opportunities throughout the state. Indeed, the economic benefits of cleaner water are felt in every rural and non-rural community where enhanced recreational opportunities bring direct economic impacts to local economies. Environmental benefits to the farm sector ensure continued productivity. They are also felt far downstream where the decisions made by individual farm operators are reflected in water quality improvements, not only in Iowa, but into the Gulf of Mexico.

Recognizing the importance of the farm bill to our state economically, environmentally and socially, I recommend the following:

1. Rural areas should be empowered to create and/or expand vibrant rural economies and improve their communities.
Farmers and rural communities need to be assisted with the necessary resources to encourage development of home-grown energy in the forms of wind, manure-generated methane, cellulose ethanol, etc.
Opportunities for farmer- and rural community-owned enterprises should be developed and expanded. One way that can be accomplished is by adding value to farm commodities (meats, grain, produce, wood products, etc).
Further, high speed internet access should be available to rural communities and farmers who would not otherwise have access in the near future.
2. The farm bill should enlist the support of a growing number of urban members of Congress and their constituencies.
To do so, the new farm bill should have clearly stated objectives that provide the following benefits not only to the farm community, but to our society:
a. Provide opportunities for entry level farmers;
b. Conserve our soil, improve our water quality and provide wildlife habitat;
c. Decrease our reliance on oil by conserving and developing energy on farmlands;
d. Provide income support that accomplishes the stated goals rather than having unintended consequences such as inflated land values, barriers to beginning farmers and decreased commodity prices. Give consideration to separating income support from production; and
e. Sustain viable rural communities.

The 2002 farm bill contained 10 titles covering a wide array of topics. Any revision of farm policy should include a clearly written set of objectives as the basis for formulating individual programs. Such a set of objectives would also help communicate the significance of agricultural policy and programs to the majority of Americans not closely involved with agriculture or rural issues.

3. Create a program that provides energy conservation and development based on perennial vegetation that also improves water quality, conserves soil and provides wildlife habitat.
Too often, programs focus on single issues and lose the opportunity to maximize public benefits from public funds. Energy and conservation are increasingly important issues to both the farm and urban public. A program that reduces energy inputs while providing energy outputs and other environmental benefits would have widespread support.

4. The new farm bill should include effective commodity support caps and close loopholes to avoid the unintended consequences of the current farm bill.
A study by the Center for Agriculture and Rural Development at Iowa State University indicates that land values are inflated by 30 percent over expected values because of the commodity support payments. Land owners built this into cash rental rates resulting in difficulty for beginning farmers to compete with existing operations. Commodity support levels also encourage overproduction. When this happens, larger farms can exist based on volume of production, but the beginning farmer cannot.

The often quoted statistic that 10 percent of farmers receive 74 percent of the commodity support benefits raises questions and concerns about the purpose and equity of the farm bill. There has been a significant dialogue over this issue and it is likely to be a major point of contention in the upcoming debate.

5. Measures in the bill for conservation compliance should be more rigorously enforced than they are under current practice.

Conservation compliance has been a provision in all farm bills since 1985. The legislation was designed so producers receiving commodity support payments were obligated to meet a conservation standard on land they farmed. This is a win-win situation for both farmers and the public. A workable conservation compliance provision needs to be included in the 2007 farm bill and enforced.

6. Create and enhance green payment programs that support agricultural producers who install practices to protect soil, improve water quality, provide wildlife habitat and conserve or produce energy.

This would be World Trade Organization compliant, and would provide badly needed financial support to U.S. farmers while protecting or improving natural resources for the American public.

7. The 2007 farm bill should target at least one-third of the farm bill budget to the conservation title.
The 2002 farm bill conservation title made significant progress in addressing conservation needs as authorized. However, appropriations seldom met authorized levels. Equity issues with commodity title payments, World Trade Organization concerns, the federal budget deficit and changing public expectations reduced actual appropriations and will again be factors in the next farm bill.
The 2002 farm bill authorized approximately 24 percent of the budget to the conservation title. Allocating one-third of the 2007 budget to the conservation title would represent a
modest reallocation of resources that is realistic in view of the issues identified above. It would also provide the technical assistance so badly needed by agricultural producers to install natural resource protection practices, to adapt to changing energy use and production of energy crops. The conservation title needs to provide flexibility at the state level in implementing programs as well.

There are many instances I could site where we have been able to achieve astounding environmental improvements, particularly in water quality, through the important tools that have been made available through federal farm programs in recent years. Let me highlight just one example that I think is particularly noteworthy.

The extreme northeast region of Iowa offers the unique feature of coldwater springs and streams capable of sustaining trout. Historically, these streams have offered "catch-and-release" opportunities for fishermen. The streams had to be stocked with trout because spawning conditions had degraded over the years.

Full partnerships with area farmers, utilizing many conservation programs available through federal farm policy, have helped create improvements to stream conditions and water quality to the point where we now have documented natural reproduction of trout on 58 different stream segments totaling more than 100 miles. In the 1970s, we were able to document natural trout reproduction on only six stream segments in Iowa.

Success stories like this with our natural resources could not be accomplished in a state like Iowa where more than 90 percent of the land is in private ownership, without the interest and cooperation of willing landowners. Conservation programs through the federal farm legislation are key elements to being able to help both the agricultural community and the citizens of our state by fostering effective stewardship.

In 2005, Iowa led the nation in the production of pork, corn, soybeans and eggs, as well as acres in buffers and restored farmable wetlands. This relatively small Midwest state received the third highest cash receipts in the country for farm commodities - totaling $15.9 billion. With approximately 90 percent of Iowa's land mass in private hands, the 2007 Farm Bill has the capacity to provide the policy guidance and the economic incentive for Iowa farmers to conserve their soil, protect water quality, enhance wildlife habitat and provide for the recreational and economic revitalization of the state. While leading the nation in conservation, Iowa farmers can continue to produce food, fiber and energy.

Likewise, throughout the Midwest, the 2007 Farm Bill can be a force for revitalized rural economies and enhanced water quality reaching all the way to the Gulf Coast. The choice is ours. I ask for your thoughtful consideration and inclusion of the proposed plan of action by the Senate Committee on Agriculture, Nutrition and Forestry.

I close by citing this quote from President Franklin Roosevelt when he was advocating creation of the Soil Conservation Service during the Dust Bowl era of the 1930s: "A nation that destroys its soil destroys itself."

The same observation could be made today relative to water quality and to the social values that continue to make rural America very special national treasures for our country. I urge you and your colleagues to carefully consider these factors in your future discussions on this legislation so vital to the state of Iowa and its citizens.

http://www.governor.state.ia.us/news/2006/july/attachments/060724_Farm_Bill.pdf