July 23, 2012
MODERATOR: Good day, and welcome to today's live broadcast from the USDA radio studios in Washington, D.C., featuring the Secretary of Agriculture, Tom Vilsack. Reporters and members of the media, if you wish to ask the Secretary a question after opening remarks, please press Star/1 on your telephone touchtone pad.
It's now my pleasure to introduce Agriculture Secretary Tom Vilsack.
SECRETARY VILSACK: Good morning to everybody, and thank you very much for spending a few minutes with us this morning.
Last week President Obama asked me to come over to the White House to talk about his concerns surrounding drought conditions throughout the United States. It's obvious that we've had extraordinarily dry conditions through most parts of the United States, and he was deeply concerned, as I am, about its impact on producers, farmers, and ranchers in the country.
We announced a series of steps last week to try to provide some help and assistance, expanding emergency haying and grazing to areas designated as areas under the drought monitor of D2, 3, and 4 counties. We provided some additional relief on repayment of CRP payments for the use of CRP land for haying and grazing. We also lowered the interest rate on emergency loans and created a more streamlined disaster declaration process. We went back following our meeting in the White House, and we challenged our team at USDA with the President's challenge to look at additional steps we could take, given the severity and breadth of this drought. And so today we're announcing those additional steps.
With reference to the CRP program, we're announcing expansion of land that can be used for haying and grazing to include not just D2, 3, and 4 counties but also D0 and D1 counties. In other words, all counties in the country which are currently on the drought monitor as being somewhere between abnormally dry to extremely dry will now be included in the emergency haying and grazing effort. In addition, we will obviously continue to expand and allow for the reduction from 25 percent to 10 percent on the rental payments that would be returned as a result of the use of the land.
And we will also authorize FSA to allow producers to sell harvested hay harvested through the emergency haying only for this year. This will be something that is not ordinary for us to do, but given the breadth and severity of this situation, it may very well be an opportunity for folks to provide help and assistance to their neighbors who are suffering.
The second thing we're announcing today is the utilization of our discretionary authority under the EQIP program at NRCS. We are going to allow certain modifications to current EQIP contracts. Those modifications will allow a rescheduling of practice applications. It could include an extension of the contract expiration deadline for producers. If needed, if the seriousness of the circumstance requires a consolation of the contracts, that will be allowed. If for some reason practices were put in place, but because of the drought they were not successful, I have instructed NRCS and Chief White to look for opportunities to work with farmers to reapply those practices.
We have a limited amount of Fiscal Year 2012 EQIP funds left, so what we're going to do is direct that those funds be focused on the areas hardest hit by drought, those areas that have been designated as D3 and D4 counties. We're going to allow the use of those resources for prescribed grazing, for cover crops, for livestock watering facilities, and improvements to irrigation systems. Recognizing that it may very well be that we have greater demand than the resources will allow, that's why we're focusing our resources primarily on areas specifically in D4 areas, the most serious and most directly impacted by drought, most severely impacted. So the EQIP resources that are left will be directed to those D4 areas with that in mind. We are certainly recommending to producers who have active contracts to contact their local NRCS field office for additional details to determine how those flexibilities might be best used for their operations.
In the Wetlands Reserve Program, we are going to direct NRCS to expedite the Compatible Use Authorization Request for haying and grazing so that we can authorize haying and grazing in WRP easement areas. It will obviously have to be consistent with conservation and habitat needs, but this should provide additional flexibility.
Finally, we have recognized and appreciate that August 15th is the date that is the first date of when crop insurance premiums become due. We know insurance companies have been providing a grace period before interest is assessed on those uncollected premiums, and that grace period is usually somewhere around a 45-day grace period up through September 30th. We're asking in a letter which we're directing to crop insurance companies today to consider expanding and extending that grace period for an additional 30 days to expire on October 31st. The reason for the extension is it gives us additional time and it gives the companies additional time to assess claims and perhaps provide some producers with a bit more flexibility in terms of their ability to pay given the current situation with crops and livestock. We recognize that this is asking insurance companies to do something they're not required to do. We want to partner with the insurance companies. So to the extent that a company will authorize and allow this additional grace period, USDA will not require payment of uncollected premiums during that grace period. In other words, we won't require the insurance companies to pay us something they have not yet received. So, hopefully, between our action and their action, we can provide some degree of assistance and help to producers.
The last thing I want to say is to reiterate the fact that our tools are limited. We are continuing to look at ways in which we can provide help and assistance. The President will be, no doubt, asking other agencies, to the extent they can provide help and assistance, to do so, but really what has to happen is the House of Representatives has to have a vote on the Food, Farm, and Jobs Bill as soon as possible. There is nothing more important to Rural America, nothing more important to the producers, farmers, and ranchers of this country than action on this bill. As everyone knows, action on this bill could very well revive the disaster programs for livestock producers, which expired on September 30th of last year. Those programs, along with assistance under the SURE program, provided 400,000 payments of nearly $4 billion of assistance and help as a result of floods and fires and drought in the past. There is no greater need for this help and assistance than now, and there is no excuse or reason why the House of Representatives cannot take this matter up. I know of nothing more important to Rural America than this bill, providing some degree of predictability. This would also allow us to continue the momentum that has been building in Rural America. American agriculture is far more resilient today than it has been, but it does need certainty in terms of policies, and that's what a Food, Farm, and Jobs Bill provides, a 5-year program that folks can take and understand and make decisions and plans accordingly. There is time, and, no doubt, Congress could find time before they take the August recess.
You know, as I said to a group of farmers here just a minute ago, I don't know of a single farmer who would take a recess if there was work to be done, or a vacation if there was work to be in the field, and I'm sure that Congress, many Members of Congress, feel the same way. Chairman Lucas and Ranking Member Peterson I have no doubt understand the importance of this and calling for immediate action, and I join with them in making that request to House leadership to get the work done so that we can get it into conference and get whatever differences resolved, ironed out.
So, with that, I would be glad to answer questions, if there are any.
MODERATOR: And, reporters and members of the media, this reminder, if you have a question for Agriculture Secretary Tom Vilsack, please press Star/1 on your telephone touchtone pad.
And let's go right to the phone lines. We go to Matt Kaye of the Berns Bureau with our opening question.
Matt, good morning.
QUESTIONER (Berns Bureau): Yeah. Good morning to you. How are you, Mr. Secretary?
SECRETARY VILSACK: Good.
QUESTIONER (Berns Bureau): Yeah. Let me ask you about the – you mentioned the need for the new Farm Bill. Obviously, some of these critical programs have expired. I understand the ELAP program expired last year. The Speaker of the House has told us 2 weeks in a row now that he has not made a decision on bringing up a new Farm Bill, the one that passed the House Ag Committee. Next week may be the last week for this work period before the August recess. If we do not see a Farm Bill, do you expect that these emergency programs that have expired or are expiring would still have a chance to get on an extension, or is it more dangerous to think about an extension because it would have to be done in such a hurry that you may not get these emergency programs on that vehicle?
SECRETARY VILSACK: Well, let's be clear. Extending the current 2008 Farm Bill will not revive the disaster programs. Because they have expired, it would take affirmative action to revive them, to actually pass them again, if you will. Obviously, there are budget implications connected to a continuation or an extension or revival of those disaster programs. That's why it's important, I think, to have it in the context of the overall Food, Farm, and Jobs Bill, because there is obviously greater flexibility in the conversation. An extension of the existing bill won't get the job done, and the concern and the risk that is run as we delay each and every day, the chances become greater that this gets all wrapped up into a much larger conversation that the Congress is likely to have on tax policy and on additional budget cuts, and I fear that Agriculture will be asked to do more than its fair share.
It's already stepping up to the plate. The discussions between the two Ag committees and the Senate bill, obviously there are significant reductions in support that are inherent. We have already passed additional reductions in crop insurance. The deficit reduction, we've seen our budget reduced. So we're doing our fair share, and it's time for the House leadership to step up and get this on the floor, get it voted on, lead that process, as Chairman Lucas led the process through his Ag Committee, and get the job done.
MODERATOR: Agriculture Secretary Tom Vilsack with us this morning. Reporters and members of the media, if you have a question for the Secretary, please press Star/1 on your telephone touchtone pad.
Let's go back to the phone lines, and David Pitt of the Associated Press has the next question.
Good morning, David.
QUESTIONER (Associated Press): Good morning. Mr. Secretary, Thanks for taking time today. Just a couple questions. What are you seeing out there today as you're going about looking at the crops, the severity in Iowa particularly? And, secondly, you said that farmers were resilient today, and part of that is attributable to new crops and the ability to then withstand drought. Do you think we're reaching the limits of the capability right now? And maybe you can talk about that a little bit.
SECRETARY VILSACK: Well, you know, it's somewhat guesswork at this point in time in terms of what the overall yields will be for the country. We really won't have, obviously, exact information until the crop is harvested, but I toured southern Iowa over the weekend, and I saw everything from significant damage to crops that looked in pretty good shape, and that's not unusual for a drought circumstance because an isolated farm here or there might get a decent rain or get rain at the right time or may have planted their crop earlier or later, and as a result, the rains that came may have been sufficient and adequate. Certainly, seed technology and the fact that we've planted 5 million more acres nationally of corn provides us some degree of mitigation but certainly not enough to overcome the impact of this rather severe drought.
Our current estimates obviously will be adjusted from time to time based on current conditions. We're seeing some rain take place in some parts of the country. The projections are from 1 to 3 inches in some parts of the country, which would be very timely. It certainly would be timely for the bean crop in particular.
So what we do know is this. Livestock operators in particular are impacted because what they expected to have to have their livestock graze on is not there or is not of sufficient quantity or quality as anticipated, and the costs to replace it with feed are obviously going to be substantially higher. And so some folks are beginning the process of liquidating their herds, and they know full well at this point in time that there is nothing else that can be done beyond the steps that we've taken to open up more haying and grazing areas.
You know, the sad reality is that Congress needs to do its work to get a disaster program in place to provide help and assistance to these producers. And that in turn over time obviously provides help and assistance to consumers because it allows people to stay in business, it allows us to continue to have vibrancy in a rural economy, to continue to be a food-secure nation, and to provide affordable food to folks.
MODERATOR: And the next question to be asked of Agriculture Secretary Tom Vilsack, that honor belongs to Jerry Hagstrom, of The Hagstrom Report.
Jerry, good day.
QUESTIONER (The Hagstrom Report): Good day. Good morning, Mr. Secretary. As I understand it, the Senate Ag bill includes several of the disaster programs, but it does not include the SURE program, and Senator Conrad and others have introduced a bill that would revive the SURE program with some changes to the payment structure so that the payments would be made more quickly. Do you think that a new Farm Bill does need to include a revived SURE program, perhaps a revised SURE program?
SECRETARY VILSACK: Jerry, I think, you know, it's important. I guess my focus has been primarily on the folks who have no help at all right now, which are the livestock folks. You know, to a certain extent, we're going to have to see what the yields are, we're going to have to see what the losses are. We will obviously work with Congress if that becomes an opportunity, but until the House leadership makes its decision to actually allow for a vote of a Food, Farm, and Jobs Bill or some additional flexibility, all of this talk is somewhat hypothetical.
The key here is getting the House to do its work, and once there is an indication the House is anxious and willing to do its work, then we can have a conversation about what that work needs to be and what that work needs to include, but until we've got that, we can talk about a lot of things, a lot of things we could hope for and wish for, but we need action by the House. And we know for sure that if the House acts, it would provide some degree of assistance to the livestock producers, which is really important.
Then we can take a look and see where we are from a fiscal standpoint, what the cost of a revised SURE program would be, and how practical it is to get help and assistance. Obviously, some producers will be receiving SURE payments this year for damages that occurred last year. Those may be very well much the same producers as are being impacted by the drought this year.
So it's a complicated equation here, but it doesn't make any sense to talk about it until we know the House is serious about doing its work.
MODERATOR: On deck is P.J. Griekspoor of Farm Progress. We'll hear from her momentarily. Actually, let's go to P.J. right now.
P.J., good morning.
QUESTIONER (Farm Progress): Good morning. My question, Mr. Secretary, is I'm in Kansas, which is in our 13th year of this right now, and the CRP land grazing that's available is as dead and as dry as the rest of the State. Is there any hope that we could do something kind of unique like allow farmers in CRP areas that have not been destroyed by drought to hay and ship hay into the drought-stricken areas, let them take a break on not having to give up their entire CRP payment maybe and still let them hay that and move it into the market where people that desperately need it can use it?
SECRETARY VILSACK: Well, I think what we're authorizing today is an extension of where emergency haying and grazing can take place, and we're also announcing today the ability of hay that's harvested in those areas to be sold. So there is a possibility of getting some help and assistance and relief to folks in Kansas or wherever it might be, that they basically have very little access to feed, or the cost of feed is just so prohibitive that they're forced to liquidate their herds. So I think we are announcing that kind of innovative and creative and unique and once-in-a-lifetime kind of thing.
MODERATOR: And our final question of the day belongs to Bill Tomson of Dow Jones.
Bill, good day.
QUESTIONER (Dow Jones): Yeah. Hi. Thanks, Mr. Secretary. I was wondering if you could give us your take on why the House isn't voting on the Farm Bill like the Senate has already done. Thanks.
SECRETARY VILSACK: Bill, I don't think I'm – you know, that's a question that you should direct specifically to the Speaker and the Leader. They obviously have – the Leader, the Majority Leader, indicated he had his finger on the pause button the moment that bill passed through the Senate Ag Committee – or excuse me – is passed through the Senate, and the Speaker has indicated his belief that crop insurance is all that's necessary in terms of drought assistance at this point in time. You know, it leaves out all of the livestock producers in the country, which is literally hundreds of thousands of people. So I don't know what the motivation is, what the decision-making is. All I can tell you is that there is no more serious work to be done in the House of Representatives between now and the August recess or for that matter during the August recess or for that matter after the August recess for Rural America, for farmers, producers, and ranchers who are struggling in getting a Food, Farm, and Jobs Bill through the process, providing some degree of assistance and help during this very, very difficult time. And whatever the reasons are, you know, they aren't good enough to justify delay on what has passed through the Senate and what has passed through the House Ag Committee in a bipartisan way with bipartisan leadership.
MODERATOR: Reporters and members of the media, thank you for your questions today and for all of you listening in to today's broadcast.
Mr. Secretary, do you have any closing thoughts?
[No audible response.]
MODERATOR: And, apparently, we will end today's broadcast.
Mr. Secretary, thank you very much.
And this Rod Bain, from the USDA Radio Studios in Washington, D.C., wishing you all a great day.