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TRANSCRIPT OF TELE-NEWS CONFERENCE WITH AGRICULTURE SECRETARY MIKE JOHANNS REGARDING LEGISLATION TO IMPLEMENT THE ADMINISTRATION'S FARM BILL PROPOSALS
Washington D.C. - April 25, 2007
SECRETARY JOHANNS: Good afternoon to you. Thank you for joining us on the call today. I do want to bring you up to date on some developments with our Farm Bill proposals as we move forward. It was just a couple of weeks ago that I talked publicly that we had been drafting legislative language for our Farm Bill proposals here at the USDA. This came about because as we conducted briefings on Capitol Hill with committees and subcommittees, I talked to individual members, and we found that we were being asked quite often whether we planned to put our proposals into legislative language.
I am encouraged by the interest being expressed in our proposals, so we did not hesitate to respond to the request. We went to work drafting the legislative language that would be the actual implementing language to the proposals. Today I'm pleased to report that we've delivered the first two legislative drafts to the Hill and that would be our Conservation Title and our Credit Title.
Chairman Harkin and others requested that we put our conservation proposal into legislative language. We also received several requests to do so with our credit proposals. I'm very enthusiastic about both titles, and for that matter really all of our proposals. The Conservation title calls for $7.8 billion in additional funding and a restructuring of our programs to make them easier to access and easier to administer. The language reflects our belief that the Conservation Reserve Program should continue to be the cornerstone of our conservation efforts.
We would consolidate several existing programs into a newly designed and expanded Environmental Quality Incentives Program, or we call it EQIP -- and increase funding for that by $4.25 billion. This includes a new Regional Water Enhancement Program that will focus on programs to enhance water quality on a regional scale. The Conservation Security Program is strengthened, and we infuse an additional $500 million in CSP to expand the number of acres enrolled, and this is a significant expansion from 15 million acres to 96 million acres over the next 10 years.
We also expand the Wetlands Reserve Program, raising the enrollment cap from 2.3 million acres to 3.5 million acres. And we are proposing a sod-saver provision to discourage conversion of grassland into cropland.
The credit title is where we have many of our programs to help beginning and socially disadvantaged farmers get their start to build up their operations. We proposed changing the rules on our loan program so we can help more beginning farmers buy land and obtain operating loans. We would cut the interest rate literally in half, defer the first payment for a year, increase the maximum loan value, and increase the size of both the direct ownership and the direct operating loans. We would also help beginning and minority farmers buy their first spread by giving them first priority for all direct farm ownership loans.
So these are very important titles, and important parts of our overall proposal.
Now in keeping with our commitment to being transparent throughout this Farm Bill process, we are posting both legislative drafts on our website at USDA.GOV. We are also drafting the legislative language that would implement the rest of the 2007 Farm Bill proposals.
As they are completed, they will be delivered to the Agriculture Committee chairs and ranking members, and of course posted on the website, so they will be available for everyone to review.
We hope these very detailed legislative drafts of our proposals will prove helpful to Congress as the 2007 Farm Bill takes shape. It has been a long time since USDA was this involved in the process of framing a new Farm Bill. We're very pleased to have the opportunity to contribute and to be helpful to Capitol Hill. I anticipate sometime next week we'll deliver to the Hill the legislative language to implement our Energy and our Rural Development titles. While I don't anticipate making public announcements regarding every future submission of legislative language, the drafts will be posted on our website once they are delivered to the Hill.
And as there are significant issues, we will not hesitate to invite people to join us in a call like this.
We hope these will be helpful, as I said to Congress and to the agricultural community, as the process continues to move forward.
Let me just wrap up with a quick thought, and then I will be happy to take questions. I do want to stress how much we appreciate the interest in our proposals. That has been expressed on the Hill and really for that matter across the country. I've really welcomed the opportunities we've had to testify and provide briefings on our proposals, and I look forward to continuing to work with Congress as the 2007 Farm Bill takes shape.
Again, thank you for joining me on the call, and if there are some questions I would be happy to take those questions.
MODERATOR: Reporters, I remind you as we prepare to take your questions that you should press *1 on your telephone touchpad to indicate that you have a question. And our first question today comes from Larry Dreiling of the High Plains Journal. Larry, go ahead, please.
REPORTER: Thank you, Larry, and thank you, Mr. Secretary, for your time. I had a question on what you said about EQIP expansion or consolidation or strengthening. What programs are going to be taken into a brand new EQIP, if you please?
SEC. JOHANNS: I think I will be able to detail those programs for you that we'll include in that, but basically the idea behind this came again from our Farm Bill Forums. We had farmers and stakeholders that said, we really like these programs, we like what you do with your conservation programs, but they kind of offered two themes that really were somewhat consistent, fairly consistent. The first theme was, "These are awfully complicated programs, I oftentimes don't understand whether I qualify for this program or that program; is there something you can do to simplify that?"
The other thing they said is, "If you can find additional money, we would certainly appreciate that."
Now what I am going to do for you in terms of the actual programs that are included in this, I'm not putting my finger on it right at the moment, but I will promise you that we'll fax that out to you, and anyone else who has an interest so folks can see what programs are included in that consolidation effort.
MODERATOR: Our next question comes from Dan Looker of Successful Farming Magazine. And standing by should be Jeff Nalley. Dan, go ahead, please.
REPORTER: Thank you very much, Mr. Secretary. I'm sure you've gone over this a little bit before, but could you refresh my memory on where the money would come from to fund the increases in spending on conservation programs?
SEC. JOHANNS: We worked with the Office of Management and Budget on the numbers that we had available at the time that we put our proposals together. Here's how they score this. They scored it as $5 billion over the baseline. However, they also made sure that it fit within the President's overall plan to balance the budget within the next five years.
So we got a little leeway on the baseline, but we had to square this in such a way that it would fit with the President's plan and it did. When the President's budget was released, we fit within the overall plan.
There's a number of things that we have done differently. Let me give you some quick examples, if I might, just to kind of indicate how we're delivering what I believe to be a very strong Farm Bill, a very strong safety net, but doing some things to manage it better. I'll give you one example.
When Hurricane Katrina struck, we had a fairly temporary interruption in transportation down the Mississippi because of the damage done at the port, at the Gulf Port, New Orleans Port. I think everybody knew that was going to be temporary. It was going to last about as long as it took to get any barges out of the way, or anything that had sunk during that hurricane. But during that period of time, the corn price went down just again to give you an example of one commodity. It went from about, oh, two bucks a bushel to I don't know, $1.60 a bushel, $1.65, depended where you were at. What happened at that point is, no one sold corn to speak of at least because they anticipated the price would come up, and of course they were right about that. But they locked in their loan deficiency payment, and so we were paying corn LDPs at 40 cents a bushel, 45 cents a bushel, 50 cents a bushel. It cost a number of billions of dollars.
Now I don't think anyone intended a safety net that was a pick-your-time. This was absolutely appropriate, absolutely legal, but again I don't think it fit within the congressional intention to provide a safety net because there really wasn't a loss there. It was just a temporary downside on price.
And so what we headed out to do is to make some changes to deal with that sort of issue. So there's a number of things we did in the commodity title that make it run better, still a very, very strong safety net. There's some things we did under insurance. And so all of that kind of pieced together, allowed us to deliver a Farm Bill that invested in priorities, still provided a strong safety net, and still fit within the President's plan to balance the budget.
Now if I might, Larry, before you go to the next question, somebody asked me about the programs. I'm now able to tell you which programs. We would consolidate Environmental Quality Incentives Program, Wildlife Habitat Incentives Program, Agricultural Management Assistance Program, Forestland Enhancement Program, Ground and Surface water Conservation Program, and the Klamath Basin Program. Again, we'll continue to do those things, but we're going to streamline it into a more understandable situation because for every program there's regulations, for every program there's applications, for every program therefore we burn up a lot of administrative cost just getting the program dollars out the door.
So this allows us to do some things that I think will respond to what we heard out there, and just deliver the programs more efficiently.
MODERATOR: Once again we want to remind reporters that if you'd like to ask a question please press *1 on your telephone touchpad so that we can call on you And our next question comes from Jeff Nalley. Jeff?
REPORTER: Mr. Secretary, good afternoon, and thanks for receiving our call. On the revenue assurance side of the commodity title, the Corn Growers Association is looking at a county level, the American Farm Bureau Federation this week is talking about a state level, yet at the last look the USDA plan was on a national level per commodity. Why is the national the best way to go, and is that from an effectiveness standpoint for farmers, or more from the budget standpoint?
SEC. JOHANNS: Jeff, thanks for the question. First let me say in response to the Corn Growers' proposal and now the Farm Bureau has entered the arena with a revenue-based proposal to countercyclical, we really appreciate both groups thinking outside the box. We appreciate them really taking a look at the revenue approach because farmers were telling us they thought this was a much better approach, and we believe it is.
Here's what I would tell you, Jeff. What it comes down to is, what do we have in terms of numbers available that we can make an assessment as to when this revenue countercyclical would kick in? We know on the national level we have good numbers. On the state level, that's something I want to dig into here. Is this something that could be done at the state level: Does it make sense, or does it not? And I'm more than willing to do that, haven't had a chance to do that because I only received this approach within the last 24 hours. But I promise we'll give it a fair look as we have other ideas.
You get down to the county level and again the numbers that you would need become a lot more iffy. And so literally I would worry about whether we have county numbers available in enough areas in the country where you could respond to a county-based revenue-based countercyclical program. So the county level is a little worrisome for me. State level we'll take a look at. Federal level we know we can deliver the program because we have good numbers at the national level. So that's really what drove it more than budget. It's just we want to make sure it's a good program and we can administer it well.
MODERATOR: I'm going to make a final call for questions. Anyone who has a question should please press *1 right now so that we can recognize you. Any thoughts that you might want to add while we are waiting to see if we have anymore questions, sir?
SEC. JOHANNS: The only thoughts I would offer is that again we have really appreciated the opportunity to work on this, starting out with the Farm Bill Forums which were just a great experience. This has been a great process. We'll continue to deliver our efforts here in a very, very public and transparent way as we go forward.
MODERATOR: I do have a couple of questions that have popped up here. Chuck Abbott from Reuters. Chuck, would you go ahead with your question, please?
REPORTER: Thank you. Mr. Secretary, what do you think about the idea of shifting money from, say, different direct payments into uses such as land stewardship?
SEC. JOHANNS: I noticed Senator Harkin talked publicly about that recently, and Chuck here's what I would offer. Somewhere in all of this you try to find the right balance between a payment that is really more of a direct subsidy, which a direct payment is, and something that is a conservation oriented, we-will-pay-you-money-if-you-do-certain-conservation-things.
We thought we had a pretty good balance. But again I haven't seen the specifics of the senator's comments. He's a thoughtful guy; he's a supporter of conservation programs, a supporter of agriculture, so I'm kind of anxious to see a little more flesh on the bone. But somewhere out there he'll come out with his ideas on what that should look like. We'll take a look at it. I'm not sure if it's something that in the end we will reach agreement on, but I'm anxious to see what he has in mind because maybe it strikes that balance that we try to achieve.
But I do think there has to be a balance between our programs that really have been more of a traditional subsidy and those programs that move more in an area of conservation enhancement. But very anxious to see what he has in mind. I did pick up those comments like obviously you did. So I'm anxious to see what he's thinking about.
MODERATOR: And our next question comes from Alison Winter. She is with the Environment and Energy Daily. Alison?
REPORTER: -- with the consolidation of the environment programs, how would you still keep them in the mission of the smaller programs?
SEC. JOHANNS: It's a great question, Alison. We are absolutely committed to the mission of these programs. These programs came about as I'm sure you are aware because there was a feeling that maybe another program wasn't doing enough for forestland or grazing land, and so a new program got developed. We don't want to lose that touch. We don't want to lose the ability to deliver dollars into those areas. What we do want to shed if we can is the huge complexity.
You can have a landowner out there that maybe qualifies for a program, and is trying to figure out, which one do I qualify for? And again I point out to you, for a landowner it can be really, really confusing. You can have not only the separate program, but the separate application, the separate regulation, the separate ins and outs of when you qualify and don't qualify. I think you can deliver all of this with a consolidated approach and still identify that your mission is going to be to continue to target all the areas that were the reason for these programs to get passed.
So that's kind of the thinking. We don't want to lose that personal touch with each of these areas, but we do want to lose some of the bureaucracy that has been created in delivering the dollars to the people who are going to do the conservation.
MODERATOR: Thank you, reporters and broadcasters, for your participation today. Secretary of Agriculture Mike Johanns. Larry Quinn bidding you a good day from Washington.