Transcripts For CSPAN3 Senate Agriculture Hearing On Global Markets Agriculture Sector 20240714

This hearing of the Senate Agriculture committee. Its about an hour and 45 minutes. Morning. I call this meeting of the Senate Committee on agriculture under order. We are happy to have you back here again before the committee to discuss the need for certainty in our Global Agriculture markets. International trade policies and their impacts on the United States agriculture economy has been a topic of great interest over the last few years and more particularly the last few months. In fact, this is the second time in the last year that we are hearing about the efforts being made at the office of the United States trade representative and the department of agriculture, efforts that i hope will eventually result in longterm reliable markets for the United States agriculture. A great deal has happened in the nine months since you all appeared before this committee. Perhaps the most significant to our members was the successful package and enactment of the 2018 farm bill with the help of everybody here. Much like negotiations with International Trading partners the path to a final farm bill agreement is not easy. There are many challenges and differences to overcome, and the final bill had to bring together members of both the house and senate who related incredibly diverse populations and regions of agriculture. But ultimately with the support of my partner and the Ranking Member and other members of this committee, we persevered and accomplished a strong bill with bipartisan support. A bill that provides certainty and predictability to farmers, ranchers and growers across the country including to strengthen an increased investment in our agriculture export programs. And i know the usdr and usda have also been very busy since we were last together. The administration has been moving the United Statesmexicocanada agreement through the process, recently the section 332 tariffs on mexico and canada were lifted. And producers look forward to congress progressing with the consideration of the usmca. Indition there have been positive outcomes for the United States at the World Trade Organization and on china on trade for grains as well as the restoration of full access of United States beef into japan. There are many good examples of the work you both have been doing on behalf of u. S. Agriculture around the world, and the committee looks forward to hearing about your continued efforts to eliminate trade barriers and grow Market Access for our products. We simply have to get that done. However, these positive steps cannot truly be felt by our producers until certainty and predictability is achieved in our Global Markets. Everyone around this table understands what our producers are facic back home. On top of the already low prices for our crops, producers are working through floods, tornados and of course challenges of retaliatory tariffs. I was in kansas at the northeast part of kansas and id never seen the Missouri River from 8 to 11 miles wide. It looked like the caspian sea, although ive never seen the caspian sea, but i think thats probably what it looked like. Unbelievable. Fortunately the farm bill is in place to ease some of the uncertainty felt in farm country. However, i continue to be very concerned about the overall impacts like everybody on the committee. U. S. Agriculture, as a result of the use of tariffs as a policy tool. An agreement with the United States and china is a critical piece of that certainty. It is time for both countries to remain at the table and reach the best possible deal. And i know youve been working overtime on that. In fact, theres a great deal of potential around the world for u. S. Agriculture. It appears from your testimonies that each agency is engaged on negotiations with japan. So please share your outlook on achieving a strong and timely Agriculture Agreement there. There is much to gain from a strong agreement with japan which they currently face a significant disadvantage to tpp countries such as australia and canada. It is time to look forward to the future of an update of activities are certainly appropriate today and i also hope to hear about the future of u. S. Agriculture trade policy. This includes not just restoring certainty to our markets but that the u. S. Either had through negotiated agreements or as a traditional competitive supply. But what will be done to improve access in those same markets and broaden them to others . The question is what is being done today that will enable us to be a reliable supplier again . Around the world and around the world today and tomorrow, how can we continue to strengthen trading relationships to establish while also building new opportunities around the world . Ambassador dowd under secretary mckinney and dr. Johansson thank you all for your work on behalf of the United States agriculture. I look forward to your thoughts regarding not only what has been done but what will be done on behalf of american agriculture. I recognize now the dwiged senator from michigan. Thank you, mr. Chairman, for holding this really important hearing. And ambassador dowd, welcome back to the committee. We appreciate your efforts and appreciate you being here today. It wasnt that exactly one year ago that we sat around the table and passed our bipartisan farm bill in the senate in order to provide certainty and predictability for our farmers and ranchers. However, today that certainty is being undermined by this administrations chaotic and unp unpredictable trade agenda despite your best efforts. And i would underscore that because i know each of you is working hard. But the reality is we have chaos and unpredictability going on right now, and its no secret its a very challenging time for American Farmers. Low prices, poor Market Conditions continue to plague our agriculture economy. Extreme weather events from tornados to bomb cyclones. We have new terms happening all the time because of the intensity of whats happening in the weather. Theyre damaging crops and livestock, unseasonably cool and Rainy Weather has made it next to impossible for farmers from michigan and across the midwest to get their seeds in the ground for the upcoming crop year. Facing great unknown has always been part of life for farmers and ranchers. However, right now we really are in uncharted territory. In the past agriculture exports have been a bright spot for the economy, supporting more than 1 million american jobs including 22,000 jobs in michigan. Unfortunately the administrations reckless approach to trade has taken a toll on our ability to export Agricultural Products. Michigan lost 230 dairy farms last year, the highest percentage of any state. In past in part because Dairy Products suddenly faced retaliatory tariffs in some of of our most important export markets. Michigans dry bean industry lost customers in european markets due to tariffs. While buyers in mexico are looking for sellers elsewhere because they now view the United States as an unreliable supplier. Michigans tart cherry industry simultaneously has dealt with unfair imports from turkey and tariffs from china. Meanwhile the Administration Says our cherry growers have not suffered sufficient trade damage. In addition to the very real impacts we are seeing today i am concerned there will also be long lasting harm. Farmers have already spent nearly 1 billion of their own money over the past two decades to establish Chinese Markets that are now gone and may be impossible. A shortterm trade disruption can create permanent loss for farmers. We know that. That happened during the nixon administrations ban on soybean exports which chairman roberts witnessed firsthand as a congressional staffer just a few years ago. The usda recently decided to announce a second round of trade assistance that if anything i believe is adding to the confusion and uncertainty for farmers. While i understand the desire to help farmers weather the administrations trade agenda the proposed aid is creating more questions than answers. I have strong concern these payments wont be distributed despite between regions and crops. The timing of the announcement combined with swied spread prevented planting decisions could make our farm economy even worse. Additionally the administrations actions are certainly an unprecedented use of the commodity credit corporations funds which are not guaranteed and that raises some questions with congress. Also its outrageous that Foreign Companies are profiting from assistance thats supposed to be for our farmers. After a Brazilian Company received billions in taxpayer dollars we recently learned aid and going to a Japanese Company with a troubling criminal history of corruption and bribery. The usda needs to immediately take action from purchases benefitting. And we need to hold countries accountable when they break the rules. This administrations strategy on trade has been to throw everything against the wall and hope something sticks. Meanwhile farmers, businesses and consumers are being hurt. Ultimately our farmers want trade not aid. We all know that. They want to build markets not burn bridges. And they want a thoughtful strategy they can trust not haphazard proposals announced by tweet. This uncertainty has gone on long enough, so ambassador dowd under secretary mckinney and dr. Johansson you were before the committee to discuss this same topic nine months ago. And despite what im sure are your best efforts our situation has only gotten worse. So i look forward to your discussion today on how we can change course and give farmers the markets and the certainty that they deserve. Thank you, mr. Chairman. We want to welcome to our panel of witnesses before the committee this morning. Our first witness is ambassador greg dowd who serves as our chief agriculture negotiator. Greg was raised on a farm, graduated from kansas city university. From his time working on markets and later on the cattlemans beef association, he certainly has an understanding of the importance on the trade impact on agriculture. During my time as Ranking Member when the chair person to my right was the chair person obviously and we passed a bill pretty quickly but it hit a brick wall over there on the house. That seems to be the case with a lot of things. With the ambassadors experience Global Agriculture trade, i really want to emphasize i am really glad to have him representing the voices of u. S. Farmers and ranchers in his current goal at ustr. So we welcome you back, ambassador dowd. I dont know anybody whos been working harder to restore markets and our reputation as a supplier. And secretary mckinney formally served as the director of indiana state and department of agriculture, but for 19 years and director of corporate global affairs. Under secretary mckinney hills from tipton, indiana, graduated Purdue University in agriculture economics. Welcome back mr. Under secretary. Good to have you here. I look forward to your testimony. The doctor is here to answer questions. Hes not a participating witness, but we thought wed have him come and thank you for taking the time to do that, doctor. He serves as the chief economist for the u. S. Department of agriculture. As chief economist hes responsible for the forecast and projections as well as guiding the secretary on the economic implications of alternative programs, regulations and legislative proposal. I think has something to do with the mitigation payments as well. Dr. Johansson received his bachelor of arts and economics at the university of minnesota. Welcome and thank you for being here today dr. Johansson. Chairman roberts, Ranking Member and other dwegsed Committee Members i want to thank you for the opportunity to testify today on President Trumps agriculture trade policy agenda. Ambassador lighthizer and my colleagues have been working around the clock. I look forward to highlighting our efforts in multiple areas. The United States is the Worlds Largest exporter and importer of food and agriculture products. U. S. Agriculture has posted an annual trade surplus well over 50 years. Overall u. S. Farmers and ranchers export more than 20 of what they produce. In 2018 agriculture exports reached nearly 145 billion, an increase of 1. 4 over 2017. Every day this administration and the men and women at ustr and usda work to expand markets for agriculture. Whether its pork to south america, grains and hort culture to asia, dairy to chile, the list goes on and on. Let me focus my remarks, however, on major trade initiatives with this administration. First passage of the usmca is an absolute passage is a necessity for agriculture. Since 1994, our agriculture exports to canada have increased 289 and mexico, 311 in congressture creating our first and second largest markets creating 148 billion in total ag exports last year. Usmca created new Market Access for dairy, poultry and eggs into canada above and beyond nafta and what was negotiated in ptp it allows producers to build on the 19 billion to mexico in 2018. There are many other improvements of usmca over nafta including biotechnology and new technology such as gene editing. Procedural safeguards for recognition of new geographical locations and commitment that british colombia eliminates its discriminatory treatment of wine and grocery stores. It cannot be overstated for u. S. Agriculture due to the size of canadian and mexican markets for u. S. Ag exports. A number of negotiations have been done with china since President Trump and president xi met in buenos aires on november the 30th and have negotiated in good faith since then twice delaying the tariff rates due to progress in trade talks. However, because china backtracked during the course of these negotiations including on agricultural issues, President Trump directed ustr to increase 200 billion on chinese imports from 20 to 10 on may 10th. The Trump Administration is committed to reaching meaningful commitments to resolve structure issues and improving trade between our two countries. I can say an important part of negotiations is to resolve trade barriers to u. S. Ag exports. I hope the u. S. Will make actual verifiable and enforceable results. If we are able to have an acceptable agreement President Trump expects substantial and immediate purchases of u. S. Ag products as well as the removal of technical and regulatory barriers that impede such purchases. With respect to japan in 2018 the u. S. Exported 13 billion in ag goods to japan. The president and ambassador lighthouser and i understand the emergency to advance with japan as soon as possible for agriculture. We have negotiated our trade agreements with the eu upon its exit from the eu. And they act alone and have trade concerns that negatively impact u. S. Jobs. They have concerns countries are failing to notify their agricultural export supports and we have our own for support and are holding countries accountable for their excessive trade. We litigated on a major trade dispute to wto on chinas export transport for grains and we won. A cornerstone is to adopt the trading partners to transparent predictable methods based on science. We are working on in the wto codex and several likeminded countries to advance these objectives. Thank you. I look forward to working with the committee to advance the president s trade policy agenda and im happy to answer any questions. Thank you, ambassador, secretary kenny. Chairman roberts and distinguished members. Thank you for the invitation to be here with greg doud. I want to thank you for your work in the 2014 farm bill that created the opportunity for this position. I hope were honoring the position you and so many had. Maybe 300,000 miles might be one indication. As secretary of agricultural i represent the farmers opportunity to export across the globe under fair reciprocal trade. As we work to lel that Playing Field we are working on programs you helped create through the 2018 farm bill and those before it partnering with the ag associations cooperate trade groups and small medium sized businesses. We want to share the costs and build commercial export markets for u. S. Agriculture. The return on the taxpayer dollar is at minimum, 28 to one in return. We can give you more detail on that and proud to do so. A word about usmca. It is the top pry ord for all u. S. Administration as agriculture. Yesterday or the day before yesterday a letter came out for 1,000 agriculture farm, trade, Association Groups that noted their support for usmca. I suspect you have all seen that. It was incredible. Usmca does, as gregg said allow for markets into canada and eliminates discriminatory grading of u. S. Wheat. Theres a modernized chapter on esp issues that could be brand new, the first language on bioscience and technologies to be used with other negotiations. Mexico has of theed not to restrict Market Accesses for u. S. Cheeses, very important. We hope there will be elimination of retail u. S. Wine and spirits in the province of british columbia. We encourage its passage. A bit about china. President trump has no doubt taken a tough but we believe necessary step or steps to confront chinas unfair trade practices. There are challenges. We see that and have lived it and hear from our u. S. Farmers and ranchers theyre willing to take that pain for return on gain in terms of long term benefits. A bit about support of farmers. The administration is committed to our farmers. One example is president President Trumps response and my colleague, rob johansen here to allow agriculture producers some income while the administration continues to work on free, fair and reciprocal trade deals. Apt orring a trade promotion 2 is working on that to maintain new market exports. Happy to talk about that. My challenge, i embrace the secretary charged to be unapologetic around the world. I hope im doing that. My most Important Role is building important relationships with farmers, buyers, ranchers, here and abroad and so many others that results in facilitating trust, understanding and progress. I think we are making head way. I just returned from an ag trade commission in columbia last week. Thanks to you and others with the pretrade agreement all is going well there. There are always issues addressed but we are seeing the returns from those kinds of deals. Before nag service represents a group across the world in collaboration with usdr and commerce and others, we are working hard. I would add Ag Trade Missions like last week are working on exports. Happy to address that. I encourage you to reach out or remind your state departments of ag we have terrific problems, Ag Trade Missions. Numerous numerous food shows around the world, we facilitate those, and we have a freight deal of interest from most of your states but not all of them. To the degree you want to encourage them, we are always always there. We completed this year already two Ag Trade Missions, taiwan and columbia, and we have five more. That will be a record high in the history of the foreign ag service, 7 last year, 6 last year and 23 prior. Ones we worked on this year include canada, vietnam, japan, ghana and mexico. That doesnt include the oneonones well go to. I want to thank you for what youve done in the farm bill that allows for so many programs that create Market Access program, task, a bit underutilized and emp, also a bit underutilized. Were working on that because theyre fully operational and very helpful. You know the value of these programs to u. S. Ag. You know were with you. Mr. Chairman, this concludes my statement. Thank you very much. Thank you very much. Ambassador dowd doud, lets start right off. Ustr is working hard, i know you have. You have been keeping me apprised finalizing usmca for congressional approval. We must do this. I know negotiations with japan are under way as well. I think the worry we have is were trailing behind our competitors now that the comprehensive and Progress Partnership known and cptt, adding two more letters to tpp and adding blocks to the european union. My question is Going Forward how will the ustr insure the United States is on the proverbial level Playing Field with countries that have already forged strong argument agreements, done. Most especially countries like australia and canada, please. Many chairman, thank you for your question. Youre exactly right the strategy is usmca, china and japan and we have other places to go. With regards to usmca the best thing we can do is pass this through congress. There isnt anything in congress that isnt better or the same as before. We need to get that job done. Mr. Chairman, we have spent hour and hours with china. My counterpart has been there on many occasions in an historic discussion. The way i had that conversation with them, last year, you imported 124 billion in Agricultural Products. That compares to our 125. Chinas imports are 124. In a good year weve only done 20 of that. Ive made the point repeatedly, 20 out of 124, given our capacity to export Agricultural Products around the world isnt going to get it done. You look down the list, we havent sold them a pound of poultry since 2015. We were blocked in beef since 2003. Theyre importing well over a billion dollars a month in beef, pork and poultry. In the month of april, our share was 36 million. That isnt retaliatory tariffs, we dont have access because of these structural and nontariff trade barriers. With japan, we are actively talking with them. When i was in beijing two months ago, senator shelby, talking about fentanyl and china cleaned that up, but we were also talking about trade and i called you and said i was talking to your counterpart, the tall one and the shorter one who does argument. Theyre most familiar with you. They want to trade with us. Thats what they indicated. They want to be trading with a reliable supplier with the best quality of food in the world. Yet here we are in a situation that can be reconciled from 2017 to 2018, the value of exports to china decreased, despite all your efforts, 53 persistent from 19. 5 billion to 19. 2 billion. For nearly a decades, china has ranked either first or seconds in export destination for our ag products but in 2018 it fell to fourth. I guess my question is i dont guess, my question is when negotiations with china conclude with strong enforceable framework for agriculture, what is the future strategy to insure the u. S. Is able to regain the market share lost as a result of the current trade situation. Senator, the answer to that is we have to fix these structural issues. The document we worked on and we argued over every sentence is sizable. We also have to diversify our portfolio. We have one of the great Public Servants of all time, sharon and the spokesman from afs, they worked overtime and we have third place this is an expanded exports around the world. This is an all 24 hour a day effort to expand in every place we can possibly find, including these conversations with japan. Undersecretary mckinney, as you well know, ag trade is critical in todays farm economy. I would say to my colleagues, i ask for your deference here just to ask at least one question of the undersecretary, i know im over time. It creates jobs for much needed demand for the crops farmers produce. At the same time, the Global Marketplace is becoming more competitive in light of todays trade environment. How would the u. S. Help this in a matter to retain current market share to translation markets export markets in addition to increasing markets to new and existing markets . Yes. Thank you for your question, mr. Chairman. First, i would say we are fully aligned with the three priorities ambassador doud laid out. The u. S. Was involved in all 21, trips to beijing, them to here and digital video conferences and happy to provide at any one time in the room we were 21 because we had the depths and always glad to supported team ustr. Getting it first is our First Priority and think weve lived up to that. I hope were fulfilling opening new markets, hence the trips were taking, the last to columbia and thats my third trip there. We are pursuing new markets to develop new markets and diversify the portfolio. To be sure, there are choppy waters where theres a gap. I dont want deny that. Were setting the stage with the support of ustr and others so we can look back in hopefully a few years and be glad we diversified the portfolio. Thats what were doing. Team ustr and our team separately set up a list of countries we want go to. We are going through that list starting last year and we want to sustain that. Thank you for that. I know it may take a few years. 2019 has been tough and i dont know how long this goes on, 7 years with low prices. I understand the previous bar there was high prices. Some farmers arent going to make it. Thats the rub of it. Sharon stabenow. Thank you, mr. Chairman. I agree with you. I appreciate the reaching out i was in south korea and vietnam and in conversations with trade officials there are openings and opening to blueberries right now which would include michigan blueberries i was very glad to have conversations about. Certainly, there is more to do but as the chairman was indicating we are in a very very difficult situation right now. Therenized to be economic certainty for farmers right now. Id like to start and dr. Johansson, i want to speak to you about fair trade payments and im very concerned theyre not equitable to producers. It seems like there could be wide disparities between counties and even farmers and neighboring counties that grow the same crop could receive wildly Different Levels of support. It also seems that farmers that experience flooding would be disadvantaged relative to a neighbor who was able to plant since the Program Requires a crop to be planted. Most of all, im concerned about the disparity between crops. You are no longer making payments based on retaliatory tariffs. Can you clarify what specific problem the usca is trying to solve . Is it mitigation of trade damage, low prices or both . Thank you, congresswoman stabenow. Those are really great questions. As you noted, producerser are looking for certainty right now during a period of uncertainty for a number of reasons, some weather related, and as weve heard, moving forward with beneficial trade agreements and trying to get those across the line will also provide stoernt our producers. Regarding the second round of Market Program payments we put out a press release a couple months ago that did answer some of those questions. The rule at office and budget management right now as part of the interagency process, im somewhat limited how much details i can go in but i will certainly try to provide an answer to some of your questions and those we dont answer perhaps we can get back to you in writing on once were a little more open to provide those. I guess the main difference between last Years Program and this Years Program, i would characterize as the timing of the program. Last Years Program, we were able to pay for actual production and, of course, producers that suffered loss last year were unhappy with that. Components of the program. We wanted to point towards Crop Insurance as the safety net for losses in cured last year. This Years Program was being developed and we wanted to make it clear to producers they shouldnt look at news media stories and what universities were saying about hypothetical payments and have that incentivize producers to change their Planning Decisions. Weve been very clear it is agnostic to the row planting of the program such that producers wouldnt expect to receive for example last years payment for soybean was larger than the program and this year they may be incentivized to plant for soybeans expecting to get a larger payment. We didnt want that to occur, particularly when were sitting on record levels of soybean stocks in the country side. We wanted to make the program again not market the starting to the extent we could and thats why we developed a county level approach for providing payments, producer in a county can received the county rate multiplied by acres planted of crops of the portion of the row crop payment system. Now, of course, we have others payments for producers of some specialty crops. Last Years Program there was sweet cherries and almonds that were in msp component and a lot of the other specialty crops were in the Food Purchasing distribution program. The secretary asked us to look back at last Years Program and try and learn from that and determine what worked and what didnt work from last Years Program. One of the things we felt appropriate to move the especially cropped commodities and food program. I will jump in, in the interest of timing and say on that particular point, on the Market Facilitation Program, some row crops had prices now moving into that. I want to say specialty crops like michigan asparagus that had a 20 price decline compared to last year, due to trade challenges other than tariffs may not even be eligible for purchases. There is still great concern i have about disparities, and as far as im concerned, when we look at listening to you talk about, despite best efforts not to distort the marketplace we passed a farm bill based on the commodity title, based on Risk Management and now it seems to me the whole thing is being thrown up in the air by payments that have nothing to do with what we put together in the fiveyear farm bill. Not just one year but going for a second round of payments. I want to ask one quick question, i know im out of time, mr. Chairman, it goes to the money behind this, i want to ask our undersecretary mckinney, youre one of the seven Board Members of the Usda Commodity Credit Corporation using 30 million of borrowing power to pay for this. And right now the scc has 74 billion left before it reaches the 30 billion. How are you going to pay for 16 billion in assistance and are you assuming congress is going to authorize the additional amount . The ccc has to get replenished, to your point. We do have that amount. The view was, as we heard from many people starting the president s secretary, and other constituencies, theres help needed now. We will take what we have and use that. As we have to do every year or periodically, come back to congress because thats the way that works. But does that mean, mr. Undersecretary you are going to commit 7. 7 billion now and wait for the rest or youre going to commit 16 billion and hope we appropriate it . Right now, that rule is at omb and we are working through that together. There is not an answer now. We would not premium anything if you all have not authorized that. I would certainly say looking at key appropriators across from me it was not within the purview to be obligating funds not available. I dont think funds have been obligated not there. We respect the role of the congress, absolutely. Thank you, mr. Chairman. Senator fischer thank you, mr. Doud. I would like to follow up with the comments at this hearing about china and japan. As you know, im a family rancher. I know first hand we have to improve on the efficiency of our cattle and we have seen ranchers as well as farmers adopting this Cutting Edge Technology in order to produce beef and our crops all across this country. The technology on beef includes growth hormones. Were looking at china where they have basically and import tariff 47 on u. S. Beef. Theres a 12 base tariff. Were looking at the 25 retaliatory tariff, 10 valueadded tax. So the tariffs are bad enough. Then, we see the chinese not allowing our animals in their country because of their restrictive policies. You told the chairman that were talking to them. Can you tell us anything more positive than were talking to the chinese . How are we going to be able to address these nontariff barriers . Senator, thank you for your question. Ill elaborate as best as i can, but these are obviously ongoing conversations . I understand that. First, let me start with japan. We, all of us in the beef industry know how important that japanese beef market is. That is a topic that, quite frankly, senator, keeps me up at night. What i want you to know is that ambassador lighthiser understands getting a deal with japan as soon as possible. These conversations are occurring and ongoing. Thats all i can say about that. With the japanese, its a little different, though than were looking at with the chinese. Thats right. We are now just looking at the restricted tariffs there. Its a little different situation. Were trying to stay even with our competitors in japan. With regard to china, youre absolutely right. The way i describe it after 15 years, because of restrictions on hormones, we can get a thimble full of beef into china. Exactly. They bought 5 billion in beef last year. 5 billion. I have weve had hours of conversations about this, senator, with them. Just, we can say that these conversations have occurred is all i can say at this point. You mention and i appreciate that youre in negotiations and that makes it difficult. When you say that we need to diversify our exports, that doesnt help the cattle rancher, that doesnt help a farmer, whose livelihood is based on pork production. While farmers may be able to, depending where theyre located, be able to diversify crops, that isnt always that easy either. So i hope you obviously, well keep that in mind as were working through these negotiations. Both you and undersecretary kenna ha kenny have been in nebraska and heard our concerns. I know you will keep that in mind as you go forward on your negotiations. It was just a couple days ago we saw the president sign an executive order on agriculture biotechnology. You guys are now going to be tasked with creating the strategy thats going to address those unjustified, really, the unjustified trade barriers that we have. Could you comment on how the administration plans to address some of those issues in order that we can support the innovation that we see domestically continue to move forward, when it comes to biotechnology . Let me take a quick stab and lead ted into this. This with where the first time we had the biotechnical component and the u. S. Technology and usda are working around the world to get countries where they need to be with the use of technology and agriculture. Thank you, senator fischer. I have covered biotechnology in all its forms on every single government to government visit ive had. That includes industry. Ambassador doud is right. It is great language hence the importance of that. Were one off and gives us impetus were working with likeminded countries, as we have in the past and we doubled down on that. When secretary perdue was at the g20 he pulled a group of five, argentina, the u. S. , ministers of ag, made a commitment to double down on these kinds of thing. The world Needs Technology if were going to address that. It is all of the above strategy. We have yet to miss an opportunity we have not covered that very topic. Youre right usmca is the best and first start. Thank you, mr. Chairman. Senator smith. Thank you, mr. Chairman. I want to thank you all for being here today, especially my fellow minnesotan, dr. Robert johansson. And Ranking Member stabenow, you talked about challenges with the chaos and unpredictability, despite the best efforts i truly believe of those of you on this panel. When we were planning on this committee hearing, i asked minnesotans to tell me where they are on all of this. I talk to minnesota farmers all the time and i want to read one letter i got from greg sinbo. He said to me in part im not happy about the tariffs implemented especially this year. Because of weather conditions im at a loss what i should plant or even if i should plant a crop so late in the spring into poor conditions. Not having a secure market complicates Decision Making in an already difficult situation. Should i bother with burden assume supplies over what the crop is worth and take plant rent not worth what the land is worth and fight weeds all year. One certainty of the administrations policy to destroy all markets through tariffs and tough talk is farmers will lose money and peace of mind. That has been my experience so far. Mr. Chairman, id like to ask permission to enter these letters into the record. I read that letter because my core value here is we need fair trade policies that lift up American Farmers and american workers. I completely agree there have been unfair trade practices that have hurt American Farmers and businesses, so im grateful for the work you have been doing to try to break through some of that. But, you know, the problem is you must feel like youre working with one hand tied behind your back right now. Im not going to i cant even imagine what its like. Let me just ask one question. Last week, i was down in rock county, when there was this latest threat of tariffs on mexico. That was removed in the nick of time although i think it probably took months off the life of a lot of farmers who were trying to figure out what they were going to do next. What can you tell us about this large quantities of agriculture products the president said he has gotten a commitment from from mexico . Well, were waiting to hear the specifics on that. Let me just say we at usda have teed up, as we always have teed up, opportunities we could use to fulfill that. Until we get some specifics on that, were waiting. You should know we have a very Good Relationship with our friends at the Mexico Department of ag. We have been discussing those with them to lay those opportunities out. I know you do and i appreciate what you said about the importance of good long standing relationships at the root of good trade, why im disturbed about what is happening because the reliability of america as a trading partner is a challenge were dealing with here. I hope there is an agreement on large quantities, but i will believe it when i see it. This raises something im personally very interested in. It has to do with the possibilities of expanding trade into cuba. This is something my colleague, senior senator from minnesota, senator klobuchar has worked on with another senator. Cuba is a perfect trading partner with the United States in so many ways because what they are good at and what were good at is a perfect match. We dont grow a lot of chocolate in the United States and minnesota and they need our corn and beans. Again, just last week, the president reupped additional barriers between the United States and cuba. I went to cuba when i was lieutenantgovernor to lead the exact trade mission you are working on with undersecretary kinney . Could you agree it makes it even harder to build these relationships we know are so important . Thank you for the question. Id answer it this way. There is still agriculture product flowing to cuba. Its so challenging. There is. Theres so many barriers, no Credit Access. You know this. There is no Credit Access to the u. S. But other areas, for example, canadian banks. I checked this morning, there is still commercial agtural product flowing. The beauty is you all created the Market Program to use Market Access funds to go there. We had already closed out map grants when the farm bill passed. We are preparing, persuasive that opportunity creates itself, to ally folks to do that. Were aligned with you in that regard. Would you not agree this additional barrier is not helpful to the cause of expanding access to Agricultural Products in cuba . Im not going to say that because trade is still flowing. As far as i know it has not slowed. Im still checking on that. At one point venezuela was the number one export market in south america. I hope some of that conflation of what cuba is doing with venezuela might provide for an opportunity some day, when the gates open, to go back into venezuela. I think theres a long term play there, maam. Thank you. Thank you. Im out of time. I appreciate the work you are trying to do to open up markets and work youre doing ambassador doud, to try to nail down these incredible difficult negotiations. I do believe so strongly one hand doesnt know what the other hand is doing. I dont think one hand doesnt even know what its doing itself. Thank you, mr. Chair. Thank you. Senator brown. Thank you, mr. Chairman. Interesting to listen to these discussions and in the short time ive been here they get politically charged quickly. I think, of any of the members on this committee, actually involved in farming. Been involved in it 40 years as a poultry producer from the late 70s to tree farmer and actively involved in row crop production. All i can tell you, as a former and as one that speaks to many every weekend when i go back, they are happy that someone is finally here taking on the key issues of restrictions to markets. This did not happen from 2016 to the president. This has accumulated over many many years, when you look at the total amount of imports china takes and how small a share ours would be to them. Thats technical across the world, where there are structural restrictions to Agricultural Products. Everyone knows from the farming side its the most protected economy across the world. So, i want to applaud the administration for finally addressing these issues, where, yes, its going to incur some sharp term pain. Running a business, the other thing ive done other the years, ive never found where you will go in the right direction if you do not address issues for long run betterment, and you have to entertain a little short term pain. I think thats what were going through. I think the problems facing agriculture go so far beyond tariffs. You look at our agricultural capacity, and we export so little as being the agricultural engine of the world, that tells you all in a nutshell that, thank goodness, youre finally tackling issues to open up these markets. China is alluring because its large, it has so many people. I think one of you said basically of the 145 billion or so they import, we get just 20 to 25 billion, somewhere in there. Is that correct . Senator, their imports last year were 124 billion. On a good year, we do about 20. Last year, we did about 9 of that. That has been the dynamic for years. That tells you exactly what one country, which is going to be somewhere down the road the biggest potential importer of everything with their population if they keep growing as an economy. Again, it points out that this is all laid on the doorstep, before 2016, and anyone here, any politician, nippert involved with policy, i think, shoulders the blame. Thank goodness were trying to rectify it. I think there might be another round of questions i will stick around for. I want to throw this out for you to think about. Acreage expansion, i think, has occurred more so over the last decade across the world than any other time competition, which is the other variable in any business, my logistics business, farming competition is important. It looks like our competitors want the best of both worlds. They want us to buy from them and they dont want to take any of our products. I want you to think about which countries including europe and others, that are the culprits that are hardest to deal with, and then the other thing i want you to think about would be our own industry. Normally, when youre in a pickle like agriculture is where youre struggling to sell what you produce, you do find new markets. And in agriculture, biotechnology was talked about earlier. Do we have more potential there . I will start with this question, than raw commodity exports . In other words, do we need to enhance those markets so that were not dealing with what everyone else around the world is going to start producing and selling themselves, which is coin and soybeans. Its our significant to sell more of what we produce through the higher tech end of the biotech industry. Senator, ill try to answer that in 7 seconds. First, you should talk to dr. Johansson about the strength of the u. S. Dollars to other countries and particularly brazil and other competitive factors there. We think about ethanol and meat and valueadded opportunities around the world every single day. The place in the world that gives us fits is without question the europeans. They are actively fighting us every step of the way with regard to the use of technology. Noted. Anyone else want to comment on that . You brought up really good issues. We did see a lot of expansion of acreage globally, particularly in the highpriced years 7 years ago the chairman referred to, and in particular, in south america, we saw a lot of expanded acreage and in brazil and argentina, and theyre actively competing with us right now. They are big adopters of tech as well. Were united in that sense. As the ambassador and im sure undersecretary can highlight, we are continually facing a different level of standard from the europeans who argue, i think contrary to improving Food Security, theyre actually depressing Food Security globally. Senator, i want to respect you and the chairmans time management. I will come back and answer that later if you wish. Up to you two. You are recognized for an additional five minutes. Thank you, chairman. Good. Were somewhere between 7 and 9 billion on the planet. 7. 3 on the way to 9, some say 10 by 2050. We have to use every single tool to address that. We have for the last many many decades. By and large, technology around the world is still being adopted. There are now headwinds and i think ambassador doud said it very well, led by europe, with objections. So, it is a constant battle we have to face. Its technologies of all sorts. We talk about biotechnology, it goes well beyond that and you know that from your experience in indiana. This is our goal to press for these technologies. The way we do this is early flora. In july i will be at a meeting where we talk about scientific standards for pesticides, biotech, food additives. The list goes on and on. Its the world against europe in many cases to fight to keep those very rigorous scientificbased standards, rather than default to say a region of the world and their view what science is or should be determined. That is just one. Team usgr has been working hard on that data analysis. The list goes on. I wont go through that ad nauseum. We have to use every single one of those and why the attention we pay to soon elect a director general at the fio. That is an important election, because they have strayed in a major way from even considering technology, just take it out in many cases. These are things were trying to do around the world, sir. Thank you. Team ustr, keep it up. What youre doing needed to be done a long time ago. If we dont fix it now its kicking it down the road. Most farmers know we need to go through some transformation and happy youre doing what youre doing. I want to say this, i said it the last time. When interest comes to helping farmers, the thing ive noticed very seldom talked about is the high cost of production, the high cost of variable inputs. All i can say from 09 to 2013, when we had great incomes, it seemed like the cost of inputs mysteriously went up. Were now dealing with many huge corporations, where it used to be local suppliers. Im really most worried in the long run, the fact that an acre of soybeans, an acre of corn has nearly doubled or tripled to put out the crop each year. That is the hardest piece of arithmetic most of us farmers deal with. I want to address this to secretary mc kinney and maybe a comment to dr. Johansson. Where do you think the responsibility of the industry is to help farmers get through this tough stretch . Do you think its doing enough everyone seems to be okay at the corporate level. We buy all our inputs now from larger entities. Do they have a responsibility to help farmers out rather than looking to government to do it . Thanks for the question. I think we all have a role there. You should know we talk to industries of all types a great deal. They make their way to here and to ustr and elsewhere. Everybody has a responsibility. The best thing we are trying to do is work on nontariff trade barriers to help them keep their costs low so they dont have to pass on costs, which is the norm in business, as you know. The time ambassador doud and i spent on technology in china and so many countries as we make our way around the world is simply enormous. We think thats the best way we can do that. We as government arent going to get involved in pricing and things like that. There is respect for the Business Community out there. Maybe jawboning. Weve done that. Thats what weve tried to do is get rid of nontariff trade barriers that cause such disruption and costs of all sorts. Doctor. Quick question, you know, of course we look at costs going up every year. Not universal. We have seen failure prices come down since their High Water Mark a couple years ago. Thats the benefit to producers. What were making sure is making sure they have the ability to get a good price for crop, linked to trade and lowering transportation costs. We know the mississippi area is under siege from the water flowing through it and that will add to costs and lowered costs on the rail side, a benefit. On the input side from the chemical and seed companies, there has been some consolidation. The economic literature points to Different Things whether that lowers prices on one hand but reduces competition on the other. Something were continually looking at. I think everything and the kitchen sink because farmers are truly struggling. Thank you. Senator brown. Thank you, mr. Chairman. I cant wait until i need that extra five minutes one of these days. Thank you, mr. Chairman. Lets see. Senator klobuchar and i have been on this committee a combined quarter century. I dont remember our ever getting an extra five minutes. Maybe we dont have the relationship with the chairman senator braun has. I will explore that. Arent you going to give the chairman a second to respond . No, never mind. Thank you, mr. Chairman. I used 30 of my precious seconds up. I cant count the number of people ive heard you just took 30 seconds off your time. I cant count the number of people ive heard saying how important it is that we have certainty in business and farming. We know agricultural is a risky business. Seen 10 year lows and agricultural declining and you probably dont want to say this, continues to inject more uncertainty into american agriculture. The president tells farmers to trust him yet everyday farm bankruptcies increase and a small family farm is closed to an out of town investor. I want to share three or four lines from an article written by the toledo blade, a rural record in northwest ohio. June 2nd, the author of the piece is tom henry. As of june 2nd, only 33 of ohios corn acreage and 18 of the states soybean acreage have been planted. By this time of year, 90 of corn should have been planted and 79 of soybeans should have been planted. Thats based on the most recent five years. Farmers will tell you, as you know, mr. Undersecretary, years before this, they would go into the fields typically. These numbers are worse than theyve been over five years, worse than it used to be. Ohio was down 61 from its most recent five year average blanket soybeans june 1st. As farmers will tell you, even if their farm dries out enough to plant corn in another week or two, its growing season has been come blessed. One other farmer in his 60s said ive been farming 35 years. This is the first year i may not have one acre of corn. My questions are this. You can understand my concern with secretary per cue perdues announcement. And the usda planted a list of crops and its unclear if they can be planted for cover or after the typical late planting period. From the input my office gets from those sitting on combines waiting for water to subside, they have heightened uncertainty. My two questions for dr. Johansson. Will the usda provide flexibility for farm stories plant later than normal and have coverage or afp and due to the wet weather, will federal Crop Insurance provide flexibility due to early grazing or forage or hang of crops without penalty. You know, one of i mentioned earlier to the Ranking Members questions, that we didnt want to affect Planning Decisions with the new program. Of course, complicating that is the situation you mentioned with regard to prevent plant where were in a late delayed planting and a cool spring is affecting much of the corn crop as well as other commodities across the United States. Were behind in wheat and rice and soybeans, of course, as well. All of that will contribute to likely higher than normal prevent plant number. Of course, the Crop Insurance program does participate in prevent plant. There are a lot of conditions and provisions available to producers that are unfortunately faced with prevent plant for some of the producers in ohio that you mentioned. Again, as with last Years Program we wanted this Years Program to not affect the safety net provided by Crop Insurance. The prevent plant rules and eligibility requirements are remaining in place. I know we have been asked to look at the two components you did talk about with respect to late plant and heading and glazing, and those are components of the program that we are continuing to evaluate over this period under which the rule is still undergoing changes at the office of management and budget. We will continue to look at that. I would point out the president signed the supplemental disaster bill that does call out prevent plant in it and there is interaction as well with the program that may come out. Following that, that is early in its development at the department for the whip 2. 0 program, which was authorized by everyone here for the decreases we saw in 2018, hurricane and wildfires from last year as well as the 2019 prevent plant issues for this year. I dont have any hard and fast answers to your questions but im certainly willing, as i mentioned to the Ranking Member we can get back to you. We will be in touch on that. That is really important to particularly northwestern ohio agriculture. Mr. Chairman, i will ask another question. Because of time, i will ask dr. Johansson to give us this one in writing to lake erie. Because of the wetness and late planning and all thats happened in runoff, algae blooms are like likely problem come late august and contrast to Lake Superior senator klobuchar and senator smith look at often of 600 feet deep and we know the limited number of acres in the western base and wonder if usda is considering utilizing considering crop plantings or increasing buffers in places like ohio, and you can answer that in writing. Thank you, senator braun, for asking that question, on the mind of every member. Senator ernst. Senator, thank you for asking that question. Right now, theyre undergoing the six, low Commodity Prices access to foreign markets due to trade disputes and very very wet. You can look at nebraska, look at iowa, very very wet commissions due to a wet spring and the Flooding Issues that weve had. This really is time for the administration to bring together these trade deals. Wed love to see them done soon. We want them done right. Wed love to see them done soon. Our farmers really do need a win. Ambassador doud, if i could start with you, please . Firstoff, believe the iowa farmers stand behind the president. I heard many of them over the course of this past week. They know when it comes to china, we need to hold them accountable for years of very bad behavior on the trade front. In fact, the end of last year, i had one farmer who came up to me after a meeting and he made the point, he understood why the president is doing this but i dont understand why we didnt have a president that didnt address this before this one. This has been going on for such a long time and President Trump is finally standing up to the chinese and their bad practices. That being said, the spread of african swine fever through china does have the potential to be a big opportunity for our exports to meet their additional demand, as theyre going through pulling their herds. Are going h culling their herds. So the problem is, with the ongoing trade dispute, china still has 50 retaliatory tariffs on our u. S. Pork exports and additional duty has meant a loss of about 8 per hog or 1 billion per year to u. S. Pig farmers. All our iowa farmers want the free markets. They do. When can iowa farmers really expect some of the normalization in our markets . Senator, thank you for your question, and theres no question that this african swine fever issue is truly remarkable in terms of its global implications. I would just simply say that with regard to pork exports to china, our biggest hurdle is the structural issue of their ban on ractopamin, its something that has been internationally accepted, maximum residue level internationally. Everybody in the world uses it with a couple of exceptions here and there, but china doesnt. We have spent hours talking about this. I would also point, just quickly make the point, in terms of certainty, the first thing we can do is pass usmca, then from there we work on japan and china and get these things done and in terms of historical issues, i would say that there has been work on china historically and we just recently won two of the biggest wto cases in the history of agriculture against china. Well, and i appreciate that because i do think the usmca needs to be done right away as well, and we just need to continue encouraging our house members to be supportive of that action. It is very, very important to the folks in iowa that i talk to. So just very briefly, the usmca, while were on that, would create huge Economic Growth and jobs across the United States, in many of our industries, and it would secure a top market for all of our u. S. Agricultural commodities, but one there are well, there many achievements, i think, that are within usmca that dont get talked about. We talk about tariffs. We focus on tariffs. And certainly, for you, undersecretary mckinney, if you would address some of the improvements that exist within usmca that we dont necessarily talk about, things like sanitary standards and biotech. Can you speak on how those issues are being addressed in usmca and talk about some of the wins that were not necessarily talking about. Sure. We talk about dairy access, wheat equities across the borders, those things, more poultry access. I know how much poultry you have in your state. So, yeah, those catch a lot of attention. Ive said very publicly many times the rewrite of the sanita sanitary fidosanitary chapter, its not really a cut and paste into other trade agreements but, boy, its a great starting point and that has been the soft underbelly. Thats where we have not seen free, fair, and reciprocal trade over these many years so i think thats, perhaps, the greatest gift. Right on its heels i would talk about biosciences, the biotechnology chapter. That has been an enormous boone to productivity, Quality Improvement around the world, helping african farmers, cotton farmers in india, itself. So thats a new chapter that can also be used as a starting point in other negotiations. So those are i still think, though, the biggest one, though, is the message that passage of usmca will send to the world. If we dont get this done, were in deep trouble in terms of other negotiations we seek to do because this is a good deal. We must deliver on this. Those are just two things, maam. No, thank you very much, thank you, mr. Chairman. Senator klobuchar . Though yank you, mr. Chairma. My state is the fourth largest ag exporting state in the country and i appreciate the work youve been doing during difficult times. Many of us up here were relieved the administration did not end up imposing the 5 tariff on mexico as threatened, but the approach of using tariffs in response to nontra trade issues concerning and could open the floodgate to widespread use of tariffs to potentially settle all kinds of potential policy issue. One of you, ambassador doud or mckinney, can answer this, where does the administration draw the line on the use of tariffs for non trade ends . Senator, i would simply say that in my time in washington, d. C. , i have never seen a president create more leverage in thin air than this president has. Okay. I think what we learned later was that that agreement had been made a few months before the tweet went out, but we can leave that to the history books, i guess. But my first question along the lines of your work that youre doing which i appreciate with the Market Facilitation Program would be this is good in that our farmers need the help. One of the things ive heard from a number of them is this goes on longer and longer as we try to get china to the point of an agreement is that a lot of countries that are boyi ingbuyi soybeans now from other places are getting longerterm contracts with them. Its going to be harder once theres an agreement for our people to get back in the market and i dont know if thats true, dr. Johansson, or anyone that wants to answer that, if that is true with your university of minnesota degree. Ill comment on this. I think the undersecretary and ambassador may want to add. Certainly we know to a degree, its the south americans export during their season, and it makes for a reliable trade for the chinese and theyre having to renegotiate their contracts. They are looking at doing so right now. Of course, if we get a good trade deal in, well go back to providing them with good quality u. S. Soybeans. We have a Good Transportation system to get them there through the specifpacific northwestwest the gulf in order to meet supplies if theyre going to other countries, theyre doing shortterm contracts or i imagine they are entering into a number of contracts that are both short term and long term. As weve seen with us and im sure with other countries, theyre willing to break those contracts pretty easily if they find it somewhere else. Market facilitation, when will the commodities that are eligib eligible once its done with omb, well put the rates out there and start signup as soon as we can, so takes a couple weeks to get through that process. And were making adjustments and we discuss this with folks over there. And as i thinks been discussed before, some areas are hit harder depending on where the soybeans are going. Hit minnesota hard because about 60 of our states soybeans are shipped to the west coast by rail. Will you be given consideration to regional shipping disparities within each commodity for the second round of market facilitation payments . Thats a great question. That you asked last year as well. We looked at the effects for the upper midwest and the Northern Plains and have seen a lot f those diminish. Of course, we would expect depending on how negotiations go that we may see some aboveaverage basis impacts as we head into the fall. Well continue to follow that. Of course, the secretary is continuing to monitor progress on trade as well as other economic effects on producers that are affected by the Current Situation. Okay. So heres an opportunity right now. We know the threat of foreign animal disease and its potential impact on farmers can hurt us here or it can help us if it happens in another country, and of course, wed rather not have this happen at all because it eventually comes to our shores and ive worked hard with senator cornyn to include a vaccine bank in the last farm bill. An outbreak of african swine fever in china has significantly reduced their hog production and some economists have noted that china may lose more pork than the u. S. Produces. Dr. Johansson, do you believe that u. S. Pork producers could expand their market in china if there was a negotiation with china and that would relieve from that country 62 import duty on pork products . It would help us. Yeah, i think theres a lot of uncertainty about how bad the asf outbreak is in china right now. Theres been widespread speculation that its 20 , 30 , even greater percent of their herd is going to be affected and destroyed as a result. That will open opportunities for pork suppliers across the globe to get into that market in a larger extent. I think the u. S. Hog producers will also benefit from seeing that with our without tariffs, backfill behind what other countries are sending them or well get in there as well. Of course, with the tariff, wed be able to sell more pork products into china as well. Are turkeys included in the negotiations for china . Were number one for kiturkeys our state. Dont laugh. Everything is on the table. Weve had a conversation with a multitude of commodities. Very good. I first wanted to end, mr. Chairman, so i can do the extra minute, just to thank secretary mckinney, you recently led a trade delegation to columbia. I know tom peterson was there, our agriculture commissioner. Enjoyed the trip. It was a very big group from minnesota, and we enjoyed having them. I think they left with some opportunities in mind. And i should add, you raise turkey, you should know that turkey has found its way into india of all places skruas a re of the wto suit. Were thrilled with that. All right. Thank you. Well, coop, youre up. Almost high noon, mr. Chairman. Thank you. Thanks for having this hearing. Let me thasay to our panel, thanksing thanks for being here. Remind all of you our farmers and ranchers would much rather get a check from selling their products than they would sfrom the federal government. My concern in all this is were losing Global Market share. Thats why i think its really important that we close some of these trade deals out. This hearing isnt designed to provide certainty to farmers and rankers, with specific focus on trade, and when i travel in south dakota, what farmers and ranchers ask me when are these trade issues going to be resolved . Im asking you, can you give me and our farmers and ranchers a timeline regarding china . Mr. Doud . Senator, thats i understand those concerns, and believe me, theyre talked about at ustr every single day. We circulate ag Commodity Prices in the building every single day of whats going on. I think in terms of the china discussion, i dont know is the answer. Well have to see. The meeting, i believe, there will be a meeting that occurs between President Trump and president xi here toward the end of the month. And i think thats our next line of demarcation here to see how this is going to go. Can you give us any kind of timeline at all regarding japan . Bilateral deal. Senator, i cannot. I can only tell you that the conversations with regard to agriculture and trade between the u. S. And japan are ongoing as we speak. Given the administrations interest in negotiating bilateral deals, instead of multilateral agreements like the tpp, ycan you share with us the status of any other trade negotiations the u. S. Is pursuing . In addition to usmca, weve also through the tpa process here on capitol hill indicated u. S. Interest in negotiating with the european union, the uk and the uk. I dont know what the Brexit Process is going to be, but obviously the uk is something that we are taking keen interest in. The other part of the world that is of enormous interest is africa. And we all know that there are other countries in the world that are taking an interest in that as well, and i want to assure you, senator, that ustr is interested in that part of the world as well. Is there any, though, when you talk about discussions with the eu or the uk, is it anything more than that at this stage in i me . I mean, are we talking about very embryonictype discussions or are we actually in a process of negotiation with any of these potential trading partners . Obviously with the uk we have to wait to see what the brexit timeline it. What about the eu . With the eu, i will tell you, quite frankly, that theyve been very frank in their interest in saying no agriculture. And i our point has been very simple. Theres no way to come to congress and do a deal that doesnt include agriculture. So how are we going to rectify this . Well, we support that position, and, but i think theres Great Potential, obviously, with china, Great Potential with japan, and, again, if the eu would drop some of their tariff and nontariff barriers and really seriously enter into a negotiation on agriculture, that also would be a great market for american agriculture, but would just urge you to just understand the sense of urgency, i think, out there in farm country. These are really tough times. And not only now do we have all the trade issues but we got weather piled on top of that, chronic year over year low Commodity Prices and producers who are increasingly operating below the cost of production. Its a situation we cant sustain and keep these farmers in business. And in that in that vain, i just very quickly want to touch on the mfp program. In the june 10th usga press release, provided, i quote, if you choose to plant a cover crop with potential to be harvested because of this years averse weather conditions you may qualify for a minimal amount of mfp assistance. And i guess the question is, if youre eligible for a minimal amount of mfp assistance, why wouldnt usda make a more equitable mfp payment to producers, comparable to the mfp payment that would be paid if that producer had been able to plant and harvest a crop . Dr. Johansson . So, as i mentioned earlier, were trying to balance trying to not to incentivize decisions and want commerce to plan for their operation, for what works best for them given the current prices were seeing out there as well as the currenting ing agro conditions theyre seeing on their were telling people that who havent planted. Right. As with last year, were viewing the Current Situation with respect to prevent plant as something that by in large should be covered by the prevent plant conditions that are part of their normal Crop Insurance contract. That while if producers do plant an eligible cover crop, they will receive a component of their of the mfp payment for that planting. By in large, their incentive payment will be coming from their recovery payment or their safety net will be coming from the prevent plant, not from mfp. The Market Facilitation Programs obviously designed to address trade issues and not designed to address weather issues. But, again, as i pointed out earlier, theres the disaster bill im talking about. Again, thats another balancing act that were undergoing right now in the doe apartmeepartment figured out how to spend the 3 billion in that, the supplemental . The supplemental has, as youre aware, the prevent plant provisions that were added to that were added after the amount of the supplemental had already been determined, so, of course, as the secretary has pointed out, there were the hurricanes and wildfires from 2018 that certainly would are intended for being compensated to the extent that they affected producers in the southeast in terms of the hurricanes and in california with respect to the wildfires and, of course, theres other disasters in there as well. Volcanos included. And then, of course, we are looking at how this interacts with prevent plant and what additional flexibilities can be provided to producers. As a component of that supplemental disaster bill. All right. Be equitable. Thank you. Mr. Chairman . Senator hogan . Thank you, mr. Chairman, Ranking Member wolf, for having a hearing. Thanks to all of you for being here. Mr. Sec teretary and the entire crew here and everybody at the usda and the administration, thank you for moving forward on the mfp second round. I worked hard on that as did others, and we appreciate the responsiveness on it. I think the questions and comments by our my distinguished colleague from south dakota, highlights the need for it in farm country. Its a tough time in farm country, so were very appreciative of that. And dr. Johansson, want to learn from round one and do a better job in round two, just look senator thune was talking about. One of the questions that senator klobuchar brought up is an important one. She termed it in terms of regional differences. I talked about it in terms of basis. And as you know very well brought this up last goaround. Please comment on your effort to include that in this mfp. Its a very important issue. She talked about 60 of her soybeans going to china. In north dakota, we spend 1. 5 billion worth of soybeans to china on a regular year. Didnt happen this year. So that tells you how there are regional disparities or which crea creat creates which costs our farmers a lot of money. Yeah, the basis effects are certainly something we did note last year and you had asked about it and we continued to follow that. I think thats going to be also another key piece of information that the secretary is going to consider as we move forward with the implementation of mfp. Of course, there are other key considerations as well. Some of that includes the progress we do make with china on reaching a deal and, of course, hes made it clear you mean in subsequent rounds. Rounds two and three. Thats correct. And just as an example, of course, we dont include the tariff impacts that would have been occurring under the tariffs from canada and mexico, where those have been removed from our calculations since we have met, you know, reached a doeal on tht component. But looking forward to the basis effects, we looked at basis right now, and right now things look within the sort of the average for this time of year. Of course, the major basis of effects were likely to see occur right at harvest in Northern Plains, for example, and were going to continue to follow that to see how, if they do fall outside that range of sort of average basis that you would expect given the size of the crop and well certainly keep that ability to adjust the program as we get more information in. Again, so were very aware of this. We know that producers in those areas are susceptible to more higher impacts from the basis component. Depending on which crops they produced and where theyre selling them to and i know ive been bringing it up, im not going to stop, o so yeah, so i dont have a i dont have an answer for you right now that i can give you, but certainly something we can look at and respond in written form. And, remember, dr. Johansson, that these i mean, yes, this is market fillatiacilitation ba exports. You have a lot of crops that move with those exports even if theyre not fully exported. Canola moving with corn. Thats effective as you look at the county average payment so you dont end up with some counties that dont just grow corn and soybeans that are in hurt bag and youre not giving them the assistance. Yeah, were certainly very aware of that, again, and we think that the program that weve designed will help offset some of those criticisms that we got last year. Good. Id like to turn to secretary mckinney. Ambassador doud, what are we doing prior to the g20 with china on facilitating or negotiating with china leading up to the g20 on trade . Youre heavily engaged, right . Heavily engaged above my level. On the agricultural side of this equation, we have worked constantly for days on end to put together a very thick document and now hopefully this can be carried forward and we can get a deal. Can you get a deal with japan . Can you get a trade deal with japan . Senator can you get it reasonably soon soon . If you get a trade deal with japan and pass usmca, it puts pressure on china, doesnt it . And obviously a trade deal with japan, theyre a huge Economic Force in the pacific rim. It would make a huge difference. So how are you doing there . Senator, thats exactly how you would draw it up on the chalkboard. Hows that . Good. And i know, secretary perdue was over there. I think thats great. Good job on 309 months for livestock. For our cattle. Boy, i think it could you put some it would be a real shot in the arm to get a deal with japan. How important it is we get us a usmca why dont you talk about how important it is for our farmers . Well, i think you said it very, very well. I think usmca is the template for the rest of the world on a fullblown fta so we must get that right so were here to help you, whatever information you and the house need to move that through. Its a good deal. Its well done. Yeah. It seems to me you create momentum one step at a time. If we could move usmca, if we could get something in august with japan, its a way to continue to put a real push on china with some of our allies, you know, so im hopeful we can do that one fin. One final with the indulgence of the chair. One final thought or comment, question. To the extent we can access the cover crops on pp acres, its a costeffective way to help our livestock producers so i hope youre looking at that, and, so, go ahead, whoever wants to take that one. Yeah. We certainly received that comment. Again, were looking at flexibility in terms of that november 1st date. As well as the potential ability to harvest. Again, we dont want to affect the pp provisions, per se, but we do have some flexibility that you afforded us under the supplemental disaster and certainly were also considering that on the mfp side as well, but, you know, right now your openness to that helps make sure that people do make good decisions out there rather than try to force something in the ground. Again, i think its a real costeffective way to give the livestock guys some help. Obviously, theyre a much smaller part of this overall trade assistance package. Senator, i just wanted to add one thing. Clearly, we are all focused on the Key Countries that you and ambassador doud and so many have focused but i beg of you not to forget these other countries. We had a very good ag trade in colombia. Sales are growing there. Peru and so many other countries where we have or in some cases we dont have Ag Trade Missions. You have some peas, pulses and lentils up your way. I had two members of your Community Talking about the joy of having gone to guatemala yoolast year and recovered a lot of the losses they lost rather dramatically in india. We are, we will sustain, the focus on the major crops. Theyre the here and now. These major countries. I want to make sure you know we are making progress in o lot of these other countries. Thats good. What india is doing to block them out. I have to say, the eu is going to be a tough nut to crack. We were over there for the 75th anniversary of dday at normandy. You look at their small fields and all that. The idea that they could go head to head with us if they didnt have, you know, their restrictions in place. You know, you realize its a different world. I mean, at the end of the day, no one can compete with our farmers and ranchers if we get a fair shake. Right . But thanks for your great work. We appreciate it. The distinguished Ranking Member is recognized. Thank you, mr. Chairman. I just had one closing statement and i think its important because, ambassador doud, you you were talking about the wto at certain points. After the first 12 billion round in trade mitigation was announced, our trading partners certainly took notice of that and in 2018 our country emphasized that the aid was one time, shortterm assistance that was not expected to have production effects because it was announced when commodities had been planted or produced. Given the timing or size of the recently announced 16 billion in new assistance, are you confident that we are still abiding by our wto commitments and is there any possibility we are creating fruuture problems r our farmers and ranchers at the wto . Senator, i thank you for your question. Its an important one. The answer is, ustr and usda have ongoing conversations about this and at this point, senator, i can assure you that ustr is confident that we will and are abiding by our wto commitments. That will be interesting to watch. Okay. Thank you. Trade i think were finally on now. But i do want to thank you, all three, for yeour commitment. These are tough times and these are tough jobs, but you have put your shoulder to the wheel and really worked very hard to accomplish things at a difficult time. I mean, thats just where we are. Most unfortunate. To my fellow members, we ask that any additional questions you may have for the record be submitted to the committee, five Business Days by today or 5 00 p. M. Next thursday june 20th. Committees adjourned. On capitol hill this week the Senate Resumes debate on the nomination of mark esper to be secretary of defense. A confirmation vote is expected tomorrow. Also tomorrow, votes on the house passed 9 11 Victim Compensation fund. In the house, members will consider a bill later this week to help secure Retirement Savings for workers and retirees. Also, legislation to address Border Security and accountability at the Homeland Security department. Watch the house live on cspan. The senate live on cspan2. And you can see both on cspan. Org or listen to congressional debate on cspans free radio. And tomorrow, fbi director Christopher Wray is expected to testify before the Senate Judiciary committee about oversight of the fbi. Live coverage tomorrow morning at 10 00 eastern here on cspan3. Live online at cspan. Org. Or listen live on the radio app. Robert mueller testifies to congress on wednesday about possible obstruction of justice and abuse of power by President Trump and russian interference in the 2016 president ial election. Our live coverage starts at 8 30 a. M. Eastern on cspan3. Online at cspan. Org. Or listen where y