minutes. >> good morning. i call this meeting in the senate committee on agriculture forestry to order. the ambassador doud, mckinney and johansen we are happy to have you back again for the committee to discuss the need for certainty and our global agriculture markets. international trade policies and their impacts on the united states agricultural economy. has been a topic of great interest over the last few years. and more particularly the last few months. in fact, it is the second time in the last year we are hearing about the efforts being made at the office of the united states trade representative and the department of agriculture. i hope eventually it will result in a long-term, 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 significantly to our members was the successful passage and enactment of the 2018 farm bill. with the help of everybody here. much like the negotiations with international trading partners the past agreement was not easy. there were many challenges and things to overcome and the final bill had to bring together members of both the house and senate to represent incredibly diverse populations and regions of agriculture. but ultimately, with the support of my partner and the ranking member, senator stabenow and other members of this committee we persevered and accomplished a strong ball with historic bipartisan support, a bell that provides certainty and predictability to farmers, ranchers and growers across the country including to strengthen and increase investment in our agriculture export programs. and i know that the ustr the usda have also been very busy since we were last together. the administration has been moving the united states mexico canada agreement or the u.s. mca to the trade promotion authority process. recently the section 232 tariff in mexico and canada were left and producers look forward to congress with the consideration of the u.s. mca. in addition there have been positive outcomes with the u.s. and the wto, and the cases against china, on trade distorting price parts and tariff quotas as well as the restoration of full access of the u.s. be into japan. there are many good examples of the work you both had been doing. on behalf of u.s. agriculture allowing around the world and the committee looks forward to hearing about your continued efforts to eliminate trade barriers and role market access for our products. we simply have to get that done. however, these positive steps cannot truly be felt by producers until certainty and predictability is achieved in our global markets. everyone around this table understands what our producers are facing back home. on top of the already low prices for their crops, producers are working through floods, tornadoes and weather advanced to numerous to list and of course challenges of retaliatory tariffs. i was in kansas at the northeast part of kansas platform overlooking the missouri i had never seen the missouri river from 8-11 miles wide. it looked quite like the caspian sea although i have never seen the caspian sea but that is what i think it probably would look like, unbelievable. fortunately the farm bill is in place to ease some of the things felt but 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 greg i know you have been working overtime on that. in fact there is 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 while we currently face a significant disadvantage to tpp countries such as australia and canada. it is time to look forward to the future. on an update of activities that certainly is appropriate today, i also hope to hear about the future of u.s. agriculture trade policy, this includes not just restoring certainty to our markets, that the u.s. either had to negotiated agreements or, as a traditional competitive supplier. but, what will be done to improve access to those same markets and broaden them to others. question is what is being done today, they want to be a reliable supplier again around the world and around the world today and tomorrow how can we continue to strengthen trading relationships that we have worked for four years, to establish also building new opportunities around the world. ambassador doud, and doctor johansen and mckinney thank you 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 that the distinguished senator stabenow for her remarks. >> thank you mr. chairman for holding this really important hearing and ambassador doud under mckinney thank you and welcome back to the committee we appreciate your efforts and appreciate you being here today, it wasn't exactly one year ago that we sat around the table and passed our bipartisan farm bill in the senate and in order to provide certainty and predictability for our farmers and ranchers. however, today that certainty is being undermined. by this administration's chaotic and unpredictable trade agenda. despite your best efforts and i would underscore that because i know each of you are working hard but the reality is, we have chaos and unpredictability going on right now and it is no secret that it is a very challenging kind. for american farmers. low prices for market conditions continue to plague our agricultural economy. extreme weather events from tornadoes to bomb cyclones, and new terms happening all the time because of the intensity of what is happening in the weather, that is damaging crops and livestock, unseasonably cool and rainy weather has made it next to impossible for farmers in michigan and across the midwest to get their seeds in the ground. for the upcoming crop year. facing the great unknowns 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 administration's reckless approach to trade has taken a toll on our ability to export agriculture 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 and some of our most important export markets. the driving 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. michigan's industry has dealt with unfair imports from turkey and tariffs from china. meanwhile the administration says are terry growers have not suffered sufficient trade damage, that qualify for help. 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 to check off over the last two decades, to establish chinese markets that are now gone and may be impossible to rebuild. a short-term trade disruption can create a permanent loss in market share for american farmers, we know that. that happened during the nixon administration's been on soybean exports, which chairman roberts witnessed firsthand as a congressional staffer just a couple of years ago. the fda recently decided to announce a second round of trade assistant that if anything i believe is adding to the confusion. and uncertainty for farmers. my understanding is the desire to help farmers, the proposed trade is creating more questions than answers. i have strong concerns that these payments will let me, will not be distributed in an equitable way despite between regions and crops, the timing of the announcements combined with widespread prevented planting decisions could make our farm economy even worse. additionally the administration's actions are certainly and unprecedented use of the commodity credit corporation funds. which are not guaranteed and that raises questions with congress. also, it is outrageous that foreign companies are profiting from assistance that's of post to be for our farmers. after a brazilian company we have received millions in taxpayer dollars, we recently learned that aid is also gone to a japanese company with a troubling criminal history of corruption and bribery. the usda needs to immediately take action to prevent purchases from benefiting foreign competitors. while i agree we need to hold countries accountable when they break the rules, this administration's 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 and announced by tweed, this uncertainty has gone on long enough. so ambassador dowd undersecretary mckinney, doctor johansen, you were before the committee to discuss the same topic nine months ago, and despite what i'm sure are your best efforts the 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. >> word of welcome to our panel of witnesses before the committee this morning, our first witness is greg doud, he serves as our negotiator in the office of trade representative. greg was raised on a farm in mankato, kansas, graduated from kansas state university. from his time working to develop markets for the u.s. wheat associates and later the national cattlemen's beef association, he certainly has an understanding in the importance of trade and impacts that have in agriculture, and vinyl he worked in another important issue a final as a staffer during my time as ranking member. when the chairperson to my right was the chairperson obviously. and we passed a bill pretty quickly but it hit a brick road over there in the house. that seems to be the case with a lot of things. with the ambassador's experience, global agriculture trade, i really want to emphasize that. i am really glad to have him representing the board and voices, if you ask the farmers and ranchers of his current role at the ustr so we welcome you back ambassador doud i look forward to your testimony, i don't know anybody who has been working any harder to restore markets and our reputation as a reliable supplier, morse especially with the chinese. next we have undersecretary for trade and foreign agricultural affairs, ted mckinney who coordinates agriculture trade across the of agriculture, undersecretary can mckinney, formally served as director of the indiana state department of agriculture, worked for 19 years with agro sciences and 14 years with land core at director corporative affairs, undersecretary kemeny hills from trenton, indiana graduated purdue university, and an agricultural economy, welcome back mr. undersecretary, good to have you here i look forward to your testimony. doctor johansen is here to answer questions he is not participating as a witness, but we thought we would have him come and i 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, doctor johansen is it possible for the department of agriculture forecast, and productions as well as evaluating the secretary on the economic implications of alternative programs regulations and legislative proposals. i don't know if that has something to do with the mitigation payment as well. doctor johansen received his bachelors of arts in economics from northeastern university, his master of science in phd and agriculture from economics from his home state and grant at the university of minnesota, welcome and thank you for being here today, doctor johansen, greg, go ahead. >> chairman roberts, ranking member stabenow and other distinguished committee members i want to thank you for the opportunity to testify today. on president trumps agricultural trade policy agenda. ambassador lyne heiser and my colleagues at ustr and usda, have been working around the clock to address agricultural trade issues with our trading partners and increased export opportunities for our farmers, ranchers, workers and agribusinesses, i look forward to highlighting our efforts in multiple areas. he noted states is the world's largest exporter in an importer of food and agricultural products. u.s. agriculture is posted an annual trade surplus for well over 50 years. overall u.s. farmers and ranchers export more than 20% of what they produce. in 2018, agricultural 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 efforts and export markets for american agriculture. whether it is poultry and beef to north africa, for south america, grains and horticulture to asia, derry to chile. the list goes on and on. let me focus my remarks however on major trade initiatives of this administration. first, passage of the u.s. mca's is an absolute necessity for agriculture, since the limitation of the north american free trade agreement in 1994, are agricultural exports to canada have increased 289%. in our exports to mexico 311%. and agriculture creating a first and second largest export markets and 2018 with a combined 41 billion out of this hundred and 45 billion in total exports last year. in accordance with our tpa requirements, u.s. mca created new market access for u.s. dairy, poultry and eggs into canada above and beyond existing access under both and aft and what was negotiated. they maintain duty-free access, to mexico allowing u.s. producers to build upon the 19 billion exports to mexico in 2018. there are many other improvements of u.s. mca over this including technology, including new technology such as gene editing. the cedro safeguards for recognition of new geographical indications and canada's commitment to ensure that british columbia illuminate its discriminatory treatment of u.s. wine and grocery stores. the urgency to pass u.s. mca cannot be overstated for u.s. agriculture. due to the size of the canadian and mexican markets, for u.s. agricultural exports, a tremendous amount of work is going to negotiations with china since president trump and president she met and what is iris on november 30. the administration is negotiated in good faith since then. twice delaying the schedule increase in tariff rates, due to progress in the trade talks. however, because china backtracked on significant commitments that has been made during the course of the negotiations, including on agricultural issues. president trump directed ustr to increase the rate of duty on 200 billion of chinese imports from 10 to 25% on may 10. the u.s. china economic relationship is very important in the trump administration is committed to reaching meaningful fully enforceable commitment to resolve structural issues, and improving trade between our two countries. i can say an important element of our negotiations has been to resolve a large number of unwanted and long-standing trade barriers to u.s. agricultural exports. i hope that china will make real structural changes across the range of unfair policies and practices that yield actual verifiable and enforceable results. if we are able to have an acceptable agreement, president trump expects substantial and immediate purchases of u.s. agricultural 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 over 13 billion in ag goods to japan. the president and ambassador and i also understand the urgency. to advance negotiations with japan as soon as possible for u.s. agriculture. we have also published our negotiating objectives for trade agreements with the eu and uk upon its exit from the eu. the wto provides multiple tools for the u.s. to build coalitions or act alone to aggressively counteract trade concerns that negatively impact u.s. production and jobs. we have major concerns, the countries are failing to properly notify their agricultural domestic supports. we therefore have started submitting our own counter notifications of other countries excessive domestic support and we are holding countries accountable. are there excessive trade distorting arm subsidies. we litigated on a major dispute to a wto panel on china's access farm supports for greens and we won. a cornerstone of u.s. trade policy is to promote the adoption by our trading partners of transparent predictable and risk appropriate regulatory methods that are based on science. we are working in the wto code x and with several like minded countries to advance this objective, thank you, i look forward to working with the committee to implement the trade policy agenda and i am happy to answer any questions. >> we thank you, ambassador, undersecretary mckinney, thank you.>> distinguish members thank you for the invitation to be here. it is a pleasure to be with my colleagues ambassador greg doud, we welcome the opportunity to share any and all of the goings on that we have a usda with you. first i want to thank you as well for your work in the 2014 farm bill that created the opportunity for this position, i hope we are honoring the vision that you and so many others had i think 350 or 400,000 miles might be one indication and more on that later. as undersecretary i fully support the administrations a stronger commitment to our farmers and ranchers and providing them the opportunity to export across the globe under fair and reciprocal terms of trade. as we work to level that trade playing field we are using things that was helped to create the farm bill and those before it partnering with ag trade associations cooperatives, state regional trade groups, small medium sized businesses. we share the cost, help focus the marketing and promotional activities that build commercial export markets for u.s. agriculture, in fact the return on the taxpayer dollar is at minimum $28 to one. in return. and we can give you more detail on that and proud to do so. i worried about u.s. mca. it is clearly the top legislative priority for the administration as it is i think, for all of u.s. agriculture i know yesterday, or the day before yesterday, a letter came out from some near 1000 agricultural farm trade, association groups, that noted their support for u.s. mca and i suspect you all have seen that, it was incredible, u.s. mca, as greg said he does allow for unprecedented market access for u.s. dairy farmers into canada and eliminates discriminatory grading of usda weeds, there is a chapter on sps issues that could be the greatest benefit of that new, brand-new language first ever on biosciences and biotechnology that i think can be used in other negotiations, to has committed not to restrict market access for u.s. jesus, very important, and we hope that there, we think there will be elimination of the discriminatory treatment of retail of sales and u.s. wine and beer at in the province of british columbia, and we encourage its passage. a bit about china, president trump no doubt has taken a tough but we believe necessary steps or steps to confront china's unfair trade practices. there are challenges, we see that we have lived it, but we are confident and we hear from our u.s. farmers and ranchers that they are willing to take that pain to read turn on some gain in terms of long-term benefits. a bit about support of farmers. so the administration is committed to our farmers. in one example, is president trump's very quick direction to secretary perdue and he to us. and my colleague rob johansen here, to create a relief strategy to sustain this mitigation that allows agricultural producers some income while the administration needs to work on free, fair and reciprocal trade deals, atp or ag trading promotion two is a part of that now, and is assisting now and will assist exporters maintain and develop new market exports. happy to talk about that. my challenge, i embrace secretary produce charge to be agricultural's unapologetic advocate around the world. and i hope i'm doing that. my most important role though is building personal relationships with foreign buyers, government officials, farmers, ranchers here and abroad, and so many others that results in facilitating trust, understanding and progress and i think we are making headway. happy to discuss that more if you wish. i just returned from a mission to columbia last week, thank you to you all and many others for the columbia free trade agreement all is going well there. there is always issues be addressed, but there is a wonderful exchange and we are seeing the returns from those kinds of deals. before and ag service represents a group like none other across the world and in collaboration with ustr, commerce and some others we are working hard. i would add the trade missions or atms like last week, our welding exports, happy to address that. request to view, encourage you to reach out or remind your state departments of ag that we have some terrific programs these trade missions, numerous and numerous food shows around the world, we facilitate those, and we have a great deal of interest but not all of them and so to the degree you want to encourage them are always, always there. we completed this year already, two trade missions, one in columbia, and we have five more that will be a record high in the history of the foreign ag service, seven years year, six last year, 2016 and prior was three per year on an average, and they do work. once we have planned for this year include canada, vietnam, japan, ghana and mexico and that does not include the one on ones that we will go to. so i want to thank you for what you have done in the farm bill and so many other programs that create and allow for programs like the market access program, the foreign market development program, task which by the way, a bit underutilized, and then emp, also a bit underutilized, and we are working on that. they are fully operational and very helpful, you know the value of these programs to u.s. agriculture and know we are there with you, esther chairman this concludes my statement, thank you very much. >> thank you very much, ambassador, let's start off. >> ustr has been working hard, i know you have. you have been keeping me fully apprised, finalizing the u.s. mta for congressional approval, we must do this, i know that negotiations with japan are underway. as well. i think the worry that we have, is that we are trailing behind our competitors know that the comprehensive and progressive transpacific partnership, tpt bp , is enforceable as other agreements around the world which have blocks like the european union. so, my question is going forward, how did the ustr enter the united states is on the proverbial level playing field with countries that have already forged a strong agricultural agreements already forged them. done. most especially, countries like australia and canada. please. >> mr. chairman thank you for your question, you are exactly right, the strategy is u.s. mca, china, japan and then we got other places to go which regard the u.s. mca i think the best thing we can do at this point is to pass this agreement through congress, it is a solid agreement, there isn't anything in this agreement and agriculture or across-the-board for that matter, that isn't the same or better than it was before. and so, we need to get that job done, mr. chairman we have spent hours and hours and hours with china. it is truly, it has been my counterpart has that on many occasions, historic discussions. the way i have had a conversation with them is that last year, you imported 124 billion dollars. in agricultural products that compares to our 145, china's total imports are 124, and in a good year we have only done 20 of that. and i have made the point repeatedly that 20 out of 124 given our capacity to export agricultural products around the world, just isn't going to get it done. i mean you look down at the list here, we haven't sold them a pound of poultry since 2015. the were blocked in beef, since 2003. they are importing now over $1 billion a month in beef, pork and poultry in the month of april, our share that with $36 million. and that isn't retaliatory tariffs, we just do not have access. because of these structural and nontariff trade barriers these other things we have been talking about, with japan we are actively talking with them. >> when i was in beijing, about two months ago, senator shelby, talking about fentanyl and china trying to clean up but we were talking about trade and i call you and i said i was talking to your counterpart, and the one who does agriculture. and most familiar, with you. they wanted to trade with us, that is what they indicated, they want to be trading with a reliable supplier that has the best quality of the food in the world. and yet, here we are in a situation that i can be reconciled from 217, to 218, the value of exports from the u.s. to china decreased despite all of your efforts. 53% of the 19.5 billion to 9.2 billion. for nearly a decade, china has consistently ranked either first or second in export destination for our ag product however in 218 they felt a fourth. i guess my question is, i don't get, my question is, when negotiations with china conclude with their strong enforceable frameworks, what is the future strategy to ensure that the u.s. is able to regain a marketer that has been lost as a result of the current trade situation? >> the answer to that is we have to fix these structural issues and the document that we work on and have argued over every sentence is a sizable, we also have to diversify our portfolio and i have to tell you, that you know, we have one of the great public servant of all time in lawrence and here, the folks at fas they worked overtime we have a list of over 30 places that we have expanded exports, around the world, this is an all 24 hour day effort to expand in every possible place we can find including these conversations with japan. >> undersecretary mckinney as you well know, ag trade is critical to the farm sector especially in today's warm economy. i would say to my colleagues, i asked for your difference here, just to ask at least one question of the undersecretary, i know i am overtime. it creates jobs for all americans and much-needed demand for the crops that farmers produce, same time the global market pace is becoming more competitive. how will the usda help position u.s. agricultural in a way to retain market share and traditional markets as well as to increase market access to new and existing markets? >> thank you for your question mr. chairman. the first i would say that we are fully aligned with the three priorities that ambassador doud laid out on any given negotiation and usda was involved in all 21. the trips to beijing, them to hear and the digital video conferences and happy to report by any one time in the room we were to-one because we have the depth and glad always got a support team ustr, so getting those three right is our first priority and i think we have lived up to that. but, the creation of this position was intended and i hope you for filling that is to open new markets, hence the travel that we are undertaking. last week to columbia and it has been my second or third trip there. so we are pursuing all of these other markets so that we can develop new markets, diversify the portfolio over time. now to be sure there are choppy waters right here where there is a gap i do not want to deny that. but i hope we are setting the stage we are ustr, usda, with the support of ustr and others. so that we can look back and hopefully a few years, and be glad that we have diversify the portfolio and that is what we are doing. ustr and our team separately set up a list of countries he wanted to 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. what we worry about is to 19 has been tough, to 220, looks like it is going to be tough i do not know how long this goes on that would be seven years. below prices, and i understand that the previous bar there, at high prices. but, some farmers aren't going to make it. that is just the rub of it. senator stepanov. >> i agree with you and i appreciate the reaching out, i was just in south korea and vietnam and had conversations meetings with the trade officials in vietnam, there are opportunities, they are opening blueberries right now which would include michigan blueberries which i was very glad to have conversations about but certainly there is more to do but if the chairman is indicating we are in a very, very difficult situation right now. there needs to be economic certainty for farmers right now, i would like to start doctor hansen will give you a moment to speak your i want to ask you a question. regarding the second round of trade payments, because i'm very concerned that they are not going to be fair or equitable to producers. seems like there could be wide disparities between counties, so even farmers and neighboring counties that grow the same crop could receive widely different levels of support, it also seems that farming experience of 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 i'm concerned about the disparity between crops, you are no longer making payments based just on how retaliatory tariffs, we will clarify, what specific problems they are trying to solve, is at low prices or both?>> great questions. as you noted producers are looking for certainty right now, during a period of unprecedented uncertainty, for a number of reasons, some weather-related and of course as we have heard moving forward with a lot of potentially an official trade agreements and try to get those across the line i think we will also provide certainty to our producers. regarding the second round of market facilitation program payments, i think we did put out a press release a couple days ago that did answer some of those questions and of course, the rule is over at the budget management right now is a part of the interagency process so i'm somewhat limited in how can go in but certainly i will try to provide an answer to some of your questions and those we don't answer perhaps we can get back to you in riding, once were able to provide those. the main difference between last year and last year's program in this year's program and characterized as the timing of the program. last year's program, we were able to pay for actual production as well as producers that suffered losses last year were unhappy with that component of the program. week, of course, wanted to point toward crop insurance is the safety net for losses incurred last year. this year's program being developed. we want to make it clear to producers they should not look at media stories or what universities are saying, hypothetical types of program payments that may come out, and have that actually incentivize producers to change their planning decisions. we have been very clear the program is agnostic to the crop planted for the real crop component of the program. such that producers would not expect to receive, for example, last year's program payment for soybeans it was larger than the other payments. producers thought this year, they may be incentivize to plant for soybeans, expecting to get a larger payment. we certainly didn't want that to occur, particularly when we are sitting on record levels of soybean stocks right now in the countryside. we wanted to make the program, again, not market to the extent that we could, that is why we developed a county level approach for providing payments, a producer a county can receive the county rate, multiplied by acres planted of any eligible crops listed under the market facilitation program. the portion of the row crop payment system. of course, we have other payments for producers, of specialty crops. last year's program, there was sweet cherries and almonds in the msp component. a lot of other specialty crops were in the food purchase and distribution program. the secretary asks us to look back at last year's program to try to learn from that and determine which worked, and didn't work. one of the things we felt appropriate was to move some of the specialty crop commodities, tree nuts and fruits come into the market facilitation program component as opposed to the food purchasing disposition program. >> i'm going to jump in, in the interest of time and say on that particular point on the market facilitation program, some row crops that have had price declines are now moving into that. i want to say that specialty crops like michigan asparagus, that have 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. as far as i am 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 risk management, laying things out and now it seems to me the whole thing is thrown in the air by payments that have nothing to do with what we put together in a five- year farm bill. not just one year, now going on for a second round of payments. i know i'm out of time mr. chairman, but it goes to the money behind this. i want to ask our undersecretary mckinney, you are one of the seven board members on the usda commodity credit corporation using $30 billion in borrowing power to pay for both rounds of mitigation assistance. right now, the ccc has roughly 7.7 billion dollars left, before it reaches the $30 billion. how are you going to pay for $16 billion in assistance? 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 so many people, certainly starting with the president's secretary, but also many constituents, there is help that is needed now. we will take what we have and use that. of course, as we have to do every year or periodically, come back to congress because that is the way that works. >> does that mean that you are going to commit $7.7 billion now i wait for the rest? or you will commit $16 billion and hope we appropriated? >> right now that is at omb, we are working to that together. there is not an answer now but we would not presume anything if you all have not authorized that. >> certainly looking at key appropriators across from me that it really was not within the usda's purview to be obligating funds that have not been made available. >> i don't think funds have been obligated yet that are not there. we respect the role of congress, absolutely. >> thank you. senator fischer? >> thank you mr. chairman. ambassador doud i would like to follow up a little bit with the chairman's comments at the beginning of this hearing, when he was speaking about china, but also about japan. as you know, i am a family rancher. i know firsthand that we have to continue to improve on the efficiency of our cattle, and we have seen ranchers, as well as farmers, that are adopting this cutting edge technology in order to produce crops all across this country. technology on beef includes growth hormones. we are looking at china, where they have basically an import tariff that is 47%. on u.s. beef there is a 12% based tariff. we are looking at the 25% retaliatory tariff, 10% value added tax so the tariffs are bad enough, but then we see the chinese not allowing our animals in their country because of their restrictive policies. you told the chairman that we are talking to them. can you tell us anything more positive then we are talking to the chinese? how are we going to be able to address these nontariff barriers? >> centre, thank you for your question. i will elaborate as best i can. these are obviously ongoing conversations. >> i understand. >> first let me start with japan. we, all of us in the beef industry, know how important the japanese beef market is. that is a topic that, quite frankly, keeps me up at night. what i want you to know is ambassador lighthizer absolutely understands the importance of getting a trade deal in agriculture with japan, as soon as possible. and, these conversations are occurring, ongoing and that is all -- >> with the japanese it is a little different though from what we are looking at with the chinese >> that's right. >> we have seen the administration able to get the lifting of the bsc restriction. now we are looking at the restrict of tariffs that are there. with regards to the tpp. it is a little different situation. >> we are trying to say, even with our competitors in japan, with regards to china you are absolutely right. the way i described it is after 15 years, because of the restrictions on traceability, hormones, we can get a thimbleful of beef into china. they bought $5 billion in beef last year. $5billion. we have had hours of conversations about the senator with them. just, we can say these conversations have occurred is all i can say at this point >> you mentioned, and i appreciate your in negotiations. but when you say we need to diversify our exports, that doesn't help cattle ranchers, but doesn't help a farmer whose livelihood is based on work production while farmers may be able to, depending on where they are located, able to diversify crop. that isn't always that easy either. i hope you obviously will keep that in mind as you are working through this negotiation. both you and undersecretary mckinney have been in nebraska. you have heard our producers and concerns they have with this. 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 signed an executive order on agricultural biotechnology. you guys are now going to be task with creating the strategy that is going to address those unjustified trade barriers that we have. can you comment on how the administration plans to address some of those issues? in order that we can support the innovation we see domestically continue to move forward, when it comes to biotechnology. >> let me take a quick stab and lead convsation goes to usmca. for the first time we had a biotech component. what we are trying to help people understand is jean eddie crisper technology and the usda are working around the world to get countries where they need to be with regards to the use of technology in agriculture. >> thank you senator fischer. i have covered biotechnology in all its forms on every single government to government visit i've had that includes energy. usmca's language is a great start hence the importance of that. but we are also having discussions completely one-off. this gives us added impetus to make the statement we are working with like-minded countries, as we have in the past, but we have double down on that. was secretary pretty was in japan with the g 20, he pulled together a group of five, argentina, connecticut, brazil, ministers of aggravated commitment to double down. the world needs these technologies. we will address that. it is all of the above strategy. we have yet to miss an opportunity we have not covered that very topic. you're right usmca is the best and first start. >> thank you mr. chairman. senator smith? >> thank you mr. chair. i want to first thank all of you for being here today, especially my fellow minnesotan . senator roberts you started out by talking about the need for certainty and ranking members stabenow you talked about the challenges we have with chaos and unpredictability despite the best efforts, i truly believe those of you and this panel, when we were planning on this committee hearing i asked minnesotans to give me a chance of where they are on all this. i talked to farmers all the time. i want to read one letter i got . he said in part i'm not happy about tariffs that have been implemented, especially this year because of weather conditions. i have been at a loss as to what i should plant or even if i should plant a crop so late in the spring in poor conditions. having a secure market implicates decision-making in an already difficult situation. should i bother adding to burdensome supplies lose equity because the production costs over what the crop is worth? should i plant, which barely covers land written lose equity while fighting weeds all your? uncertainty of the current administration's policy to destroy all markets or tariffs, forms will farmers will lose money, time and peace of mind. that has been my experience so far. mr.chair i would like to ask permission to introduce letters into the record. and read the letter because my core value is we need fair trade policies the lift up american farmers and lift up american workers. i completely agree there have been unfair trade practices that have hurt american farmers and businesses and workers. i'm grateful for the work you have been doing to try to break through some of that. but, the problem is, you must feel like you're working with one hand tied behind your back right now. i am -- i can imagine what it's like. let me just ask one question. last week, i was in rock county, there was this latest threat to attack tariffs on mexico, removed in the nick of time. it probably took months the life of a lot of farmers trying to figure out what they could do next. what did you tell us about this large quantity of agricultural products the president says he has gotten commitments on for mexico? >> we are waiting to hear the specifics on that let me just say we at usda have tita, as we have always tita opportunities we could use to fulfill that. until we get some specifics on that, we are waiting. you should know we have a very good relationship with our friends at the mexico department of back . we have been discussing to lay those opportunities out. >> i know you do and i appreciate what you said about the importance of good relationships, long-standing relationship at the root of good trade which is why i'm so disturbed. the reliability of america as a trading partner is a challenge we are dealing with here. i hope there is an agreement on large quantities but i will believe it when i see it. this raises something i am personally very interested in. and has to do with the possibility of expanding trade into cuba. something my colleague, the senior senator from minnesota, senator klobuchar has worked on . cuba is a perfect trading partner for the united states in so many ways. that they are good at, and what we are good at, is a perfect match. we don't grow a lot of chocolate in united states in a need corn and beans. yet again, just last week, the president re- upped an additional barrier between the united states and cuba. i went to cuba when i was lieutenant governor to lead the exact trade missions you are working on undersecretary mckinney to expand markets. could you tell me would you agree the president's ban on additional connections between united states and cuba makes it harder to build these relationships we now know are so important? >> thank you for the question. i would answer this way. there is agricultural product going to cuba >> there is, but so many barriers, no credit access. you know this. >> there is no credit access to the u.s. but there is credit access to other areas for example canadian banks. check this morning, there is still agricultural product flowing. we haven't checked with everyone, the beauty of this you all created, to the farm bill, the opportunity to use market access program funds to go there. we had already closed out map grants when the farm bill past but we are preparing, if that opportunity creates itself to allow folks to do that. we are aligned in that regard. >> we do not agree this additional barrier is not helpful to the cause of expanding access to agricultural products in cuba? >> i won't say that because trade is still flowing. so far as i know it has not slowed. i'm checking on that. the larger issue is we have, at one time venezuela was the number 1 export market in south america. i hope some of that conflation of what cuba is doing with venezuela might provide for an opportunity someday when the gates open to go back into venezuela. i think there is a long-term play there, ma'am. >> thank you. amount of time. appreciate the work you're trying to do to open markets and the work you're doing ambassador doud to nail down these incredible difficult negotiations. i feel so strongly one hand doesn't know what the other hand is doing. i think one hand doesn't know what it is doing itself >> thank you mr. chair. >> thank you senator. senator brown? >> thank you mr. chairman. interesting to always listen to these discussions here. in the short time i've been here they get politically charged quickly. i think of any of the members on this committee, one of the few actually involved in farming. a been involved in it for 40 years. is a poultry producer from the late 70s to tree farmer and actively involved in row crop production. all i can tell you, as a farmer, and 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 present. this has accumulated over many years. when you look at the total amount of importance for instance that china takes and how small a share our would be to them. that is typical across the world. there are structural restrictions to agricultural products. everyone knows from the farming side that it is the most protected part of the economy across the world. i want to applaud the administration for finally addressing these issues where yes, it will incur short-term pain in running the business. the other thing i have done i've never found where you are going to go in the right direction if you do not address the issues for long-run betterment and you have to entertain a little short-term pain. i think that is what we are going through. the problems facing agriculture goes so far beyond tariffs, when 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 thank goodness you are finally tackling issues to open up these markets. china is alluring because it is large, it has so many people. i think one of you said basically of the 145 billion or so that they import, we get just 20-25 billion somewhere in there. is that correct? >> senator, the reports last year were 124 billion. on a good year we do about 20 last year we did about nine of that >> that has been the dynamic for years. the tells you exactly what one country, somewhere down the road, the biggest potential importer of everything with their population and fake keep growing as an economy. again, points out this is all laid on the doorstep, before 2016. anyone here, any politician, anybody involved with policy shoulders the blame. thank goodness we are trying to rectify. you think there might be in another round of questions which i will stick around for. i want to throw this out there for you to think about. acreage expansion, i think has occurred more so over the last decade across the world than at any other time. competition, the other variable in any business, my logistics business, distribution, farming, competition is important. it looks like our competitors want the best of both worlds. they want us to buy from them and they don't want to take any of our products. i want you to think about which countries, including the ones in europe and others, that are the culprits that are hardest to deal with. and the other thing i want you to think about with the our own industry. when it comes to, normally in a pickle like agriculture is, struggling to sell which you produce, you find new markets. and, in agriculture, biotechnology was talked about earlier. 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 we are not dealing with what everyone else around the world is going to start producing and selling themselves, which is corn and soybeans? it is our ticket to sell more of what we produce through the higher tech end of the biotech industry >> senator i will try to answer that and seven seconds. first of all talk to dr. johansen about the strength of the u.s. dollar relative to other countries, particularly the brazilian real and competitive factors there. we think about ethanol and wheat and value-added opportunities around the world every single day. the place in the world that gives us fits, without question, europeans. there actively fighting us every step of the way with regard to the use of technology. >> noted. >> anyone else want to comment on that? >> he brought up a really good issue, a lot of expansion of acreage globally particularly in the high praise years about seven years ago the chairman referred to in particular in south america we saw a lot of expanded acreage in brazil and argentina, actively competing with us right now. they are big adopters of tech as well. that's a good thing. as ambassador, should the undersecretary can highlight, we are continually facing a different level of standard from the europeans who argue contrary to improving food security, actually depressing food security globally. >> senator i want to respect you are in the chairman's time management. i will come back and answer that later. >> recognize for additional 5 minutes >> thank you chairman. go ahead. >> we are somewhere between seven and 9 billion on the planet 7.3 on a weighted 9 cents a ten by 2050. we have to use every single tool to address that. we have for the last many decades, i think by and large technology around the world is still being adopted, but there are now headwinds and i think ambassador doud set up very well, led by europe, with objections. and so it is a constant battle we have to face. technologies of all sorts. we talk about biotechnology goes well beyond that. many of those from your own experience in indiana but this is our cool to continue to press for these kinds of technologies. the way we do that, in early july i will be in geneva for the meeting where we talk about scientific standards for pesticides, biotech, food additives. the list goes on and on. it is the world against europe in many cases to fight to keep those very rigorous scientific -based standards, rather than default to say a region of the world and their view of what science is or should be determined. that is just one. majestic at working wto, we support them and data analysis. the list goes on so i won't go through ad nauseam. we have to use every single one of those and that is why the attention we are paying to international organizations soon we will elect a new director general. that is a very, very important election. they have strayed in a major way from considering technology. take it out in many cases. these are things we are trying to do around the world. >> thank you. keep it up i think what you are doing needed to be done along time ago. if we don't fix it now it is just kicking it down the road. most farmers know that we need to go through some transformation and are happy you are doing what you are doing. i want to finish up with this, i said at the last time. when it comes to helping farmers , the thing i have noticed that has been seldom talked about the high cost of production would be the high cost of variable inputs. all i can say is from 09-13, when we had great income, it seems like the cost of input mysteriously went out. we are now dealing with many huge corporations were used to be local suppliers and i am 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 mckinney and media, from dr. johansen. where do you think the responsibility of the industry is to help farmers get through this tough stretch? do you think it is doing enough to where everyone seems to be okay at the corporate level? we buy all of our input 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. you should know we talked to the industries of all types a great deal. i think they usually make their way elsewhere. everybody has responsibility. the best thing we can do is work on these nontariff trade barriers to help them keep their cost low so they don't have to pass on cost which is the norm. as you know. the time ambassador doud and his team and my team spent on biotechnology with china, frankly so many other countries, as we make our way around the world is an enormous. we think that is the best way we can do that. we as government are not going to get involved in pricing, there is respect for the business community out there >> may be jawboning >> we done that. that is what we are trying to do to try to get rid of nontariff trade barriers that cause disruption in costs of all sorts. >> of course we look at costs going up every year. not universal, we have seen fuel prices come down since the high watermark a couple years ago. that is a benefit to producers. by and large we are more concerned about making sure we have the ability for producers to get a good price for their crop, continually linked to trade but also to lowering transportation costs. for example wing of the mississippi system right now is under siege from the water coming through, slowing things down. lower costs on the real side is a benefit. something we are looking at. of course on the input side from the chemical companies, there is consolidation. economic literature points to different things regarding whether lower prices on the one hand but also reduces competition on the other. something we are continually looking out. >> everything in the kitchen sink because farmers are truly struggling. >> senator brown? >> thank you mr. chairman. i can't wait until i need the extra 5 minutes one of these days. >> thank you mr. chairman. >> senator klobuchar and i've been on this committee a combined quarter-century and i don't remember our ever getting an extra 5 minutes. >> may be the relationship with the chairman. i'm going to explore that. >> i have milked more -- >> of the chair a second to respond? >> never mind. thank you mr. chairman. i have used 30 of my precious seconds of. i can't count the number of people i've heard -- >> you just take 30 seconds of your time >> i can't count the number of people i've heard saying how important it is that we have certainty in business and farming. we know agriculture is an inherently risky business. we have seen farm income tenure lows, commodity prices declining, the administration continues, as you know, you probably don't want to say this, but continues to inject more uncertainty into american agriculture. the president tells farmers to trust in bit everyday form bankruptcies increase. another small dairy closes, farm life family farm sold to out-of- town of customer. i want to share three or four taglines from an article written for the toledo blade, which is the paper of record in much of rural northwest ohio. as of june 2nd, by the author of the piece, only 33% of ohio 's corn acreage, 18% of the state's soybean acreage had been planted. by this time of year at least 90% of corn should have been planted, 79% of soybeans should've been planted based on the most recent five-year coverage. farmers will tell you that years before this they would go to the fields earlier typically. these numbers are worse than they've been over five years which is worse than it used to be. ohio was down 61% from it most recent five-year average for planting soybeans as of june 1st. as farmers will tell you, even if the forms dry out enough to plant corn, another week or two the growing season so compressed smaller yields are inevitable. wind farm murder says i have been farming 36 years this is the first year may not have 1 acre of corn. my questions are this. you can understand my concern with secretary pruitt's announcement that market facilitation payments won't apply to and planted acres. we've seen the problems get worse and worse with climate issues. usda provided a list of crops that we need to plant, unclear whether they could be planted for cover or after the typical late planting period. from the number of inquiries my office gets from farmers, sitting on combines waiting for water to diss subside. they want to make decisions -- two questions if you would answer the use. will usda provide flexibility for farmers to plant later than normal for cover to be eligible for mfp? and similarly, hay and forage is expected to be in short supply due to the wet weather. for federal crop insurance provider flexibility to allow for earlier grazing or harvest of forage and hate for cover crops? >> one of, i mentioned earlier, to the ranking member's questions we didn't want to affect decisions with the new program. of course, complicating that is the situation you mentioned. we are in a very late planted, late delayed planting and a cool, wet spring affecting much of corn as well as other commodities across the united states. we are behind in wheat, rice and soybeans as well. all of that will contribute to likely higher than normal -- the crop insurance program does anticipate for that plan. there are conditions and provisions available to producers that are unfortunately in place. again, as with last year's program, we wanted this year's program not to affect not protected by crop insurance the project plan eligibility requirements remaining in place. we have been asked to look at the two components you talked about with respect to late plant and paying and grieving. those are components of the program we are continuing to evaluate over this period under which the rule is still undergoing changes at the office of management and budget. i would also point out that the president signed the supplemental disaster bill which calls out prevented plan in it. there is interaction as well with the program to make him out following the, again early in its development. authorized by everyone here for the disasters is was on 2018 , hurricanes and wildfires as well as 2019 prevent plant issues. i don't have any hard and fast answers to your question is certainly willing, as i mentioned to the ranking member >> we will be in touch. that is really important, particularly northwest ohio agriculture. i will ask another question but because of time i will ask this to dr. hanson about lake erie. because of the witness, late planning and all that is happened, algae blooms are likely a major problem come july, august and the western basin of lake erie, only 30 feet deep in contrast with the lake, lake superior senator klobuchar and senator smith look at, 600 feet deep so we know the vulnerability with the number of and planted acres in the western basin. wonder if usda is considered allocating conservation funds to cover crop plantings or create buffers in places like ohio. you can answer that and writing too. >> thank you senator brown for asking the question on the mind of every member. senator ernst? >> thank you mr. chair. like to thank the witnesses for being here today as well. you have been great advocates for our farmers. i really appreciate that very, very much. right now, there undergoing the perfect storm of circumstance. low commodity prices, loss of access to foreign markets due to trade disputes and very wet, look at nebraska, look at iowa, very wet conditions due to a wet spring and flooding issues. really time for the administration to bring together these true deals. we would love to see them done soon. we want them done right but we would love to see them done soon. farmers really need a win. ambassador doud if i could start with you please, first off i believe i will farmers stand behind the president. offered many over the course of the 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, at the end of last year i had one farmer come up to me after a meeting. he made the point that he understood why the president was doing this. is that i don't understand why we don't have a president that didn't address this before this one. this has been going on for such a long time and president trump is standing up to the chinese and bad practices. that 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 they are going through calling their herds. the problem is with the ongoing trade dispute china has 50% retaliatory tariffs on our u.s. pork exports and the additional duty has meant a loss of about $8 per hog or $1 billion per year to u.s. pig farmers. all of our i will farmers want those free markets. what is the path forward with china and when can i will farmers expect normalization in our markets? >> senator thank you your question. there is no question the african swine fever issue is truly remarkable in terms of global implications. i would say in regard to paul week exports to china the biggest hurdle is the structural issue. something that has international acceptance, maximum level internationally. everybody uses it with the exception of a couple of exceptions here and there but china doesn't. we have spent hours talking about this. i would also point, quickly make the point in terms of certainty, the first thing we can do is pass usmca. from there we work on japan and china and get these things done. in terms of historical issues, there has been work on china historically and we recently won two of the biggest cases in the history of agriculture against china. >> i appreciate that. i think the usmca needs to be done as well. we need to continue encouraging house members to be supportive of that action. it is very, very important to the folks in iowa that i talked to. fairly briefly, usmca would create a huge, economic growth across united states and many of our industries. and would secure a top market for all u.s. agricultural commodities. there are many achievements within usmca that don't get talked about. we talk about tariffs, we focus on tariffs. certainly, for you, under secretary mckinnon, if you would address some of the improvements that exist within the usmca that we don't necessarily talk about. things like sanitary standards in biotech. and you speak on how those issues are being addressed in usmca and talk about the wins we are necessarily talking about? >> sure. we talk about dairy access, equities across the board, more poultry access. i know how much poultry you have in your state. those catch a lot of attention. and said publicly many times the rewrite of the sanitary chapter may be the greatest gift out of usmca. not quite a cut and paste into other trade agreements, but a great starting point. that has been the soft underbelly where we have not seeing free, fair and reciprocal trade over many years. i think that's perhaps the greatest gift. i would talk about bioscience, biotechnology. that has been an enormous boon to productivity, quality improvement around the world helping african farmers, cotton farmers and media, etc. a new chapter that can also be used as a starting point in other negotiations. i still think the biggest is the message, the passage usmca will sent to the world. if we don't get this done, we are in deep trouble in terms of other negotiations we seek to do. this is a good deal. we must deliver on this. two think. >> thank you very much thank you mr. chair. >> senator klobuchar? >> thank you mr. chairman. my state is the fourth largest bag exporting state in the country. i appreciate the work you've been doing during difficult time . many of us here were relieved that the administration did not end up imposing the 5% tariff on mexico is threatened. but the approach of using tariffs in response to nontraded issues is concerning and could open the floodgates to widespread use of tariffs to potentially settle all kinds of potential policy issues. may be one of you, could answer this. where does the administration draw the line on the use of tariffs for nontraded ends? >> sender i would say that in my time you wash i have never seeing a president create more leverage out of thin air than this president has. >> umpqua we learned later was the agreement had been made a few weeks before the tweet went out. they can leave that to the history books i guess. my first question along the lines of the work you're doing with the market facilitation program, which i appreciate, would be, this is good in that farmers need the help of one of the things i heard from a number is if this goes on longer and longer as we try to get a china to a point of agreement, is a lot of countries that are buying soybeans now from other places are getting longer term contracts with them. it's going to be harder once there is an agreement for people to get back in the market. i don't know if that is you, dr. johansson or anyone that wants to answer that, if that is true with your university of minnesota degree? >> i will comment on this. i think -- certainly we know to a degree, trade is fungible. soybeans we typically export to the chinese in our season and south americans export during their season. it makes for reliable trade for the chinese. they have to renegotiate their contracts. looking at doing so right now. we get a good trade deal him we will go back to providing them with the quality u.s. soybeans we have a good transportation system to get in there through the pacific northwest. >> so in order to meet the supply they are going to other countries they are doing short- term contracts right now? >> i imagine they are likely entering into a number of contracts short-term and long- term. as we have seen with us as well as other contracts they are able to break them easily if they try to press other wells. >> market solicitation program. when will the payment rates that are eligible be released? >> the rule right now that once it is down to omb we will put the rates out there and start sign up as soon as we can. it takes a couple weeks to get to the process and we are making adjustments as we discussed this with folks over there. >> i think it has been discussing for some areas are hit harder depending on where the soybeans are going, hit minnesota hard because of 60% of our state's soybeans are shipped to the west coast by rail, will you be giving consideration to regional shipping disparities within each commodity for the second round of facilitation payment? >> great question. that you asked last year as well we will continue to look at the facts right now we've looked at the basic facts with upper midwest with the mid-w est and other we have seen diminished. of course depending on how negotiations go we may see some above average impacts as we head into the fall. we will 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 opportunity right now we know the threat of foreign animals, the potential impact on farmers can hurt us here? or, it can help us if it happens in another country and of course we would rather not have this happen at all. it eventually comes to us make sure is in i have worked hard with senator cornyn to include a vaccine bank in the last farm bill. and outbreak of african swine flu has decreased their swine production in china may lose more pork than u.s. produces. dr.johansson, do you believe u.s. pork producers can 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? >> there is a lot of uncertainty about how bad the outbreak is in china right now. there is widespread speculation it's 20, 30 even greater% of the 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 or without tariffs, either behind what other countries are sending them or get in as well. of course we would be able to sell more products into china. >> and ambassador doud, are turkeys included in the negotiations right now with china? we are number 1 for turkey in our state. don't laugh. >> center, everything is on the table. we have had consensus with the multitude of commodities. >> very good. and i just wanted to add, mr., mr. chairman so i can give you the extra minute, just to thank secretary mckinney. you recently led a trade delegation to columbia and i know tom peterson was there, agriculture commissioner enjoyed the trip. >> a very big group for minnesota and we enjoyed having them. i think they left with opportunities in mind. i should as add you race turkey turkey has found its way to india of all places. this is a result of the wto suit and we are thrilled with that. >> thank you all. >> coop, you are up. >> almost tiny mr. chairman, thank you. and thanks for having us here. let me just say the our panel thanks for being here and thanks for the work you are doing but remind all of you that our farmers and ranchers would much rather get a check from selling their products than they would from the federal government. my concern in all of this is we are losing global market share. that is why i think it is really important we close some of these trade deals out. this hearing is designed to provide certainty to farmers and ranchers, with specific focus on trade. when i travel in south dakota, what farmers and ranchers asked me, winner these trade issues going to be resolved? i am asking you, can you give me and our farmers and ranchers, a timeline regarding china? >> mr. dowd? >> i understand those concerns and believe me, they are talked about every single day. recirculate every single day what's going on. i think in terms of the china discussion i don't know is the answer. we have to see the meeting i believe, there will be a meeting that occurs between president trump and president xi towards the end of the month. i think that is our next line of demarcation to see how this is going to go. >> can you give us a timeline at all regarding japan? , bilateral deal? >> i cannot. i can only tell you the conversations with regard agriculture and trade between the u.s. and japan are ongoing as we speak >> given the administration's agreements like ttp in addition to the two we just discussed can you share the status of any other trade agreements the administration is pursuing? . >> in addition to usmca, we have also, through the tpa process here on capitol hill, indicated u.s. interest in negotiating with the european union, the u.k. , and the u.k. i don't know what the brexit process is going to be, obviously the u.k. is something that we are taking a keen interest in. the other part of the world is of enormous interest is africa. we all know that there are other countries in the world taking an interest in that as well and i want to assure you, senator, 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 u.k., is there anything more at this stage? are we talking about very embryonic type discussions? or are we actually in a process of negotiation with any of these potential trading partners? >> obviously with the u.k. we have to wait and see what the brexit timeline is. >> how about the eu? >> with the eu i will tell you quite frankly that they have been very frank in their interest in saying no agriculture. our point has been very simple. there is no way to come to congress and do a deal that does include agriculture. are we going to rectify this? >> we support that position. but i i think there is great potential, obviously the china, great potential with japan and again, if the eu would drop some of their tariff and nontariff barriers and really seriously enter into negotiation on agriculture, that also would be a great market for agriculture. i would encourage you to understand the sense of urgency out there in farm country. these are really tough times. not only now do we have all the trade issues, but we've got weather piled on top of that in addition to chronic year after year, year over year low commodity prices. and producers increasingly operating below the cost of production. it is a situation we can't sustain to keep these farmers a business. in that vein, i quickly want to touch on the mfp program and the june 10 usda press release, provide, i quote, if you choose to plant a cover crop with potential to be harvested because of this year's adverse weather conditions, you may qualify for a minimal amount 2019 mfp assistance. must still comply with your crop insurance requirements to remain eligible for indemnities received quote. the question is, if you are eligible for a minimal amount of mfp assistance, why would usda make a more equitable mfp payment to producers comparable to the mfp payment paid at that producer had been able to plant and harvest a crop? dr.hanson? >> as i mentioned earlier, we were trying to balance, trying not to incentivize discretionary decisions. you want congress to plan for their operations for what works best for them given the current prices we are seeing out there as well as the current economic conditions they are seeing in their operations >> we are telling people have it planted >> right. as with last year, we are viewing the current situation with respect to prevent plant is having something that i in large would 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 the mfp payment for that planting. by and large, their incentive payment will be coming from the recovery payment or safety net coming from the prevent plant, not from mf he, the market facilitation program is obviously designed to address issues not weather issues. again, as appointed earlier, there is also the disaster bill we are looking at, the supplemental disaster, again another balancing act we are undergoing right now. >> figure out how to spend the $3 billion in that end, that supplemental? >> the supplemental has, as you are aware, the prevent plant provisions added to that were added after the amount of the supplemental had already been determined. of course is the secretary has pointed out, the hurricanes and wildfires from 2018 that certainly would -- intended for being compensated to the extent that they affected producers in the southeast in terms of hurricanes in california with respect to wildfires and other disasters as well. volcanoes 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. >> the equitable. thank you. >> mr. chairman? >> senator hogan. >> thank you mr. chairman, thanks to all of you for being here. also mr. secretary, to you and the entire crew here, as well as everybody at usda, and the administration, thank you for moving forward on the mf the second round. we worked hard on that, as did others and we appreciate a response from the solid. i think the questions and comments by my distinguished colleague from south dakota highlights the need for that in farm country. it's a tough time so we are very appreciative of that. dr.johansson, i want to learn from round one and do a better job in round two, just like the senator was talking about. one of the questions senator klobuchar brought up is an important one. she termed it in terms of regional differences. i talk about it in terms of basis. as you know brought this up last go-round, please, a new effort to include that in this mfp? it's a very important issue. she talked about 60% of her soybeans going to china. in north dakota we send 1.5 billion dollars worth of soybeans to china on a regular year. didn't happen this year. tells you how there are original despairs is which costs farmers a lot of money >> yes. the basis of facts certainly something we did note last year , and you had asked about it. we continue to follow that. i think that is going to be also another key piece of information that the secretaries going to consider as we move forward with the implementation of mf he. of course there are other key considerations as well, some of that includes the progress we make with china on reaching a deal and of course he made it clear. >> in subsequent rounds? rounds? and 3? >> that is correct. just as an example of course we don't include the tariff impacts that wouldtara impact that would have been occurring under the tariff and those have been removed from our calculations since we have reached a deal on that and component and looking forward to the basis we looked at that right now and the look within the average for this time of year and major basis we are likely to see occur and we will continue to follow that to see if they do fall outside that range of average that you expect given the size of crop and we will certainly keep that ability to adjust the program as we get more information. we are very aware of this and producers in those areas are susceptible to more ire impacts from the component depending on which crops they produce and what they are selling them to. >> i have been bringing it up and i'm not going to stop so i don't have an answer for you right now i can give you but it is something we can look at and respond to.>> remember this is a lot of crops that move with those exports even if they are not fully exported. that is an important factor. and you are not giving them the assistance. we are very aware of that and we think the program that we have designed will help offset some of that criticism we got last year.>> i would like-what are we doing prior to it with china on facilitating and negotiating with china leading up to it on trade. >> we are heavily engaged. >> we are heavily engaged about my level. on the agricultural side 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 and? can you get a true deal with japan? can you get are presently soon because if you can't do that we can pass this and put pressure on china. we have to get some of these other agreements as a way to put pressure on china and a trade deal with and they are a huge economic horse that would make a huge difference. how are you doing there? >> that is how you would draw up on the chalkboard. the secretary was over there. good job on that for the cattle. i would think-it would be a real shot in the arm to get that and go ahead and talk about how important it is we get them across the floor and we would like to see it and talk about how important it is for our farmers.>> you said it very well. usmc a is the template for the rest of the world and we must get that right and we are here to help you and what other information you need to move that through. it is a good deal and it is done. >> you create momentum one step at a time. we could move fast and with japan. to the extent that we can access those go-ahead, whoever wants to take out one. >> we have received that comment and we are looking at flexibility as to in terms of that date and we don't want to affect the provisions per se but we have some flexibility under the supplemental disaster and we are considering that. that is helpful and we appreciate it. it is a cost-effective way to get the livestock i somehow and they are part of the system. bucket clearly, we are all focused on the key countries that you and so many are focused i begged you not to forget these other countries. you have some of your way a lot of them. i had to members of your community talk about the joy of having gone to guatemala all places last year and that has recovered a lot of the sales they lost in india. we are, we will focus on these major crops because they are the here and now. i want to make sure you know we are making progress in a lot of these other countries. >> what india is doing to block them out, i have to say it will be a tough nut to crack. we were over there for the 75th anniversary and you look at their small fields and all of that and the idea that they could go head-to-head if they didn't have their restrictions in place. you realize this is a different world. at the end of the day, no one can compete with our farmers and ranchers if we get a fair shake. thank you for your great work. we appreciate. >> i just have one closing question and i think this is important because you are talking about the wto at different points and after the first $12 billion and trade mitigation was announced the trading partners took notice of that and in 2018 our country emphasized the aide was one time, short-term assistance that was not expected to have production effects because it was announced when commodities have been planted or produce. given the timing and the size of the recently announced 16 billion, are you confident that we are abiding by the commitments and is there any possibility we are creating future problems for our farmers and ranchers? >> i think you for your question and it is an urgent one and the answer is they have ongoing conversations about this and at this point i can assure you that we are we will and are abiding by the commitment. >> that will be interesting to watch. q. >>- >> i think we are finally on now. i want to thank you all three for your commitment. these are tough times and these are tough jobs you have put your shoulder to the wheel and worked very hard to accomplish things at a difficult time. that is just where we are. most unfortunate. to my fellow members, we ask that any additional questions be submitted by today or next thursday. committee is adjourned president trump today sat down with c-span for an interview at the white house. he talked about his legislative agenda, the democratic presidential field, his recent comments about elijah e. cummings and plans for a possible second term. watch tonight on c-span at 9:55 eastern. if you want more information on members of congress ordered the congressional directory available online. the last commission on civil rights recently hosted an event on early immigration policy and the refugee crisis of the 1930s and 40s. we will hear about how the immigration act of 1924 impacted the crisis and how racism and anti-semitism and phobia played a role in limiting the arrival of james. -- use in america. this comes to order. the meeting takes place at the commission headquarters

Related Keywords

Caspian Sea , Oceans General , Oceans , Australia , United States , Brazil , Beijing , China , Minnesota , California , Connecticut , Mexico , India , Ghana , Iowa , Trenton , Indiana , South Korea , Japan , Argentina , Vietnam , Republic Of , Cuba , Togo , Canada , Guatemala , Michigan , Nebraska , South Dakota , Geneva , Genè , Switzerland , Kansas , Ohio , North Dakota , Lake Erie , Venezuela , Turkey , Americans , America , Canadian , Chinese , Mexican , Minnesotans , Minnesotan , Brazilian , Japanese , American , Ted Mckinney , Lyne Heiser , Greg Doud , Tom Peterson , Elijah E Cummings ,