SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOCREVIEW OF THE 1997 CONSERVATION RESERVE PROGRAM CONTRACT ANNOUNCEMENT
WEDNESDAY, JUNE 11, 1997
House of Representatives,
Subcommittee on Forestry,
Resource Conservation, and Research
Committee on Agriculture,
The subcommittee met, pursuant to call, at 9:30 a.m., in room 1300, Longworth House Office Building, Hon. Larry Combest (chairman of the subcommittee) presiding.
Present: Representatives Barrett, Doolittle, Pombo, Smith of Michigan, Everett, Lucas, Chenoweth, Emerson, Moran, Jenkins, Cooksey, Ewing, Dooley, Stabenow, John, Peterson, Clayton, Minge, Pomeroy, Baldacci and Berry.
Staff present: Dave Ebersole, senior professional staff; Russell Laird, director, Subcommittee on Forestry, Resource Conservation, and Research; Callista Bisek, Wanda Worsham, clerk; Monique Brown and Anne Simmons.
OPENING STATEMENT OF HON. LARRY COMBEST, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS
Mr. COMBEST. The subcommittee will come to order.
Good morning. I want to welcome everyone.
I would like to thank the representatives of the Department of Agriculture who are here to respond to questions. While we may have some critical questions later, I want to say a sincere word of thanks up front for all of the USDA personnel in Washington and all in the State and county offices around the country for the countless hours of hard work that went into implementing this new program and conducting this sign-up. As a former county USDA employee, I know how much work goes into something like this, and I know it too often goes unnoticed, so thank you all very much.
Page 2 PREV PAGE TOP OF DOC This hearing is being conducted to examine the Department's recent announcement of the acceptance of 16.2 million acres into the CRP following the 15th general sign-up. This is another in the series of hearings that I had promised we would conduct to ensure that the views of the members of the subcommittee are heard as USDA implements the CRP, which we reauthorized in 1996 farm bill. Over the last few months, there have been and will continue to be considerable debate over the Department's decision concerning the future of this program. It has been said several times that this is the most successful environmental program USDA has conducted and one of the most important environmental programs government wide. We could go back through all of those praises of this program, but there are probably plenty of questions that Members would rather discuss.
While the Secretary has committed in general terms to conduct another sign-up in the fall of the year, we do not know what to expect from that sign-up. My main concern is that we are leaving a lot of environmental protection on the table by only reenrolling 16 million acres into the program during this sign-up period when the budget authority is there to do much more. However, there is no compelling reason why we should wait to correct this inadequacy. A letter was sent to the Secretary yesterday by several Members of Congress, both the House and the Senate, urging him to accept at least an additional 3 million acres under the terms of the 15th sign-up.
I look forward to discussing concerns and questions and would recognize the gentleman from California for any comments that he might wish to make.
STATEMENT OF HON. CALVIN M. DOOLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA
Mr. DOOLEY. Thank you, Mr. Chairman, and I, too, want to thank the people at the Department of Agriculture for the efficient and expeditious way that they conducted this CRP sign-up. I know that there is a lot of concern on whether or not this was going to be able to be completed in a timely fashion to allow people to make the appropriate management decisions for the properties, and I think that you had the ability to silence the critics with the way that you carried this out, and I appreciate that.
Page 3 PREV PAGE TOP OF DOC I am also pleased that it looks from some of the initial information that we have been provided that the reforms that the USDA incorporated in the CRP are, in fact, delivering greater environmental benefits to the country and doing so at a far less cost to taxpayers, and that the 16.2 million acres that you enrolled are going to be associated with an 85 percent increase in environmental benefits. And that we are enrolling this land at a 21 percent reduction in the cost per acres, I think you have to be complimented on that.
I am a little concerned about the letter that was delivered yesterday. I think USDA should be making decisions that are based on how do we maximize the investment that taxpayers are making and achieving the greatest environmental benefit. I am concerned that if we follow the dictates of the letter that was sent to you, that you will be compelled to enroll land prematurely. That will preclude the opportunity in future sign-ups that are scheduled to enroll that land that could have, again, that greatest environmental benefit.
The obligation of the Government, the obligation of USDA, is to make sure that you are getting the maximum return in terms of environmental benefits at the lowest cost to the taxpayers, and I think you've done that in this first sign-up. I think you enrolled a responsible amount of land, and I encourage you to continue down that path.
Mr. COMBEST. Without objection, all statements from Members would be entered into the record.
[The prepared statement of Mrs. Chenoweth follows:]
STATEMENT OF HON. HELEN CHENOWETH
Mr. Chairman, I want to thank this committee for holding today's hearing to review the 1997 Conservation Reserve Program contract announcement.
The Conservation Reserve Program is a highly successful environmental program undertaken by the Federal Government. Over the course of its existence, the CRP has substantially contributed to soil erosion abatement and improved wildlife habitat and air and water quality.
Page 4 PREV PAGE TOP OF DOCAs such, I believe continued full utilization--19 million acres--of the CRP is necessary to ensure that all environmentally sensitive acres continue to enjoy the program's protection.
I was very upset to learn of the administration's May 22, 1997 Conservation Reserve Program announcement that the program will not be fully utilized in the 15th sign-up.
I believe the administration's 15th CRP sign-up is inadequate, unacceptable, and fails to completely serve farmers' environmentally-sensitive lands. To enroll only sixteen million acres in the CRP's 15th sign-up breaks faith with America's farmers and the environment.
Additionally, it makes me question the administration's commitment to the goals of conservation and a healthy farm economy.
Mr. Chairman, wheat acres account for about 28 percent of the land currently enrolled in the CRP. Under the CRP final sign-up, wheat acreage in the program may decrease by about 3.4 million acres. This is unreasonable and my Idaho farmers and ranchers will not tolerate this.
Secretary Glickman has pledged, and I quote, ''this [the 15th CRP sign-up] would be the first step toward a new CRP that would provide more environmental benefits over the next 10 years than the old program did over the last 10.
Mr. Chairman, that pledge has not been fulfilled.
I insist that Secretary Glickman revise the May 22, 1997 Conservation Reserve Program sign-up to include a total enrollment of 19 million acres for this sign-up period--the number of enrolled acres provided for under the President's budget.
Additionally, due to the complexity of the 15th CRP sign-up and the problems in calculating Environmental Benefits Index criteria, I urge Secretary Glickman to allow the Farm Service Agency to work with interested producers to revise their existing bids to accurately account for the environmental benefits of their land.
In closing, while I appreciate Secretary Glickman's decision to hold another CRP sign-up late this fall, I believe such a sign-up would not be timely.
Page 5 PREV PAGE TOP OF DOCMr. Chairman, in the interest of preserving the viability of this important environmental program and in keeping with Secretary Glickman's commitment to CRP, I urge the Secretary to act immediately upon my requests.
We must ensure full utilization of this very important conservation program. Enrolling 19 million acres during the 15th sign-up period makes environmental and fiscal sense.
Mr. COMBEST. Are there any Members that would care to make a very brief statement?
Mr. PETERSON. Mr. Chairman.
Mr. COMBEST. The gentleman from Minnesota.
STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA
Mr. PETERSON. Mr. Chairman, thank you. I, too, want to acknowledge that they got the work done. And I was one of the skeptics. But I think it needs to be pointed out that, at least in my area, a lot of the people didn't get the kind of information that they needed from their county office. I know that is not your problem, but because we rushed this through, I have been out and actually talked to producers, and there were people that did not get the information about how they could get a higher EBI score and didn't even know about the situation.
One of the things that we are concerned about in Minnesota, Mr. Smith made a comment here when we had this oversight hearing that there wouldn't be any big shift in land that was in the program, but there was a big shift in Minnesota. We have been analyzing that. And some people think it is because of the way the conservation priority area was established. But as I analyze that, that is not the reason, which to me the main reason is the way they counted wildlife benefits and also the way that you did the cost part of this equation. And I think, first of all, the 200 points was excessive and I think skewed this in a way that does not make sense around the country, No. 1.
Page 6 PREV PAGE TOP OF DOC And, No. 2, the way it appears that this worked is that the lower price land you had, the better chance you had to get in. I think there should have been a factor in there that it should be relative to what the land in your area was worth. So if you had $70-an-acre land, and you bid at $50, you should have been given a higher priority than somebody that was in the area where you had $30 market value land, because what has happened is if you push this land over into places like North Dakota and Montana, where they have low value land that it was in grass, and it wasn't under any threat in the first place, and taking it out of places like Minnesota--and I think we did some real detriment to the environmental benefits.
In Minnesota, you have had testimony from all the wildlife groups. We have had native prairie chickens come back. We have had pheasants come back. And what the effect of this sign-up is is to take that habitat which was in the priority area and make it not eligible. I think somehow or another we have to get this addressed in the next sign-up.
And that is the other question I would like answered is how we are going to proceed. And those people that missed, is there some way they are going to be able to be assured that they are going to be able to get into this program? One of the problems we have got out there now is that in a lot of my area, people are so fed up with this, I am not even sure they are going to bid. They are going to go in and plow this up.
So I think there are some problems, at least in our State. I think there are maybe in some other States. And I think that we need to look at the way this process worked and try to recapture some of the environmental benefits that I think we have lost because of the way this thing has been put together. So I would like to have some discussion about this when we get to questions.
Mr. COMBEST. Any other Members to make comments?
STATEMENT OF HON. DAVID MINGE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA
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Mr. MINGE. Thank you, Mr. Chairman. I, too, would like to compliment the Department for having worked through this in a relatively short time period. A great deal of skepticism here on the Hill as to whether or not the sign-up could actually be accomplished.
I share with Mr. Peterson, however, some frustration over the result also of the sign-up. When you look at different regions of the country, I think the State of Washington, which is not represented on this committee to the best of my knowledge, perhaps fared more poorly than any other State in the country. I notice with some concern that 21 percent of the Washington land was accepted, which means 79 percent of the bids, strike the land, of the bids, were rejected. In Minnesota, I just picked the county where I have worked for the last 20 years. Five percent of the offers were accepted. Two percent of the acres were accepted. This is a county with two major river valleys in it, fairly significant amount of river bottom and highly erodible land. There were 187 offers. Five were accepted. There is something indicated by this very statistic that indicates that the program was not well administered in certain regions.
And I am not blaming the local staff. I am simply saying that when you put it all together, it didn't happen. You don't have 95 percent of the people applying being rejected without a feeling that the program has let down the area.
Another feature of this--and this is not the only county in my district that had low acceptance rates. There were many. And this is a Prairie Pothole Region, and the expectation was it was a priority area and that the sign-ups would be fairly broadly accepted.
Another object of concern that I would like to express is that the next sign-up is scheduled for November, as I understand it. If we wait until November or fall, we are going to find that much of the land that should be accepted will not even be offered if the level of frustration that I have sensed to date continues. And this means that thousands and thousands of acres that ought to be in conservation reserve will never be retained in conservation reserve. And many farmers who are struggling with this decision, landowners, will say, we need to begin fall preparation to this land for the 1998 crop year if we are going to be treated anywhere parallel to the way we were treated in the spring sign-up.
Page 8 PREV PAGE TOP OF DOC We can't afford to have this type of sign-up environment prevail this fall, and I would urge that the next sign-up start in late summer so that a decision can be made by USDA, and people will know whether or not their land is going to be accepted before they have to make the critical decision about fall tillage to prepare for the next crop year in the event their land is not accepted. They cannot wait until the spring of 1998 to decide whether or not to till that land for the 1998 crop year, and the ground will freeze in November, and tillage will be impossible.
Again, I would like to thank you for your efforts on this and look forward to working with you, but I would like to emphasize the high level of frustration that exists.
Mr. COMBEST. Mr. Pomeroy.
STATEMENT OF HON. EARL POMEROY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH DAKOTA
Mr. POMEROY. Mr. Chairman, I will be very brief. First, it is to the statements--I have got a written statement for the record, but I feel a quick word of response to the preceding speakers is in order.
Congress has had no better supporters of the CRP than Collin Peterson and David Minge, and so the concerns they raise certainly need to be evaluated. Questions they have need to be answered fully.
I would observe for another State that has--for which this program has been very important, North Dakota, that the process of enrollment seems to have been done in a very--in an orderly way, reflecting congressional intent in the new law. We asked in the new--in the revised CRP for you to take a more holistic look at environmental characteristics of the acreage to be enrolled. As to the acreage that ultimately was accepted in North Dakota, I believe that acreage reflects that congressional intent very closely.
For example, under the old CRP, sometimes driven by the sheer quota requirements of the sign-ups, we had acreage coming in that really didn't in any reasonable way reflect the highly erodible characteristics the program was to reflect at that time. The acreage reenrolled is certainly not identical in North Dakota, and the new acreage coming in has got very important environmental characteristics consistent with the act.
Page 9 PREV PAGE TOP OF DOC And so I would just observe part of the happiness or part of the unhappiness an area is going to have is in terms of how they fared. And North Dakota, I will be the first to acknowledge, had substantial acreage coming into the program. It is my observation, however, that acreage is acreage that qualifies under the criteria set out in the statute and under the rule and, most importantly, offers tremendous conservation benefit to this country in light of its environmental characteristic. In that respect I think the Department has done an excellent job.
[The prepared statement of Mr. Pomeroy follows:]
STATEMENT OF HON. EARL POMEROY
Notwithstanding that North Dakota fared pretty well under the 15th CRP sign-up, I believe the improved CRP overall is on course to its initial Congressional intent.
The results of the 15th CRP sign-up show us that the true intent of the program really works--the program's purpose is to protect environmentally sensitive land while not paying tax dollars to idle productive farmland. The Department accomplished this goal through their new rules implementing the Environmental Benefits Index scoring system and by establishing ''conservation priority areas'' (one of which is the Prairie Pothole Region largely consisting of North Dakota.) Through these improvements in the program made by USDA, the program can now build upon this 15th sign-up and move forward to a program getting better with each sign-up.
The 15th sign-up was no easy task: there was pressure to review 252,000 offers using new guidelines while trying to get answers to landowners in time to make planting decisions for upcoming crops. In this regard, I would like to compliment the Natural Resources Conservation Service and Farm Services Agency for their efforts in successfully improving a re-focused environmentally oriented Conservation Reserve Program. At all levels of these organizations, they have done an excellent job of providing the required technical assistance to producers within a very short time frame.
Additionally, as many of you know, the Department utilized other partners as well in devising the new CRP rules, during the sign-up, and in the consideration process. Conservation districts, wildlife agencies, State foresters and other organizations played a large part in supplementing the Department's efforts. NRCS and their partners worked long hours and weekends to evaluate the 252,000 offers received by the Farm Service Agency. Under the tight time constraints and pressure for quick decisions, the assistance they provided producers to make the best environmental decisions possible so that acres would be accepted into the re-focused program is much appreciated.
Page 10 PREV PAGE TOP OF DOCI also understand that the work isn't complete. Now that decisions have been made on which acres to accept, NRCS has the task of preparing conservation plans with the producer and assisting the landowners in implementing those conservation plans to achieve the environmental benefits predicted by the EBI index. These tasks also stretch NRCS State and field offices to have plans completed by September 1, 1997, so that CRP contracts may take effect on October 1, 1997. Furthermore, I hope NRCS and FSA employees continue to work with landowners so that lands not making it into the program during the 15th sign-up can improve so their offers are more attractive for the announced 16th sign-up.
Again, I thank these agencies and their partners for their efforts, and I look forward to the future of the CRP--truly one of the Government's most successful and common sense programs.
Mr. COMBEST. The panel today from USDA we have asked and appreciate coming down Mr. Dallas Smith, Acting Under Secretary, Farm and Foreign Agricultural Services; Mr. Parks Shackelford, Assistant Deputy Administrator for Farm Programs of the Farm Service Agency; Tom Hebert, Deputy Under Secretary for Natural Resources and Environment; and Paul Johnson, Chief of the Natural Resources Conservation Service.
Gentleman we appreciate very much your appearing. I am presuming, Mr. Smith, that you would lead off, and others that have comments to make, we would welcome those at this time.
STATEMENT OF DALLAS SMITH, ACTING UNDER SECRETARY, FARM AND FOREIGN AGRICULTURAL SERVICES, U.S. DEPARTMENT OF AGRICULTURE
Mr. SMITH. Thank you, Mr. Chairman, Members of the subcommittee. I am pleased to appear before you today to discuss the Conservation Reserve Program. You have already acknowledged the presence of my colleagues who will assist in responding to your specific questions at the end of my prepared testimony. My prepared testimony will be very short, and at that time we can then address the concerns of the subcommittee.
Page 11 PREV PAGE TOP OF DOC When I appeared before you in February I said that we were very excited about the new CRP and about the huge conservation gains in reducing erosion, improving water quality, and enhancing wildlife habitat this country will make in just a few short months using this voluntary, incentive-based program.
Since then the local offices of FSA, Farm Service Agency, with technical assistance provided by the National Resources Conservation Service received an unprecedented number of offers from farmers and ranchers seeking enrollment in CRP. Over 252,000 offers involving 23 million acres were submitted to our county Farm Service Agency offices during March.
USDA analyzed and evaluated each offer based on the competitive Environmental Benefits Index and began notifying producers on May 22 of our enrollment decisions. The EBI is used to compare all offers based on seven factors: soil erosion, wildlife habitat, water quality, air quality, location in a conservation priority area, long-term retention of conservation benefits beyond the contract period, and cost.
USDA accepted over 160,000 offers for 16.1 million acres during the 15th sign-up. As Secretary Glickman stated in announcing the acceptance, ''We set out to enroll land that would yield the highest environmental benefits, keep productive cropland growing food and fiber, and be fair to taxpayers in providing the most environmental bang for the buck.''
The environmental benefits of the 16.1 million acres accepted are significantly greater than those of the current CRP. The 16.1 million acres accepted will result in a nearly 85 percent increase in the environmental benefits for every dollar spent. The average EBI of the 15th sign-up acreage is 46 percent higher than the acreage currently in the CRP. The greater environmental benefits are due to a variety of factors including producer willingness to adopt more environmentally beneficial vegetation, the enrollment of acreage in conservation priority areas, the restoration of more than 790,000 acres of wetlands with protected upland areas, and the enrollment of over 1 million acres of trees. Applicants were also willing to devote only the more environmentally sensitive land to the CRP while returning more productive land to crop production and to other uses.
Page 12 PREV PAGE TOP OF DOC We believe that the temporary retirement of this land will not have a substantial effect on commodity prices, farm income, or the United States' ability to supply world markets with agriculture products, because more environmentally sensitive acreage was enrolled this sign-up leaving the more productive land available for crop production.
In fact, while receiving greater environmental benefits, we will be paying 21 percent less per acre on the average than the previous CRP, and saving more than $1.6 billion over the life of the program for the 16.1 million acres that we enroll.
Farmers and ranchers whose land was not accepted can consult with the Farm Service Agency and Natural Resources Conservation Service or the local conservation district to improve the environmental benefits or reduce the rental rates of offers for the next CRP sign-up, which is scheduled to take place this fall. Potentially, bidders can increase environmental value and acceptability of their offers by proposing to establish certain vegetative covers which enhance wildlife habitat and by offering only the most environmentally sensitive acreage in a field.
Additionally, landowners now have the continuous opportunity to enroll land in certain high environmentally-valued conservation practices, such as riparian buffers and grass waterways.
NRCS and the conservation districts also stand ready to assist producers in returning CRP acres to production or other uses after the contract expiration, while at the same time preserving and protecting the environmental gains that we have made.
I appreciate the opportunity to present this testimony today, and I will be happy to respond to your questions at this time. Thank you.
[The prepared statement of Mr. Smith appears at the conclusion of the hearing.]
Mr. COMBEST. Mr. Smith, were there others, Mr. Shackelford, Mr. Hebert, Mr. Johnson, anyone else who had comments they wish to make?
Mr. SHACKELFORD. No.
Page 13 PREV PAGE TOP OF DOC Mr. SMITH. No, sir.
Mr. COMBEST. Thank you very much.
I would, in order to have a complete history in the record of this subcommittee hearing, I would ask unanimous consent that the subcommittee record include this book from USDA Farm Service Agency on the sign-up.
[The information is on file with the committee.]
Mr. COMBEST. Interestingly enough, I think that it is obvious that there were a number of States that virtually every acre bid were received, and if I were from one of those States I would join some of my colleagues in complimenting the decision that USDA made and be very reluctant to encourage them to do anything else. So this becomes obviously very regional when one views the success or failure or gaps that may continue to be occurring in what some of us think are in the current program.
We received a copy of a decision memo, that was used by Secretary Glickman to choose a number of acres to accept during this sign-up. The memo indicates that up to 24.7 million acres could be enrolled without exceeding the statutory limit of 36.4 million acres. I found it interesting that the Secretary was given several options also of acreage levels to choose from, with one option being 22 million acres. What would be the budget implications if the Secretary had chosen that level of enrollment?
Mr. SMITH. Well, we had a $19 million baseline in the budget which we were operating against. However, the 22 million acres was the amount in which we felt that the Secretary would have the option based on the bids and the environmental benefits to be gained from that acreage that was bid into the process.
I would like to go to Parks Shackelford and the Farm Service Agency and ask if there were any additional considerations for the budget.
Mr. SHACKELFORD. We are doing some rough calculations. You may be quicker. I don't have a calculator. The average rental rate, if we had remained at a cost factor of $200 and accepted 22 million acres, $41.11 would have been the average rental rate. So from my amateur mathematics at least, a rough estimate should be 3 million times $41. That wouldn't be exact because the rental rates increased as we accepted more acreage, but Tom may be able to give you a better estimate.
Page 14 PREV PAGE TOP OF DOC Mr. COMBEST. Was that the average overall? Would that have brought the average overall or the average of the additional acres?
Mr. SHACKELFORD. That was the average overall. That was not the average of the additional acres.
Mr. COMBEST. So it would have moved it from $31 as it was--$39 to $41, $2 an acre more.
Mr. SHACKELFORD. Right. That would be the overall average. And obviously there is an increase. We can get you a more specific figure. I don't have that at my fingertips.
Mr. COMBEST. In the budget there was, as you mentioned, a 19-million-acre figure, and assuming at $50 an acre, which would have been $950 million. There were $630 million committed in the sign-up at 16.2 million acres at $39 an acre, which leaves about $320 million on the table.
For example, at $39 an acre, there is an additional 8.2 million acres that could be protected under the dollar amount; at $45 an acre, an additional 7.1 million acres; and at $50 an acre, an additional 6 million. We have had discussion of the possibility that the expected fall sign-up could allow another opportunity for some acres to rebid in the CRP before they must be broken up in preparation for planning for the next fall crop, for the next crop year.
If the contracts that are offered to these acres during this fall sign-up are not made effective retroactive to this October, then these producers could lose a year of income and be forced to put this land back into production. Is there any reason why the Department could not make the contracts offered this fall retroactive?
Mr. SHACKELFORD. We would not be able to make the contracts retroactive. We could make the contracts effective as soon as they were approved. The sign-up period has not yet been decided, but will probably be sometime in the early fall or mid fall. I guess that depends on how one defines ''fall.'' Trying to balance our workload in the county offices between all of the AMTA payments that we will be issuing and the NRCS workload on EQIP coming down at the end of the fiscal year are some of the things we have to take into consideration in trying to balance when the sign-up is so that we will have the time to spend with the farmers to explain the program as Mr. Peterson emphasized the need for.
Page 15 PREV PAGE TOP OF DOC I will give you a ''for instance.'' If we made the decisions, and we are able to accept those contracts, say, January 1 or February 1, we could make the contracts effective at that time.
Mr. COMBEST. Rather than at the----
Mr. SHACKELFORD. We can't go back retroactively to October 1.
Mr. COMBEST. OK, you can make them effective immediately upon acceptance.
Mr. SHACKELFORD. Right. Contracts could become effective as soon as producers sign a contract. The producer might lose a few months of payment, but would not be forced to lose a year of payment.
Mr. COMBEST. I will end with this. Let's talk about a time frame, as you said, depending on when people define ''fall.'' I think fall officially begins the 22nd of September, and winter begins the 22nd of December. So we are talking about sometime during that period.
Mr. SHACKELFORD. I think that is a pretty good----
Mr. COMBEST. So now let me ask you: You said some early, some mid. Given that definition, would you say early, mid or late fall is the time frame?
Mr. SHACKELFORD. Given that definition--obviously no decision has been made, and this will be decided by the Secretary.
Mr. COMBEST. I understand.
Mr. SHACKELFORD. Certainly that early to mid of that definition seems to fit in within our workload. We will have very heavy workload on EQIP in September. We'll also be issuing the final payments for AMTA in September, right up to the 30th, and with some holdover work in very early October. But it would seem that that would be a very good time to hold the sign-up.
Now, the down side is that is when the farmers are very busy. We have the competing pressure of having enough time in the sign-up to be able to spend the time with the producers, and certainly at least now we have the option between now and the sign-up of explaining the options that producers can use to improve their bids. So there is a longer time there. But then there is always the pressure on the other side to get the sign-up over immediately and get people signed up. So we will try to balance those interests.
Page 16 PREV PAGE TOP OF DOC Mr. COMBEST. Well, and I would be remiss if I didn't say that I never thought you would hit the date you did for announcing the sign-up in May. And I want to compliment the Department for the work that they did in order to do that in a very compressed time frame. I think that was exemplary of the kind of cooperation that you had in the Department, and, again, I know there was a lot of hard work put in by a lot of people.
Mr. SHACKELFORD. If I could clarify a previous answer. I found in one of our documents the annual rental payment at 22 million acres was estimated to be $946 million.
Mr. COMBEST. And there was $950 million in the budget.
Mr. SHACKELFORD. But the other clarification, I guess, is the way, while the budget is an estimate of what we would be doing on CRP, our authority is limited by acres.
Mr. COMBEST. I understand. Thank you.
But there was, again, so we are clear, there was some options internally of and there was a suggestion of going up to 22 million acres in the Department, wasn't there, by someone?
Mr. SHACKELFORD. I don't think anyone advocated going up to 22 million acres. That was the maximum option available, given the 25 percent county limitation and the offers that were eligible. That was seen as kind of the maximum. We generally try to consider a range of offers also, and there was a range of offers considered, with 22 being the highest. It was not advocated by any agency within the Department.
Mr. COMBEST. Thank you. And I beg the indulgence of the members of the committee.
Mr. DOOLEY. Thank you. It doesn't come as a surprise to me, nor do I mention comes as a surprise to USDA, that you are seeing increased political pressure to expand the number of acres that were accepted in the CRP. Understanding that, though, I think it is vitally important that the USDA maintain their consistency upon which the principles of the CRP reform was instituted. One, this is not an income transfer program. It is also a program that is supposed to try to invest taxpayer dollars to achieve the greatest environmental benefit. The 36 million acres that have the potential to be enrolled is not a goal, it is a cap. And the 22 million acres that could have been enrolled this year was again was not a target, it was not something that we were supposed to try to achieve, but it was something that we had the possibility to, if we he had land that was offered at a price that was also providing a set environmental benefit.
Page 17 PREV PAGE TOP OF DOC I guess my concern is that I still think that the Department is somewhat vulnerable to some of these political pressures because I think we have to step back and really do an analysis. And I would be interested if the Department has done an analysis. And when I look at the Environmental Benefits Index I would ask, you know, for comments from Mr. Smith or anyone else, have you found in the enrollments that that land with the lowest environmental benefit had any degree of association in terms of the level of productivity of that land for agriculture purposes?
Mr. SMITH. Congressman, I think the answer to your question is yes, we did. And I would like to turn to Parks Shackelford or to Mr. Hebert to see if they would expand on exactly what that analysis showed.
Mr. SHACKELFORD. I think we will probably both have comments on this. But the environmental sensitivity of acreage is not necessarily linked to the productivity. In many cases it is. In some cases it is not. But one of the important factors is that the rental rate is almost always linked to the relative productivity, so where we have land with very high rental rates, it is usually very productive land. That is usually the land that we do not want to pay tax dollars to retire from production. That is the land that you generally want to be returned to production.
There is also some land that has high rental rates, and also has high environmental sensitivity. And by using the cost as a factor within the EBI, that takes into account the relative productivity. So if we have land that is very sensitive and also productive, the land that is very sensitive and needs protection can be retired, but that land that only offers a medium level of environmental sensitivity or less does not get enrolled because it does have high rental rates, and it generally is very productive land.
Mr. DOOLEY. Go ahead.
Mr. HEBERT. That is correct. I would just add that the Environmental Benefits Index has evolved every time we have used it since 1990. It is not a perfect cost benefit tool, but it is probably the best tool that the Federal Government has devised in this kind of circumstance. I am not aware of anyone else that has tried to do this kind of analysis on the scale that USDA has used it. And we put it through peer review articles. And we recognize is not perfect, and we try to improve it every time. So if there is anything we can do to improve it in regard to productivity of land that is being accepted, we are always open to those ideas.
Page 18 PREV PAGE TOP OF DOC I will add one other thing. Just to reiterate what Parks said, there are difficulties in the statute in that highly erodible land does not necessarily always equate to low productivity, and highly productive cropland can often provide the most wildlife habitat benefits because it produces the best cover. The statute is not perfect in this regard, and we have tried to work within those imperfections to devise a program that captures all of that as best as possible. Improvements are certainly possible, though.
Mr. DOOLEY. I appreciate your comments there.
Mr. Shackelford, your comment where there was a direct correlation to productivity and rental rates I think is important. And I appreciate the comment that there is going to be some disparity in terms of the environmental benefit versus the productivity. But I guess, though, that at some point it seems that the Department is even going to have to do a regional assessment of what that correlation is, because at some point we need to determine how much we are willing to pay per acre for an environmental benefit.
The taxpayers, should be demanding that we don't have basically a blank check here where we're going to be willing to spend X amount of dollars on land that has a lower EBI in some region. Mr. Peterson talked about he had some land that was at $70 an acre that wasn't being enrolled. Well, I am not so sure that is not the right thing to have happen. That land that might likely have $70-an-acre rental value is probably land that has thus a higher productivity. And, in Mr. Peterson's region there, his producers almost have the right to know, how much we are going and the taxpayers are going to be willing to pay for land that has a set EBI in order that might even be different than what the function of the rental rate.
Because I'm concerned that the Department needs to be insulated somewhat from the political pressures that are going to be put upon you to enroll up to this maximum amount that we can enroll, and the only way I see that you can do that is by having some type of formula and function that can preclude that. Because of the problems I see, if we always go up to the maximum, we could have in the future the inability to enroll land that could have even greater environmental benefits because we are already up to our cap. And that is why I think we have to be very cautious about responding to some of the political pressure that is being placed upon you now.
Page 19 PREV PAGE TOP OF DOC Mr. SHACKELFORD. If I could comment on that, I think we found with this sign-up we have roughly doubled the environmental benefits that we are deriving from CRP with a 20 percent average reduction in the cost.
Mr. DOOLEY. I compliment you on that. I think you folks did a terrific job in this initial enrollment, and I hope that you maintain your consistency with that approach.
Mr. COMBEST. Mr. Barrett.
Mr. BARRETT. Thank you, Mr. Chairman. I would like to associate myself with the remarks that you made earlier and Mr. Dooley's remarks, Mr. Peterson's, and members of the committee in congratulating the Department. I was one of those who was publicly critical, saying that it was doubtful, in my opinion, that you could meet that deadline. You did, and you are to be congratulated.
I think the EBI is working pretty well in my area, pretty much as intended. There are some producers that are falling through the cracks, and I am sure that is the case in every situation. But some of them, I am told, have been rejected by as little as one point, some of them thinking that they were not given the correct information or enough information to improve their bids. I am sure that this is not unique only to my area.
Would you care to elaborate a bit? And what is being done about it to correct that situation?
Mr. SHACKELFORD. Well, we have certainly made every effort to provide as much information to producers as possible. We have met with all the producer groups. We had meetings throughout the countryside to try to explain to producers how things were done. Obviously at the same time we were under a great deal of pressure to conduct the sign-up as quickly as possible.
Mr. BARRETT. Right.
Mr. SHACKELFORD. We try to balance that and make sure that information is as available as possible. In any case where you may have to make a decision, you have to draw a line. There are going to be those that are just barely on one side of it and those that are just barely on the other. And those who are on the low end of the line tend to not think that is a fair place to draw the line. We try to do that as fairly as possible. If we have cases where mistakes were made in calculating a score for a producer, if something was done wrong, we are certainly willing to go back and look at that.
Page 20 PREV PAGE TOP OF DOC Mr. BARRETT. Because of the time constraints that you were under, is it possible that maybe the training that was offered to the FSA agents was a little bit limited in that short time? Could that have contributed to this problem, which is not unique, again, to my area?
Mr. SHACKELFORD. We offered extensive national training to both FSA and NRCS. Both agencies understood the scoring, how that was done, so both agencies should have been able to explain that to producers.
I visited county offices during the sign-up. Some were very busy, but most had the time to be able to spend the time and explain the programs or the scoring of the land to the producers who were interested in learning that. I can't say that it was done perfectly everywhere. I don't think we can ever say that.
Mr. BARRETT. Well, again, talking about some of those that just missed the cut, I am aware of some who felt that they might have been limited because they didn't participate in the enhancement program, and we are not really instructed in that area. Is that a possibility? And if so, is something being done there?
Mr. SHACKELFORD. We don't have an enhancement program in progress at this time, so I am not sure what you might be referring to.
Mr. BARRETT. Were CED agents, representatives also made eligible for the CRP? I believe that they were. Is that true? Some of your county agents out in the hinterland, were they also eligible for CRP?
Mr. SHACKELFORD. All people who owned eligible land in the United States are eligible.
Mr. BARRETT. Some reports I have gotten were that some of the producers felt that that was unfair, but that is nothing new. It has been happening since the beginning of the program, right?
Mr. SHACKELFORD. We have members of the Government, Members of Congress, all kinds of people. If you have land that is eligible, you are eligible for the program, just as for any other Government program.
Page 21 PREV PAGE TOP OF DOC Mr. BARRETT. Right.
Mr. SHACKELFORD. We try to make sure no one has any advantage. There are always secondary reviews for anything that is done for an employee. No one knew where the cutoff was going to be. We didn't know in our staff in Washington. No one in the field knew. So when people say, I could have done something different for five more points had I known there was a cutoff, no one knew that. That was something we left up to the producers, and in reality it has helped us a great deal, because we have saved a great deal of money. Over 60 percent of the producers submitted bids below the maximum rental rate that was available, and that results in significant savings. There is a benefit to be had from some uncertainty. Producers did a lot of things to enhance their bid that they might not have done if they knew they were guaranteed to be enrolled, and that is a benefit to the taxpayer.
Mr. BARRETT. Thank you, Parks.
Mr. SHACKELFORD. Yes, sir.
Mr. BARRETT. Thank you, Mr. Chairman.
Mr. COMBEST. Mr. John.
Mr. JOHN. I will be very brief.
Obviously the EBI was used to prioritize some of this land in some of the other sign-ups, but it was refocused this year. I would like for you to comment on the fact of how was it working in the--maybe not as much as how was it working in the past. Is it better this year? Did you find it a much more beneficial tool to use to index the land? Because you definitely refocused it tremendously away from just erodibility into more of environmentally sensitive areas of wildlife and habitat and other situations.
Mr. SHACKELFORD. Yes, sir. We think it is a much better approach than some of the approaches in the past. Most of the land that went in very early went in on different erodibility criteria or land capability criteria, but didn't look at a wider range of the benefits that could be derived from CRP. By taking into account wildlife benefits, water quality, erosion, long-term permanence of the cover, potential air quality benefits that could be saved, and taking into consideration the cost, I think we did a much better job of targeting to the land that should be retired, and I think we are going to see a lot of benefits from it.
Page 22 PREV PAGE TOP OF DOC Mr. JOHN. Did it work well? How do you feel that this model worked this year?
Mr. SHACKELFORD. I think it worked very well. When we were here back in February, there were a lot of questions, a lot of skeptics that didn't think we could get the job done. I think our county people did a fantastic job. We evaluated the acreage. That is not to say that maybe it can't be improved. And one of the reasons we try to keep the EBI flexible from sign-up to sign-up if needed, is that if we find something that didn't work at well or some way it can be improved, we certainly want to do that. But we were able to evaluate the acreage, and we were able to make announcements well before I thought we would be able to and well before I think we promised we would when we had the hearing.
Mr. JOHN. Alluding to Congressman Barrett's comments about the acreage that may have not qualified by one point or two points, you believe that this new tool, this new EBI and the seven the components of it, has enhanced your ability to be able to make those determinations on such a small one- or two-point scale? Or is this too much subjectivity?
Mr. SHACKELFORD. Well, it is an objective score. I am not sure how to answer that question.
Mr. HEBERT. Parks is correct. It is an objective score. It is not a perfect score. We have to draw the line someplace. And when we draw the line, we recognize that there are some people who just miss, and until we have a better tool, I am afraid that is what we will be continuing to work with. And the point is that we then go back and work with those producers if they wish to improve their score for later sign-ups.
Mr. JOHN. And I understand that there has to be a cutoff.
Moving away from that, just your opinion, and I guess it could be to Mr. Shackelford, do you believe that the evaluation through this mechanism, the new EBI with the components, evaluates the land that could be used in other types of programs maybe unrelated to farm activity, further conservation programs, maybe environmental programs; that, using that tool to say that this land is environmentally sensitive, it can be used in other areas?
Page 23 PREV PAGE TOP OF DOC Mr. SHACKELFORD. I am not sure I understand the question.
Mr. JOHN. How about in the fight over the wetlands issue. The crux of the whole matter is what is this land, and how do we designate this land? Do you think that using the designation of these parcels that you are looking at, that we could use some of that data and criteria to look at possibly the wetlands issue?
Mr. SHACKELFORD. Well, I mean, CRP is a useful tool for a producer in handling wetlands. We use the same criteria for evaluating the land that is used to determine whether lands are wetlands or whether land is highly erodible. So it is over the same base. But it offers a valuable tool to producers who have certain lands that are farmlands, that are wetlands, who may want to look at another way to address them rather than maintaining them in production. We will come in and offer to retire that land and get the environmental benefits from it, and it is a benefit to the producer.
Mr. HEBERT. May I add to the statement?
Mr. JOHN. Go ahead.
Mr. HEBERT. The Environmental Benefits Index is a tool that was designed to work in the context of the CRP and its program objectives. I believe it would take considerable work, and it may not be possible, to modify it to use in the context of another program, specifically in the way that you are talking about for wetlands. That doesn't mean it couldn't be done, but the EBI itself as used in the context of the CRP is really designed for CRP purposes, which include enrolling wetlands. But I don't think it would be appropriate to assume that it could be used in other contexts without major modifications.
Mr. JOHN. Thank you.
Mr. COMBEST. Mr. Lucas.
Mr. LUCAS. Thank you, Mr. Chairman, and I would like to thank you and the ranking member for holding this hearing to discuss the 15th sign-up of the CRP.
Page 24 PREV PAGE TOP OF DOC As many of you know, the Sixth District of Oklahoma is in the heart of what was sometimes referred to as the Dust Bowl. In an earlier part of this century, thanks to drought and questionable farm practices, literally much of the topsoil in my district blew away. CRP and the programs that preceded it have helped to assure that this calamity will never occur again.
And first and foremost, I would like to point out that I share the view of many of my colleagues that the CRP sign-up should have included 19 million acres at a minimum. That stated, I would like to open a line of questions on the breakout options for producers with expiring contracts who have not had their bids accepted or were not eligible to rebid into the program. And for the record, Mr. Chairman, I would like to note that while my little diagram up there faces the committee, our witnesses have a smaller but an exact copy of that same map at their disposal.
And if I could, the current contract, as I understand it, allows producers to break their land out after July 1 without penalty, which I hope the panel would agree is correct.
Mr. SHACKELFORD. Our policy allows producers to prepare land for fall seeding, to begin land preparation starting on the 1st of July without penalty, for fall seeded crops.
Mr. LUCAS. And the Department ruled that producers in arid areas, producers west of the 100th meridian would be allowed to break their land out on May 1 or later without penalty.
Mr. SHACKELFORD. Our normal procedure that has been in effect for several years has allowed producers in arid areas who need to destroy the cover early to preserve moisture to destroy that cover starting on May 1. And in past years and in the future, there has and will be a payment reduction for those 2 months, for the months of May and June, if the producer breaks it out at that time. This year, because of the lateness in the determinations on the CRP contracts and at the urging, strong urging, of Members, the Secretary chose to waive that payment reduction for this year only.
Mr. LUCAS. Are you familiar with the letter of May 19 that Mr. Moran and Mr. Thune and I sent to the Secretary expressing our concern and our frustration with the use of the arid definition? Has anybody on the panel seen the letter?
Page 25 PREV PAGE TOP OF DOC Mr. SHACKELFORD. I believe I have seen the letter. I don't recall its exact contents, but I recall the general theme.
Mr. LUCAS. And to your knowledge, has anybody on the Department had an opportunity to respond to the signers of that letter, to your knowledge?
Mr. SHACKELFORD. To my knowledge, I assume that the response is in the clearance process. Sometimes it takes longer for us to get responses. Certainly the issue was brought to the attention of the leadership, and they understand the concern. However, they felt that the current policy was where we should stay.
Mr. LUCAS. And of course my response is that to my knowledge, I have not seen a response to that letter.
My first thought, after looking at the map, once I realized how the lines had been drawn, was to ask the rhetorical question, if the Secretary had the power to move the 100th meridian a little bit. And I realized that was not an appropriate question, not a fair question. So I guess my more realistic question is, is it true that the Secretary redesignated the arid line in Kansas by moving it from the 100th meridian over to what I would describe as Highway 81, which is about 100 miles east of the 100th meridian?
Mr. SHACKELFORD. The 100th meridian definition for the arid areas has been in effect for some time. However, we do have different programs within our different agencies, and we are trying to do our best to get those consolidated so we don't have different lines and we don't have misunderstandings.
Unfortunately, in Kansas there was a misunderstanding. Traditionally the definition in Kansas of arid areas has been west of Highway 81, which is not exactly at the 100th meridian as your map shows. We were faced with a situation where our staffs had misunderstood. They thought that was the line for arid areas in Kansas, and had informed producers on that basis. We were faced with going through a great deal of misaction, misinformation claims with what we had been telling producers in Kansas. This was a line that had been the traditional line for the Great Plains Conservation Program and some of the other programs. I believe the Secretary felt that it was easier to go ahead and provide the definition that producers were familiar with than going back and granting misinformation claims on all of the cases.
Page 26 PREV PAGE TOP OF DOC Mr. LUCAS. When was the decision made?
Mr. SHACKELFORD. I would have to look at a calendar to tell you that exact date.
Mr. LUCAS. I would be most curious in that.
Mr. SHACKELFORD. When we were up here for the briefing, you all were very well aware of it and made clear your displeasure. So it was made before that date.
Mr. LUCAS. And for the record, it is safe to say that the map is accurate in the CRP breakout dates that it reflects.
Mr. SHACKELFORD. I assume that that is close to where Highway 81 is. I am not as familiar with the geography of Kansas, but I know it is somewhat to the east of the 100th meridian. I also clarify that not all of the area west of the 100th meridian is eligible, areas have to have rainfall less than 25 inches annually, so only those dryer areas west of the 100th meridian would be considered arid.
Mr. LUCAS. I suppose the difficulty for me, of course, representing the Sixth District of Oklahoma is trying to explain to those producers who live in some instances within eyesight on the Texas State line, which on our western State border is the 100th meridian for the main body of Oklahoma, or even those who live, in instances, many miles back into the interior of that part of Oklahoma, why their breakout needs are different, say, in Hollis, OK, than in Caldwell, KS;, explain to them why the definition of ''arid'' from an agronomic perspective would be so dramatically different. And when they ask me, well, Congressman, who plants earlier; who harvests earlier? Well, of course you do in Hollis.
It makes it very, very difficult, gentleman, living up to my obligations to my constituents, I suppose, in truth, and that gets down to the real difference here. My constituents would say to me that basically they signed the same contract in southwest Oklahoma that was signed in Kansas, probably the only difference would be the price per acre paid, and that they feel like they should be treated equally. Now, granted I am not criticizing what has occurred in that portion of Kansas. I signed that letter with Congressman Moran and Mr. Thune because we felt like the line should be moved eastward for everybody. So I congratulate Congressman Moran in very successfully signing one-third of his letter and advocate--yes, a weak attempt at humor, Mr. Chairman, but it strikes at the issue at heart here.
Page 27 PREV PAGE TOP OF DOC I just have an extremely difficult time explaining this map to the constituents back home. I served with the Secretary when he was a member of this committee from the State of Kansas, and I have the greatest respect for the Secretary. I guess about all I can do is ask that you consider changing your policy, wait for a response on that, and then offer a thought or two, and then yield it back to the chairman.
Mr. SHACKELFORD. I would just say, what we have tried to do--and once again, there is an issue of drawing lines, where we have regional differences we try to make our programs flexible to address regional concerns, we tried to make it so we address the traditional summer fallow areas and not those areas that are higher moisture areas where it is not as necessary.
In reality, all our contracts are 10-year contracts. None expire before the 1st of October. This is an optional flexibility we are trying to give to producers where they need it most and where it can be justified. Unfortunately, sometimes across different State or political boundaries, we do have differences in the way the programs are administered.
Mr. LUCAS. And I appreciate that. But I also appreciate that representing the farmers and ranchers and all the citizens of the Sixth District, I have an obligation to work on their behalf and defend their interest in how programs are implemented. You gentlemen represent agriculture and producers and the citizens of this entire Nation. Just as I have a parochial interest to work on behalf of my constituents, you have an obligation to do things that not only fit the rules, but that are things that present a sense of fairness and appropriateness for the whole Nation. Granted I can't read the tea leaves of what went on over there when this decision was made, but whatever the process, the end result produced an awfully interesting map that I am having a real challenging time explaining back home.
With that, I thank the witnesses for their insight and yield back my time, Mr. Chairman.
Mr. COMBEST. Mr. Peterson.
Page 28 PREV PAGE TOP OF DOC Mr. PETERSON. Thank you, Mr. Chairman.
Once again, looking over what happened between Minnesota and North Dakota and Montana, I haven't been able to look at the other areas, but I really think you ought to consider on the cost whether it would make some sense to put in a factor based on how much your cost is compared to what your maximum rental value is. Just because you live in an area that is, say, either as high rent or low rent, it doesn't necessarily follow that the environmental benefit or the wildlife benefit necessarily tracks the dollars. And people should be given some consideration, if they are willing to put their land in for half of what it is worth, they ought to get a little more consideration than if you just happen to live in an area that is $35, for example. So I just would like you to consider that.
The other thing in analyzing this, and this is probably for Paul Johnson, I don't know if you have had a chance to look at what happened out there with these scores, but I compared the counties on the North Dakota side and the Minnesota side in relation to these various M1, M2s and so forth, and what happened in those counties is that the water quality--and this is a concern that I had from the start of this that we are going to have different applications based on subjective kind of things. And Utah counties right across from each other--for example, the Cass and Clay County. I grew up in Clay County. I am very familiar with that. Their water quality scores were 24 on an average, and in Cass County, which is the same land on the North Dakota side, it was 49. Now, Cass County had a 48 percent acceptance rate. Clay County had a 13 percent acceptance rate. You go down to Wilkin County and Richland County, Richland County had 14 percent; Wilkin County on the Minnesota side had 14 percent. Richland County had 70 percent; the water quality, 59 in Richland County, 29 in Wilkin County, the same land.
You go all the way down the border, and with the exception of one county, Polk County, where in Minnesota they actually put higher quality numbers on than they did across in Grand Forks County, and then what happened is 84 percent of the land went in in Polk County and 71 in Grand Forks.
Page 29 PREV PAGE TOP OF DOC So you track this down, and it is almost completely tracking this difference that was given by your local people, and I think you have got a real problem here because this is exactly the same land, and once people find out about this, I think you are going to have a hard time explaining this.
I am going to look at beyond those border counties. I think we have a situation between Minnesota and North Dakota that this happened all over, that we were more conservative for whatever reason than they were in North Dakota, and that is not fair. We have a lot of people that would have gotten into this program if they used the same numbers on the Minnesota side that they used on the North Dakota side. Somehow we have got to reconcile this and get some answers before this next sign-up.
The other thing that I need to say to you is that I talked to some people that went into the office in Clay County, and they were not told anything except what their maximum rental rate could be. They got no information about enhancing for habitat, trees, any of these other issues, zero. Talked to more than one farmer that had the same situation. I think it was because your person was overwhelmed and just didn't have time to get to everybody. And we have got a 13 percent acceptance, and this is an area where we have the prime prairie chicken habitat in my State, Wilkin and Clay County. We made this a conservation priority area at the State level, and it didn't work, and it is because these numbers do not match up to what were done in other areas.
So from the start, what I was concerned about with this EBI is we are going to have different applications in different places, and we really see it in a difference between North Dakota and Minnesota, but we even have it between counties in my district where one county would take a different view than another county right across the line. And you had situations where land was right across the county line where they would give them 20, 30 points difference when it is the same exact land when you added the whole thing up. So somehow or another we have got to get at this problem.
Page 30 PREV PAGE TOP OF DOC And in the other issue--as I follow up on what David Minge said--is we have got to figure if we are going to try to rectify this. We can't wait until November. I think if you wait until November, they are going to plow this up, and it is going to be gone, and I don't think that is the kind of outcome we want. We don't want to lose this, for example this prairie chicken habitat, which we are going to probably lose if we don't fix this situation.
So I would hope that you would take a look at these, and could your staff look at North Dakota and Minnesota, look at these numbers and get back to me with your analysis and see if you agree with what I have come up with here?
Mr. JOHNSON. Yes, Mr. Peterson, we will. We are looking at a number of cases around the country, trying our best to figure out where or why there are differences across county lines and across State lines. And we will get back to you. We will work with you on it.
These are issues that in many cases we have heard this, and we have gone out and we have looked on the ground, and we end up with two different stories depending on who you talk to. But in this case we will work with you on it. We will make sure that we are getting consistency across county lines and across State liens. That is the only way an EBI can work well.
Mr. PETERSON. Before my time runs out, the one other question I have is these people that were within 10 or 20 points of making it in this time. If the ones that didn't find out that if they had planted the native prairie, they would have been over 260, nobody told them that, what can I tell them? If they are willing to go in on this next sign-up and agree to put native prairie on their land, can we give them some assurance they are going to get in in the next sign-up, because that is what people are asking me, and I think David Minge and I and others that have this kind of situation, the only way we can salvage this is if we can give them some kind of answer what the probability is. Is there any way?
Mr. SHACKELFORD. We can't guarantee their being accepted. It will certainly increase their chances of being accepted. One of the problems we found in Minnesota in the first analysis is that a majority of land offered for CRP is not highly erodible land. There was a lot of very productive farm land enrolled in CRP in the past. There are certainly things that we can do to try to increase the bid score. One is improving the cover. Another is looking at what part of that land is more sensitive and offering the more sensitive land. Certainly by putting in native cover they can make an increase in the score and increase the chances they will be accepted, but we can't assure you that all land that provides good cover will also be accepted. It also has to be providing other benefits. If it does, it is more likely to be accepted.
Page 31 PREV PAGE TOP OF DOC Mr. PETERSON. My time is expired. But if somebody could give me an indication of, on the next sign-up, whether we are going to be in the same range or not, I guess that is what I am looking for. That is what they want to know. It is going to basically be operated the same way as it was this last time, so if they do enhance, they are not going to be on some other set of criteria.
Mr. SHACKELFORD. Those decisions have not yet been made. It is likely to be very similar. We think the EBI did very well. There may be cases where you can bring points to our attention where there need to be adjustment. That is possible. I think generally it will be very similar. But those decisions haven't been made. I think everything depends as well on the land that is offered because we make our decisions on the CRP based on the land that is actually offered. So if similar land is offered, and we draw similar conclusions, there is other land that may not have been offered in the past that may be more environmentally sensitive.
Mr. PETERSON. Can you give me the date that the decision will be made?
Mr. SHACKELFORD. Before the next sign-up.
Mr. PETERSON. You don't know when?
Mr. SHACKELFORD. No.
Mr. COMBEST. Mrs. Chenoweth.
Mrs. CHENOWETH. Thank you, Mr. Chairman.
Following on the line of questioning of the gentleman from Oklahoma. Specifically who made the decision to move the boundary east from the 100th meridian to the Highway 81?
Mr. SHACKELFORD. The Secretary.
Mrs. CHENOWETH. And I know you said you didn't know the specific date that this occurred. Can you give us the approximate date?
Mr. SHACKELFORD. I can go back and look at my calendar and give you the specific date. I can tell you where I was in a meeting at that time, but I don't know it in my head. I am sorry. I would certainly be glad to provide that to you, though.
Page 32 PREV PAGE TOP OF DOC Mrs. CHENOWETH. Can you indicate for the committee when you will be moving the border eastward in Oklahoma and Texas perhaps?
Mr. SHACKELFORD. I could indicate that probably we will be moving the border westward in Kansas to make it consistent with the definition for others when we can give producers advanced notice so they are aware of it, so we are not in a situation where we have misacted or misinformed the producers.
I can't promise you that. That decision will obviously be made. But we want to treat people consistently and fairly, and treating people fairly doesn't always mean treating people exactly the same.
Mrs. CHENOWETH. Will you stay in touch with the committee as you move through that?
Mr. SHACKELFORD. I am sure we will be in very close touch with Mr. Lucas and all other Members that are interested.
Mrs. CHENOWETH. Thank you.
Mr. Shackelford or Mr. Hebert, would you mind providing for the committee a breakout of the averages of the ranking factors, including, but not limited to, the cost factor which make up the average EBI score by States so that our wheat farmers, especially in Washington, will be better prepared for the next sign-up?
Mr. SHACKELFORD. I believe we have provided a lot of that information. We will continue to provide it. In fact, we are going to have that information available by county, on the Internet within the next 2 weeks.
Mrs. CHENOWETH. OK, and you will provide it for the committee, right?
Mr. SHACKELFORD. Absolutely.
Mrs. CHENOWETH. Will you please provide the percentages of accepted acres according to productivity levels and related rental rates by States?
Mr. SHACKELFORD. We don't have it by productivity level. We can give you the average rental rate per State. We can give you the average rental rate per county.
Page 33 PREV PAGE TOP OF DOC Mrs. CHENOWETH. Could you factor in the productivity levels?
Mr. SHACKELFORD. That is not a measure we use to evaluate the acreage.
Mrs. CHENOWETH. Productivity level?
Mr. SHACKELFORD. Yes, ma'am. Roughly, cost equates with productivity, but we don't have a specific productivity level measure.
Mrs. CHENOWETH. Mr. Hebert, you answered a question similar to this earlier. Is there any way to factor in the productivity level?
Mr. HEBERT. In the EBI process, the purpose of taking into account cost is to capture or serve as a proxy for productivity. The higher the productivity, the higher the cost of the land.
Mrs. CHENOWETH. When does the Department plan to schedule this 16th sign-up?
Mr. SHACKELFORD. I don't know if you were here for the chairman's question, but in the fall.
Mrs. CHENOWETH. This fall?
Mr. SHACKELFORD. This fall. Mid to early fall by his definition. He defined fall as sometime between September 22 and December 22, and we will certainly be within that time frame. I don't make those decisions, but that is the likely projection.
Mrs. CHENOWETH. Will the same eligibility rules and county bid caps that were in effect for the 15th sign-up also be in effect for the 16th sign-up?
Mr. SHACKELFORD. We anticipate that the rental rates, the maximum rental rates available, will be the same. The eligibility criteria is likely to be similar, but has not been firmly decided. We are looking to see if there are improvements that could be made on the EBI.
Mrs. CHENOWETH. And the county bid caps?
Mr. SHACKELFORD. The county bid cap is the maximum rental rate that is offered on the land. It is on a soil-type basis within the counties.
Page 34 PREV PAGE TOP OF DOC Mrs. CHENOWETH. Thank you, sir, and I yield back the balance of my time.
Mr. COMBEST. We have a vote on at this moment. The Chair would suggest that we take a brief recess and go vote and come right back.
Let's make sure we get something very clear here. I was going to get into the area that Mr. Peterson was talking about earlier. I want to make sure, and there is no intent here to do this, but I want to make very for sure that we don't by mistake send some wrong information out there to the farmers.
And I think I understand, Mr. Shackelford, what you were saying when you say that you assume that things are going to be very similar in what you are looking for in the next sign-up. The cutoff point was 259 points, I believe. If I am a farmer, and I had 240 points, and I think if I can do something to increase 19 or 20 or 25 points, then certainly my chances are somewhat improved to get in. But I don't think you are saying--and if you are, I would like to also make sure that this is on the record that you are assuming that in that assumption that you are going to be looking for the same criteria. You are not indicating that you are assuming that that cutoff point is going to be close to the same, are you? Are you in a position to be able to say that, not knowing how many acres may be bid in or how many you are going to be able to accept?
Mr. SHACKELFORD. That is correct. I can't tell you exactly where the cutoff point will be.
Mr. COMBEST. No, I understand you can't tell us exactly, but what I want to make for sure is that we don't leave it with the farmer out there that we are assuming it is going to be somewhat in the same area of 259 points. I have 240, and I bid mine up, I do 25, and I get up to 265, and then you come in with a cutoff of 320, and I as a farmer am going to just scream about that. But based upon the fact that you don't know how many acres are going to be bid in, and you don't know how many acres that you are going to accept, again I am trying to give you an out here, Parks.
Page 35 PREV PAGE TOP OF DOC Mr. SHACKELFORD. You are exactly correct.
Mr. COMBEST. You are not suggesting that you are saying that you think that the cutoff point may be close to what it was last time, are you?
Mr. SHACKELFORD. I am saying the cutoff point will be dependent upon the acres offered and the quality of those areas.
Mr. COMBEST. Right.
Mr. SHACKELFORD. And cost of those acres offered, and the criteria used to evaluate the acreage at that time.
Mr. COMBEST. And I think that is so important, because once we have gone through this bid cycle, particularly people who have bid and were not accepted are going to be looking at the old cutoff point as trying to achieve that. And we are getting just deluged with phone calls saying, what can we do? Well, we are going to have a seminar and tell people what they can do. But one of the things we are trying to make so clear to them is don't assume that because the cutoff point was 259, that is what it is going to be in the next sign-up period, because I don't want a lot of people saying, oh, well, it is supposedly going to be about the same, and then that hurdle move substantially. And there is no way today to calculate what that hurdle is going to be, if I am correct.
Mr. SHACKELFORD. You are correct.
Mr. COMBEST. Thank you.
We will take a brief a break and return as soon as possible. Thank you.
Mr. COMBEST. Thank you very much, and I apologize for the break.
Mr. SHACKELFORD. Mr. Combest, the decision to move the line over to Highway 81 in Kansas was made on or about the 14th of May.
Mr. COMBEST. I believe that was the gentleman's question and we will inform him, and thank you for the information.
Page 36 PREV PAGE TOP OF DOC One of the things which may affect some areas more than others but certainly one in our area, and I would like to delve into it just a little bit, if I could, and I asked a question at an earlier hearing or briefing when there was not an answer yet and now there is an answer but I am not for sure what the answer is or exactly how to interpret this.
One of the things we had talked about and one of the things we will be discussing, I am sure, with all the Members or constituents, certainly what can we do to improve our land so it will be more subject to acceptances in the area, Parks, I know particularly you are familiar with grass covers on that land in Texas. And at one time we talked about planting a different type of wildlife-friendly cover, and how much would it have to be overseeded, do they have to plow it off or whatever. And I don't want to plagiarize these questions, because they are Mr. Stenholm's questions, but I have the same interest.
There seems to be quite a bit of confusion about what landowners were told or how much they understood about the actions concerning the cover crop.
He goes on to say he has two sheets from the NRCS office regarding the guidance to the field office, and if you don't have those, you should have those. Make sure they have those two sheets.
Would landowners generally have been able to see a sheet like you have to know what options they had available to them? Was there a sheet actually given to show what they had to do? Or did they have to rely on NRCS relaying this information to them? Would they have been given a sheet to say, you can do these things specifically to improve your land or your cover, or would it have just come from someone verbally?
Mr. Johnson, everyone is looking at you.
Mr. JOHNSON. And everyone else is turning around asking the people behind us.
Mr. HEBERT. Sir, the conservationists were given written EBI scoring processes, and much of that was followed up with personal discussion as well as personal training. I don't know if that answers your question precisely.
Page 37 PREV PAGE TOP OF DOC Mr. COMBEST. Yes, in terms of were they given a sheet from USDA that said yes, you can do those things or a verbal discussion, not assuming there was a difference in the answer.
But here is where the question is coming from. The same sheet indicates, via a handwritten note by one of the State NRCS folks during the last week of sign-up, a decision was made to require that landowners reseed at least 51 percent of the existing cover to get additional points. During the first 3 weeks of sign-up, it appears that if landowners agree to do any wildlife strips, they could get 2 points for every 5 percent of the field on which they planted these strips.
The question is, I am wondering if this 51 percent requirement was in place in other States or if there were different requirements throughout the country?
Mr. SHACKELFORD. The requirement should have been consistently 51 percent throughout the country. I would have to find out the details.
One of the things we found out that in some cases there were incremental points being given. That was brought to our attention by a review, and we went back to try to correct that.
Mr. COMBEST. Well, was this information on this sheet incorrect, then, where it shows that for every 5 percent of a field that is established, 2 points can be added? Twenty-five percent will get 20; 50 percent gets 30; 75 percent gets 40; and 100 percent gets 50. Is that incorrect?
Mr. SHACKELFORD. That is incorrect.
Mr. COMBEST. Was this sheet given out in the offices?
Mr. SHACKELFORD. I would have to check.
Mr. HEBERT. Mr. Combest, the problem really was in certain counties in Texas.
What we are saying, sir, is that mistakes could very well have been made in those towns, and we tried to correct them in the midst of the sign-up, on the basis of a review.
Mr. SHACKELFORD. There was a management alert from the Office of Inspector General that brought to our attention that some States were, well, it looked at several different things while the sign-up was going on to try to make sure things were going on consistently. They found in some areas they were providing incremental scores which was not allowed and not consistent.
Page 38 PREV PAGE TOP OF DOC Mr. COMBEST. Was that throughout, let's say, at a local office, Mr. Shackelford, if you were looking at this, was it the intent before sign-up started that a person would have to offer at least 51 percent?
Mr. SHACKELFORD. Yes.
Mr. COMBEST. Then why did NRCS send this out?
Mr. SHACKELFORD. I would say it was probably a mistaken understanding, and we tried to go back and clarify that. I hear a lot from Texas and was aware----
Mr. COMBEST. That is a big State.
Mr. SHACKELFORD. Yes, it is, and it is well represented.
And during the sign-up, I received some conflicting information, and I called personally to try to make sure that producers were being correctly informed of their options on improving cover.
Now, this particular case was brought to our attention by an OIG management alert. The NRCS team will answer specifically what was done and may have to consult with the State as well, but we did ensure that the correct information was provided and where people had been misinformed, it was explained to them that that was not correct and they had the option to go back and fix it.
Mr. HEBERT. Sir, this is the first that I have seen the sheet and the first the chief has seen it. We would like to work with the staff a little bit to get you the answer you are looking for. It could have been that our people understood they had flexibility in this manner and were trying to help the producers in this regard and got it wrong, and we may very well have made a mistake here.
Mr. COMBEST. Well, the reason this is important is because this is one of the, if not the major area in which improvement over existing CRP, Mr. Stenholm's district, my district, and others in Texas, could be made for a new sign-up period. And one of the questions which kept coming to me there and which I posed at an earlier hearing, was how much needs to be destroyed or does it have to be destroyed, can it be overseeded, can it be stripped. And at that point there was not an answer, and my response to my constituents was, I don't know, nobody knows the answer to that yet.
Page 39 PREV PAGE TOP OF DOC If they went in there with that intent and were given that information, it is kind of tantamount to the line of Kansas; gee, everybody had assumed that and we are going to put it over here.
Granted, there was a miscommunication in the Department, but to that farmer legitimately going in and saying, what do I have to do, and they say you have to do this and they go out and make plans to do it when the decisions were being made, and then if the person didn't come up to 259 points their bid would be rejected. I mean, that left them out. But if a person was making plans based upon information which, from the beginning, was the intent in your shop, Mr. Shackelford, that somebody sent out down the line, this kind of puts them into a situation in which, you know, they didn't create the problem and they were trying to get answers to it and the answers were not that correct.
Mr. HEBERT. Sir, just for the record, I would like to note that the staff tells us that any producer in Texas who had an incorrect EBI score on the basis of that early information was corrected before the sign-up was completed, and so their accurate score was reflected in the ranking and selection.
Mr. COMBEST. That is great, and I am very glad to know that.
This sort of comes back to the discussion of one of the things that I would be hopeful would certainly be considered and that would be that there would be a review as the letter that came down yesterday by a number of Members had requested that for that gap between the $16.2 and the $19 million that was in the budget number, that that be considered to be looked at in terms of potentially picking that up at a level, at a date sooner than the mid- to sometime in the fall sign-up period which comes later on. I would certainly hope that the Department would give that very serious consideration because the work is basically done. People's bids are in so I would be remiss if I didn't say here we would certainly hope you would take a look at the potential of doing that.
Page 40 PREV PAGE TOP OF DOC Mr. Minge?
Mr. MINGE. Thank you, Mr. Chairman. I would like to turn to the question of the sign-up process and how you determined where the cutoff level is with respect to the continuous sign-up. Is there a threshold level for cutoff?
Mr. SHACKELFORD. Land that is eligible for the continuous sign-up is automatically eligible. It does not go through the EBI process. The continuous sign-up practices give us such a high level environmental benefit that we automatically accept those acres.
Mr. MINGE. Regardless of the rental rate they bid.
Mr. SHACKELFORD. They have to bid within the maximum rental rate available for the land. If they offer the maximum rental rate for the land, they are eligible. If they offer more than the maximum rental rate, they are not eligible.
Mr. MINGE. So to the extent any land might have missed being classified as eligible for continuous sign-up, those producers, those landowners ought to resubmit a bid with that type of information promptly.
Mr. SHACKELFORD. Yes, sir. In our letters to producers, we encourage producers to consider whether they have land within the offer that was not accepted but would be suitable for enrollment in the continuous sign-up, and we certainly want to work with them and look and see where there are options to enroll that type of land and keep that land protected. That was one of the most important things we wanted to tell them right away when we informed them that they weren't accepted for the general sign-up.
Mr. JOHNSON. Mr. Minge, also as we work with landowners that are bringing land back into protection we will work to maintain some in buffers so they will have plenty of information on the continuous sign-up.
Mr. MINGE. Now, with respect to land that has been in the Conservation Reserve Program and would be coming out this winter, there is a real feeling that that land has to be well tilled this fall if it is going to be productive in 1998. There are many landowners who feel that that land ought to be in the Conservation Reserve Program and they would very much like to participate. They did not meet the cutoff here in 1997, spring 15th sign-up, but they expect if they were given a fair shot at it they might meet it in the 16th sign-up.
Page 41 PREV PAGE TOP OF DOC But they are sitting on the fence because they don't want to plow that land up because they feel that is incompatible with the conservation commitment that they have made, yet they are unwilling to take the risk that they will again be disappointed and then find the land is neither in the program nor productive for the 1998 crop year.
I would like to ask if there is any consideration being given to some mechanism to deal with this situation and to provide those landowners with some encouragement to participate in the 16th sign-up and to forgo all tillage?
Mr. JOHNSON. First of all, we are not in agreement with those who say you have to tillage in the fall to prepare this land for spring crops, and we will work together and are working together with the Crop Extension Service to encourage farmers not to do heavy fall tillage on this land.
We know of a number of practices we can put in place to bring the land in and make it very productive next spring for those who are going to farm it. So my answer is yes, we are working with them and we probably should accelerate it. On the other hand, they will have an opportunity, all of them, to try to bid in for the next sign-up as well, and add to that the buffer initiative we will be working with them on.
Mr. MINGE. One concern I have is that the prevailing wisdom is land that has been allowed to lie fallow for 10 years will not produce a good crop the first year it is broken up, and a fair amount of preparation is needed for it to produce any crop to cover the cost of operating the land.
Mr. JOHNSON. We have had a fair amount of experience with that. We have had a number of very good, carefully controlled studies done on it, and there are ways of bringing it in, even with no till, where you can bring it out and we will work with land observers on that.
Mr. MINGE. Well, I would encourage that those programs be widely publicized so this dilemma that many landowners feel they face do not scuttle the program.
Page 42 PREV PAGE TOP OF DOC Mr. HEBERT. Sir, we would like to work with you and other Members in the districts in getting the word out that there is no need to lose all the benefits of the CRP just because it comes back into production. We are prepared to work with them, and in terms of conservation that would be tremendous and we would love to have that opportunity.
Mr. MINGE. Another concern that I have are the rental rates that were used as a basis for bidding. I know from some personal experiences working with farmers over the last 10 years that in many cases they are trying to figure out who to maximize the likelihood of being accepted for enrollment and at the same time maximize the term they have on their land. It is a natural tendency and goes on all around the country.
It is my observation that in different counties there are different theories of what the successful game is to be included in CRP, and this is based not just on coffee shop talk, it is based upon advice given by people in RCS, FSA, the extension office, and a variety of other sources of information. And it is my impression, at least, that the dramatic differences that we see at county and State lines is due to more than just accident.
I am wondering what, if anything, you are trying to do to ensure greater uniformity of opportunity and to avoid some of the rather unsettling disparities that are occurring in State and county lines with respect to enrollment in the programs.
Mr. SHACKELFORD. In terms of rental rates, we went through a lengthy process starting last July from the very local levels, from the county committees, working with people within the county who were knowledgeable in land values and agricultural land values within the counties. We worked up through the State committees. NRCS worked with us very closely in the counties, the State level and at the national level. We did a review, compared those rates to NAS data and to other information we had to try to ensure we had as much, I guess you would say uniformity or at least that our rates clearly reflected the differences in rental rates throughout the Nation and throughout States.
Page 43 PREV PAGE TOP OF DOC And within a given county the rental rates vary. We have the county average, but the rental rates vary above and below that depending upon the relative productivity of the soil. We provide the producer the maximum rental rate that we are willing to pay on that land. That producer, then, has the option to offer that bid at that rental rate or a lower rental rate.
Mr. MINGE. I understand that. I am interested in what steps are being taken to make sure that disparities that have been disclosed from this 15th sign-up don't continue to haunt the program. Because if you look at the map the 15th sign-up, the unadjusted environmental benefits index is color coded. This is not a numbered page in the book, but that is the title at the top of the page. And Mr. Peterson has referred to this, I have preferred to this, but if you look at the color coding gap or jump, if you will, at the Minnesota border with North and South Dakota, it is a difference of two colors in all except I think one county. Two counties. And this is probably 15 or 20 counties, North and South. And I am just saying that there is more going on than just the fact that you are trying to set up a good rental rate system.
Mr. SHACKELFORD. Well, sir, the unadjusted ABI does not include rental rates, so they are not a factor in this what you are pointing out.
Mr. MINGE. Then it is more disturbing. Because the land as you go across the State line couldn't change, it is the same land.
Mr. SHACKELFORD. Well, sir, the border between Minnesota and North and South Dakota is not an artificial line, it is the Red River.
Mr. MINGE. But it is the same land. It is the Red River Valley.
Mr. SHACKELFORD. Well, whenever we see a difference along any boundary we have got to see is there a reason for that difference. The bids in Minnesota were primarily at high rental rates, were not as many wetlands, you had very low erosion rates, and you had a lot of wetland offered in North Dakota which scored highly with lower rental rates. When you add all that together, they make a big difference. And while the line may be at that border, we may be comparing opposite sides of the counties. The one thing we know in Minnesota, the things we have found so far, there are significant differences in the erosion and the cost when compared to neighboring States.
Page 44 PREV PAGE TOP OF DOC Mr. MINGE. Thank you, Mr. Chairman.
Mr. HEBERT. Just to add to that, as we said with Mr. Peterson, we will be happy to work with you to examine whatever particular cases you want. We have found by and large that even comparing across counties in this manner, hides a lot of real differences that EBI in fact has captured, and we are finding that the EBI is working in many ways as it was designed. Maybe the design will need to be changed at some point, that is a policy issue, but the design is working in many cases, and we will be happy to visit with you to show you that is in fact the case, and if there are mistakes made either in terms of training our people or its application, we are going to correct that as well.
Mr. SHACKELFORD. One other point on Minnesota, a significant portion of the State is contained within a number of different priority areas. Minnesota and Washington were the only two States given a waiver to exceed the 10 percent cropland limitation to areas. What that means is a lot of land is eligible to be enrolled but it still has to compete with all other bids. Some people made offers of land that we would not have accepted were it not in a priority area, and that is going to lead to a higher level of rejection. Some of those areas that don't meet the minimum eligibility provide other benefits in other areas that they score high enough to be accepted. But that is one of the things that may lead to greater disappointment for some producers.
Mr. COMBEST. Mr. Moran.
Mr. MORAN. Thank you, Mr. Chairman, and thank you for the opportunity to talk about this topic.
I appreciate the Department in a number of instances working with us to try to solve some specific problems. One of the problems I particularly heard back from a time when people were being told they were ineligible to bid was soil types.
Are there certain soil types that because of that type of soil they were prevented from being eligible or could never overcome the other factors? Every time I would talk to a landowner who was denied the ability to even bid, it was because, I was told I have soil type A.
Page 45 PREV PAGE TOP OF DOC Is that an accurate analysis of what happened, and if so, why is that a solely determining factor?
Mr. HEBERT. The statute requires that the land be highly erodible before it can become eligible unless it meets other criteria, like Parks mentioned. If the State determines a conservation priority area is established, there might be land within that area that is not highly erodible that is eligible because it is meeting high priority environmental purposes in that manner. But by statute the land is not eligible unless it is highly erodible.
Mr. MORAN. And that can be determined solely by soil type?
Mr. JOHNSON. No, it is not just soil type; it includes climate, it includes slope, it is a formula we used to determine erodibility.
Mr. MORAN. Well, I can tell you time and time again the story was I went in and the sloped land didn't get in because it was soil type such and such, but the land that was flat was included in the program because it was a different soil type, and there is a lot of dissatisfaction with the way that soil types played in the eligibility issue.
Mr. HEBERT. Sir, we would be happy to look at any specific examples. People have written in and our field people have looked at it and said----
Mr. MORAN. Well, NRCS went back and evaluated a number of counties in Kansas and that may have been of some help. Will the NRCS acres that expire in 1998, would they be eligible for the 16th sign-up period some time this fall?
Mr. SHACKELFORD. We assume that will be the case.
Mr. MORAN. And this may have been asked and answered, but will the same criteria apply?
Mr. SHACKELFORD. That is not decided at this time. It is likely the criteria will be similar but that is one of the things we are doing now is reviewing the results of this sign-up to determine whether there will be improvements in the criteria.
Page 46 PREV PAGE TOP OF DOC Mr. MORAN. Same question with the maximum rental rates, will they change?
Mr. SHACKELFORD. The maximum rental rates will remain in effect.
Mr. MORAN. If you bid and then concluded because of a portion of your land not being accepted that you didn't want to participate in the CRP, then you suffer a penalty, is that accurate, and is there any appeal for folks who bid their land and only part of it is accepted?
Mr. SHACKELFORD. Those owners who made a bid and withdraw that are assessed a penalty, because we use this offer to turn down land in other areas because this land is more eligible. Where there are extenuating circumstances, we have always had options to grant relief. It would depend upon the particular case.
Mr. MORAN. Any suggestions of what extenuating circumstances might consist of?
Mr. SHACKELFORD. We would have to look at the particular circumstances of the case involved.
Mr. MORAN. I will try to come up with the circumstances, but it would be helpful if I knew of them in advance.
Mr. Chairman, my final question is with regard to one raised by the gentleman from Oklahoma. Let me suggest that the USDA did not add to the definition of ''arid land'' that was not barren in Kansas, moving the line from the west to the east, although it does not perfectly reflect the arid part of Kansas. In fact, the line ought to be further east. You did not add territory that received substantial rainfall.
So I am somewhat concerned that you would suggest that the answer is to move the line in Kansas back to the west, when in reality it yet does not reflect all the land in Kansas that is arid, because that line would be to the east of where it is today. So I think the solution does not lie in what you suggest, but it lies in determining what actually is arid, and we would be glad to work with the Department in that regard.
Mr. SHACKELFORD. I realize I might have spoken too quickly in that. I guess what I could say is we will try to determine any method that you or Mr. Lucas or anyone else has of a better way to draw that line. We are always open to ways to improve the programs. We will have to try to make sure it is consistent as much as possible and done in a way that is fair to all producers, yet still maintains the integrity of the program, and I most point out that all these producers at the time they signed the contract, the contract says it runs until October 1 and everyone agreed to protect the land until then. These are options we are trying to offer the producers to make it easier for them to return the land to production and we need to not lose sight of that.
Page 47 PREV PAGE TOP OF DOC Mr. MORAN. Well, we are trying to make the program work and provide some common sense and judgment, and I appreciate what you just said. Part of the problem is the timing of the regulations and the people's ability to respond. So I think their goal is to be a lot more flexible, not to be more rigid.
Thank you, Mr. Chairman.
Mr. COMBEST. Mr. Dooley.
Mr. DOOLEY. I have nothing at this time.
Mr. COMBEST. Mr. Smith.
Mr. SMITH. Thank you, Mr. Chairman.
Of course, in Michigan, we are concerned. We only got accepted about 30 percent of the land bidding, and then you compare that with some other States such as Kansas that I understand is approximately 90 percent. Somehow there has got to be a disparity.
I think part of my question is will you make the formula and the criteria for the natural resource conservationist somewhat arbitrary and evaluation more consistent so that you don't favor some States over the other like apparently happened in this last selection decision?
Mr. SHACKELFORD. Sir, I think our criteria was very objective and was not arbitrary. The primary problem in Michigan is that less than 30 percent of the land offered met the highly erodible land standard. So less than 30 percent of the land offered was highly erodible, which is the first thing we look at to determine whether the land is going to come in.
Mr. SMITH. Well, something is wrong, maybe I need some private tutoring on this, but most of the land rebid was land coming out of existing programs. So there is some discretion and it is somewhat arbitrary on what the soil conservationist determines in terms of the erodibility proportions.
I am also concerned with the somewhat arbitrary determination of a State that can say that we can bypass some of the erodibility requirements for other sensitive land in that particular State. I mean, there is something more than the people in Michigan are dumb and the people in Kansas are smart to have that kind of difference in terms of the amount that was accepted on those bids. They either have more guidance, more information, or more something. I hope we can improve this next sign-up, and I hope you seriously consider 19 million acres rather than 6 million acres at the next sign-up.
Page 48 PREV PAGE TOP OF DOC My next question is on the average rental value. I am told that the average rental value to other farmers for farming some of that land in Kansas, it ranges between $15 and $25. Is that correct or not correct? And what is the relationship of the real land rental rate for farmers in relation to the bids that you accepted?
Mr. SHACKELFORD. We think that our rental rates reflect as closely as possible the actual rental rate for the land.
Mr. SMITH. Of course you think that.
What is the rental rate that farmers are willing to pay for that land that was accepted in Kansas?
Mr. SHACKELFORD. $37.
Mr. SMITH. No, not your rental rate, the rate that other farmers are willing to pay for that land.
Mr. SHACKELFORD. Sir, that would vary by each piece of land----
Mr. SMITH. What is the average for Kansas?
Mr. SHACKELFORD. We would think the average would be our maximum rental rate.
Mr. SMITH. You didn't examine--you don't know what farmers pay when they rent this land from other landowners?
Mr. SHACKELFORD. That is the basis on which our rental rates are set. We started in July----
Mr. SMITH. What is it for Kansas? What is your average going rental rate for farmers rending that land for farming?
Mr. SHACKELFORD. I have that somewhere. I don't have that immediately at my fingertips, but we can----
Mr. SMITH. How did the going rental rate for farmland fit into your decisions on whether that rental rate was too high? Did you actually take--how did you determine average rental rate for farmland in, throughout the country?
Page 49 PREV PAGE TOP OF DOC Mr. COMBEST. If the gentleman would yield, Kansas, according to the chart, is $37.
Mr. SHACKELFORD. That would be for the accepted bids on the chart we have, I believe on the average rental rate, was $37. That is not necessarily the maximum or the average maximum, because many producers, although a few months ago everyone was complaining that our rental rates were too low, 60 percent of producers bid below the maximum rates we offered.
Mr. SMITH. How did you determine the rates?
Mr. SHACKELFORD. We started last July at the local level with the local farm service agency, county committee, with the local NRCS people, working with anyone within the county who had knowledge of land values, whether they are bankers, other farmers, we tried to establish the rental rates on the county basis, then the State level. There was a review at the State level and then we had a national review which compared it to all other rental data we had, because we had some differences across county and State lines and we tried to ensure we didn't have differences or, if we did, they were based on a real reason for the differences. In fact, the State director of the farm service agency in Michigan participated in the task force that reviewed those rental rates.
Mr. SMITH. I know we did in Michigan, and that was one of my concerns, is that the Federal Government shouldn't be paying rental rates that drove those rental rates up for farmers who want to continue farming, and so they are now forced because of the increased demand of the Federal Government paying a higher rate, to pay higher rates than they did before the CRP.
Mr. SHACKELFORD. And we agree and that is why we went through this review. Because for rental rates established earlier in the program, there were specific goals that the Department had to meet, there had to be specific acreages enrolled by a certain time, and some of the land that went in at earlier rates went in at rates higher than what the actual rates were.
One of the key things of this sign-up was that we got our rental rates back to reflecting what rental rates truly are.
Page 50 PREV PAGE TOP OF DOC Mr. SMITH. Do you have any way of reviewing the figures that are given by the soil conservationists in terms of the variation between different conservations and different States on what they assigned as the erodibility in other indexes to finally determine the score on that particular land? Do you have a way of reviewing it?
Mr. SHACKELFORD. Yes, sir, and maybe I could try to answer your second question, which we didn't really get to respond to.
We go back and look at the things, and the chief will probably want to talk about what they do with the NRCS. But we review anything that tends to stand out and try to determine the reason for that.
Now, the difference, you talked about producers in Michigan versus producers in Kansas. It was not on the erodibility of the land. That is not a producer decision. That is an objective fact of what the land's erodibility index is. And in the case of the land offered in Michigan, a very small amount of the land offered was highly erodible land.
Now, a lot of that land was eligible to be offered because that is a national conservation priority area for the Great Lakes region, and land in Michigan that is within that priority area is basically eligible to be offered. We can accept the application, but we make very clear it is still going to have to be compared to all other land that is offered and be evaluated, and where this land is not highly erodible, it is not as likely to be accepted.
Mr. SMITH. Well, I know, and I suspect you know, there is an arbitrary factor in that erodibility index because we are--our soil mapping and soil erodibility mapping that we do have is generally by larger areas, and if a smaller area of that field, for example, the hilly area is bid in, there is no way except for to include an arbitrary judgment on the basis of a conservationist.
Mr. SHACKELFORD. I believe the chief will give you a more specific answer. I would say we evaluate each specific piece of land based on the characteristics of that land. If somebody thinks we have done something wrong, we have an appeal process and they certainly have a right to appeal.
Page 51 PREV PAGE TOP OF DOC Mr. JOHNSON. Mr. Smith, we review these every day, and we certainly have since the 1995 farm bill, and we defined highly erodible land the way we did. But for this sign-up, we agreed that if you had even one-third of your field highly erodible then it qualified as a highly erodible field. So we have tried our best to take into consideration the fact that maybe part of the field is highly erodible and not others. If anything, I would say we erred on the side of--well, I don't believe we have erred, but we have certainly allowed to open it up and allow as many people to apply for this and compete as possible, but in doing so that means we have more people disappointed.
Mr. SMITH. Would your IG review be made public and can we review what your IG is going in their review of these tests.
Mr. SHACKELFORD. Yes, sir, that information is public.
In addition to the IG we have in FSA, we are our county office reviewers that go out, and you have the O&E, which is essentially the same kind of review for NRCS, and to make sure things are done uniformly throughout the Nation.
Mr. SMITH. Well, as you might guess, my frustration reflects the frustration of many landowners in Michigan that the information they received and the assistance they received and the tremendous percentage of turndowns in the bids in Michigan was frustrating to them, and I hope USDA and our county offices can work with people in this next bid go-round so everybody is under the same rules.
Mr. SHACKELFORD. We understand that concern and we will try to work with you.
One of the things in your State and several other States, while you had a very low acceptance of CRP, the upside is you have some very productive land with pretty high rental rates, and a lot of people would rather have the good farmland and good benefits.
Mr. COMBEST. Mr. Peterson.
Mr. PETERSON. Thank you, Mr. Chairman.
Page 52 PREV PAGE TOP OF DOC Following up on my questions from the last round, it appears to me that in three of the five counties that are along side the border, that the farmers got 25 points on average less than the farmer across the river on exactly the same land.
My question is, if that fact is true, which I believe it is, is there a possibility that this could be rescored so that we are on a par with North Dakota so that the land gets the same credit as North Dakota, and if that happens, then a lot of these people will be above 259 and is there a possibility that they could get in? Because it is not fair, either North Dakota should be at our level or we should be at their level. It is not fair to bring in land on one side of the river when it is a clear discrepancy when it is the same type of land.
Mr. SHACKELFORD. We will certainly be willing to look at the points you have and see if a mistake has been made. In many cases the land is not the same. In this case it may be. We will have to look at it to determine that.
We have looked at a number of areas where people felt things were exactly the same and we have found there were differences. If the Department has made a mistake, we are certainly willing to go back and look, and where we have made a mistake, we will correct that.
Mr. PETERSON. So if we prove this and that is the case, then under the new farming law, if they go over 259 could they be brought into this sign-up?
Mr. SHACKELFORD. If we find we have made a mistake and they qualify and should qualify, we have an appeal process.
Mr. PETERSON. Is this part of this appeals process that was part of the rejection letter, I think until July something we could appeal; is that part of that process?
Mr. SHACKELFORD. There are normal appeals, yes. That would be part of the normal appeals process. Also, if you bring something to our attention we will go back and look at it and we will certainly act to treat people fairly.
Mr. PETERSON. Well, I think it is an issue with Mr. Johnson and maybe we could get together at your convenience as soon as possible and take a look at this.
Page 53 PREV PAGE TOP OF DOC Mr. JOHNSON. We will get together with you. We are also looking county by county where we may have made mistakes and, if so, we don't need to wait for appeal. We are doing the best we can to work on this.
Mr. PETERSON. I look forward to it. Thank you.
Mr. COMBEST. It is my understanding that the Farm Service Agency made a recommendation of 19 million for the number of acres to enroll. Is that correct?
Mr. SHACKELFORD. That is correct.
Mr. COMBEST. Did other agencies outside of USDA make recommendations to USDA about the number of acres to accept in the program?
Mr. SHACKELFORD. Yes, sir. As part of putting together the CRP, we have worked with several other agencies in developing the program and in making the decisions. Not all of the agencies made comments. The EPA recommended 18 million acres and the Fish and Wildlife Service recommended 19 million acres.
Mr. COMBEST. And those were the only other two----
Mr. SHACKELFORD. Those are the only other two that I am specifically aware of.
Mr. COMBEST. Did they justify the number of acres they recommended in their recommendations or were they just recommendations?
Mr. SHACKELFORD. The EPA recommendation, as I remember it, was fairly specific. The Fish and Wildlife Service was not specific.
Mr. COMBEST. Is that information that the Department of Agriculture has the authority to provide the committee at our request?
Mr. SHACKELFORD. I assume if you request it we will provide it.
Mr. COMBEST. Thank you.
I want to go to one of your favorite subjects, air quality and wind erosion. Do you have an estimate of how many of the 16.2 million acres accepted into the program were accepted in due mainly to wind erosion concerns?
Page 54 PREV PAGE TOP OF DOC Mr. SHACKELFORD. We don't know that specifically. That would be something we could look at to find out.
Mr. COMBEST. Then I presume the same would be true for water erosion?
Mr. SHACKELFORD. That is correct.
Mr. COMBEST. If you could do that, that would be very helpful.
Mr. COMBEST. In one of the areas that I would like to work with you on as well, and we of course talked about this wind erosion thing, and I am repeating myself, but each hearing is a different record, has been the particulate matter proposals of EPA, Environment Protection Agency, and its impact on agriculture--and the area of west and north Texas that I represent is very susceptible to wind erosion and therefore dust blowing and has an effect that is measured by the EPA as particulate matter in the air.
I recognize that in this new program there was a wind erosion consideration that had not been before, and I still think it ought to be as high as wildlife considerations, so we will keep working on that.
But one of the concerns that has been pointed out in an area surrounding Lubbock, TX, there was a priority area on wind erosion, and there were points to be awarded using, broken down by zip codes, that if you were in a certain zip code you would be eligible for at least consideration of points in a wind erosion area.
The method seemed to be as we begin to look at those that the areas that were the most eligible for points because of the wind erosion factor were areas that actually lay within the cities, the towns, rather than the farmland, which would be the area that would be effecting that airborne dust. And I don't know whether you are able to answer if there were potentially, or if you are considering changes for the next sign-up period, but that would be an area we would like to work with you on.
Mr. SHACKELFORD. Yes, the air quality factor was a new factor added. One of the bases was your personal urging to look at that. It was a new factor for us. It is certainly a case where there may be ways to improve it, and we would certainly welcome suggestions and ways it can be improved.
Page 55 PREV PAGE TOP OF DOC Just so you understand, people like to talk about zip codes. It was a location; that was an easy way to determine the location of the land. The factors were primarily based on the soil types and the matter in the air, and I am not an expert on this kind of thing so excuse me if I don't use the exact terms, but we looked at the land's location and its location in relation to the population centers and prevailing winds, basically being up wind of a population area.
Mr. COMBEST. Right. And I don't know whether in that consideration came previous air quality measurements, but obviously those are much greater in a community than they would be measured out in farmland. So it would be interesting to discuss that as well.
Mr. SHACKELFORD. On that we worked very closely with the EPA in developing that measure.
Mr. COMBEST. On the existing cover crop where you have grass stands, there is still a question I am going to be asked or have been asking and I need to try to see if I can narrow this down somewhat.
We know from earlier discussions that the criteria that is being used is 51 percent of the existing cover, reseed at least 51 percent. Does that mean you have to plow up and reseed? Can you overseed, can you do that in strips? What is the requirement to be able to maximize that new cover in terms of additional points?
Mr. JOHNSON. I think it depends a great deal on the soil and the conditions where we are and we have been trying to work with landowners to do it in the best way possible. We obviously aren't going to plow up sod if we can interseed it or seed over it or if we can bring it in a strip at a time. We don't want to make it more vulnerable than necessary. But it depends a great deal on where we are and the soil type and the cover that is on there right now.
Mr. COMBEST. Is that going to be then determined on a farm-by-farm basis or a region-by-region basis? Because there can be substantial differences on farms that are very close to each other in terms of what actually might be required to get the proper stand of a newly seeded cover.
Page 56 PREV PAGE TOP OF DOC Mr. JOHNSON. Again, it would be based on the decisions in that area, the soil types and so on, and then based on our field office tech guides, which are----
Mr. COMBEST. But that still----
Mr. JOHNSON. So it could be different for one farm than the other because of the soils that are there.
Mr. COMBEST. So it wouldn't necessarily be put into a region and have to comply--it could be looked at on a farm-by-farm basis?
Mr. JOHNSON. It should be.
Mr. COMBEST. Good, I would hope so.
Mr. SMITH. Would the gentleman yield on that?
Mr. COMBEST. Yes.
Mr. SMITH. Do I understand that you said on your bid you were going to reseed and improve the cover, you got additional points regardless of the quality of the existing cover?
Mr. JOHNSON. No, if the existing cover was good, native cover and good wildlife cover, we certainly didn't ask people to plow that up.
Mr. SMITH. No, no. You got more points in. You said you were going to improve the cover and reseed.
Mr. SHACKELFORD. No, sir. You only got points if you offered to put in a cover that was better than the cover you had. If you had good quality, good native grasses, you got those points, and in fact you got an additional 10 points on the cost factor because we would not have to go in and spend money establishing a cover.
Mr. SMITH. But nobody looked at these covers. Nobody came out to the farms and examined the cover on the fields that were bid.
Mr. SHACKELFORD. We have a record of what was established on the farm.
Mr. SMITH. Ten years ago, on what was established on existing CRB contracts from 10 years ago.
Page 57 PREV PAGE TOP OF DOC Mr. SHACKELFORD. And we do spot-checks throughout the term of the contract.
Mr. SMITH. Nobody has spot-checked most of the farms in our area to see the cover. So I disagree with you on that.
My impression is, as I understand the program, if you said you were going to improve the cover and reseed, you got additional points, and somebody didn't come out to your farm to see the quality of the existing cover. And you are saying that is not true. If you said you were going to improve the cover by reseeding, it was my understanding you got additional points.
Mr. SHACKELFORD. If you did not have a high quality cover and you said you were going to improve the cover, yes. If you felt you had a good quality cover out there existing already, we would give you the credit for the cover you had. If necessary, we would go look at it.
Mr. COMBEST. My time has expired and I will let the gentleman be recognized on his own time after Mr. Minge.
Mr. MINGE. Thank you, Mr. Chairman.
I would like to continue the discussion about cover, and one of the reasons why I think that there is a fair amount of dissatisfaction surrounding some of these issues is that people in the field were either working with the program or are working with farmers and with Federal employees, such as county extension agents, have concluded that if you left good cover in place, you did not receive any extra points, you only received points if you plowed up and would put in native prairie grass, that if you had received extra points for that, that they may well have been in the program.
So my perception, Mr. Shackelford, is that there is some gap between your understanding of how the program is designed and operated and how it is being operated at the field level in some cases. I am not sure what the IG report will show, but I think that is leading to some of the dissatisfaction that is emerging from the landowners that are contacting us.
Page 58 PREV PAGE TOP OF DOC Mr. SHACKELFORD. I think there is a misunderstanding in what we mean as good cover. We are talking about good cover for wildlife purposes, getting additional points for the quality of cover for wildlife. We may have single stands, monocultures of taken grasses that were put in that, yes, they protect the land from erosion, but they do nothing for wildlife. They have had very poor quality in over 10 years. The quality of that wildlife habitat is greatly deteriorated. If we drug it out to 20 years, there would be major deterioration. We have let people go back where they have established those types of covers and put in native grasses or mixed legumes, depending on where you are, that provide much greater wildlife benefits. So there are people that may tell you they have good cover but they may have a monoculture of a specific grass that does not provide good wildlife benefits so they don't get wildlife points for it.
Mr. MINGE. All I am trying to tell you is that the Federal officials that are in the field don't feel that it makes sense. It is not always farmers that we are hearing from. To some extent it is county agents, and I think that this is feeding some of the unhappiness, and I think it is important to somehow address so that everybody is speaking off the same page.
As you have explained it, it sounds pretty persuasive to me. But on the other hand, if I go home this weekend and hold a meeting and have it come up, it will sound like it is coming out of a different book. And therein lies, I think, some of the frustration.
I would like to move on to another issue and that is that many people saw that if the rental rate in their area would be acceptable for a CRP was, let's say, $75 an acre, and although their land was erodible, it did have rental value that will approach that and they would say we will bid in at $55 an acre.
Here you have someone who is forgoing a fair amount of economic value on their land because they feel that participation in the Conservation Reserve Program is a community good and it is an importance for their own priorities, but they need some compensation. The question I could like to pose is, shouldn't some recognition be given to the willingness of the landowner to forgo economic value to that land in return for the greater conservation benefit to the region? And I would like to urge that some consideration, discussion be held on this as you move into the next sign-up.
Page 59 PREV PAGE TOP OF DOC A parallel point has to do with the cost share issue, and as I understand it, if a landowner did not request cost share to establish native prairie grass or undertake some other activity for which cost share might be eligible, that landowner received 10 points for that decision. But on the other hand, if the landowner bid under the rental rate that was prevailing in the area, there would be no recognition of the fact that the landowner did that. And really, there is some similarity between what the landowner agreed to do as a part of the bid process.
So I am just, again, I guess I am not asking either for a debate or a discussion on it, because that yellow light is on I won't be able to get to my next point.
Another concern that I have is this question about the early sign-up is going to haunt us, and Mr. Johnson, I really am pleased with the commitment that your agency has made to make sure that minimum till and no till practices and a variety of other things may work with respect to this land if indeed it has to go into production to be providing compensation or ownership interests. But we are hearing on a consistent basis that some type of effort ought to be made to have a sign-up and have a decision about acceptance before frost sets in, and if there is any way that you can do that, I would urge that it be done.
Because I think regardless of how good an effort you make to educate people in the area, there still is going to be this prevailing wisdom that is hard to displace in a 2 or 3 month publicity effort. So I throw that out, and urge you, Mr. Smith, to consider some mechanism that would allow that type of sign-up before a heavy frost is in the ground.
Mr. Chairman, I appreciate the leave to finish that question. I yield back the balance of my time.
Mr. COMBEST. At least the Chair narrowed down the parameter for when fall is; we need to narrow down a little bit when frost comes. It is going to be a little bit different in your country than in mine.
Mr. MINGE. It is not when the frost comes, it is when the frost is in the ground, and I would say, speaking to that issue, it probably would be in the neighborhood of November 15 in the southern to central Minnesota area, and as you get up towards in the Canadian border, probably November 1 is pushing it.
Page 60 PREV PAGE TOP OF DOC Mr. COMBEST. I appreciate very much your coming today. I think you helped us to be able to answer some questions that we had. I will once again reiterate we recognize the pressures that were put on USDA. I would be remiss if I didn't say that we have closely watched the situation, as I am sure other Members did in their districts, of cooperation, interagency and interdepartment, and I have to say there was some concern that was raised to us by people who are employees of USDA about the cooperation, not necessarily at the Washington level but up the chain. I think that is understandable in a crunch period.
But I certainly would be very concerned if we have the same reports occurring again, and that in itself could be a matter for a hearing on its own, and are closely watching that to make for certain that the people who are out in the field, having been one myself, on that side of the counter from the farmers and occasionally the farmers get over that counter and get right in your face, we would certainly want there to be a very good relationship between the State offices and the county offices as they are trying to help the farmers, and we will be watching that very carefully. I appreciate very much your being here today. I am sure we will be in touch.
The subcommittee is adjourned.
[Whereupon, at 12:05 p.m., the subcommittee was adjourned, subject to the call of the Chair.]
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