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USDA Media Conference Agriculture Secretary Vilsack Reassures Farmers and Ranchers in States Affected by Extreme Weather, Announces Changes to CRP to Assist Producers Impacted by Severe Drought Conditions

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Susan: Thank you for joining us for today's media briefing.

Here in the studios, Agriculture Secretary Tom Vilsack talking about efforts to provide an effective safety net and disaster assistance to farmers and ranchers. And, of course, they have had some challenging times as of late with floods, drought, tornadoes, and other natural disasters.

To talk about this, press star one. Again, press star one on your touchtone pad if you'd like to get in on the discussion.

Now, here is Secretary Vilsack.

Secretary Vilsack: Susan, thanks very much, and thanks to all who are on the call. I apologize for being a minute or two late.

There is no question that the United States has been hit with a number of unique and rather significant disasters over the last several months historic wildfires in the southwest, historic number of tornadoes in the southeast and southern parts of the country, extraordinary drought, flooding conditions in the midwest has really challenged us.

But USDA has been up to the challenge. Just this year, 913 counties have been declared secretarial disaster areas, which obviously opens up opportunities for producers in those 913 counties to receive assistance. That is over 26 states.

In the same period of time, we have obviously begun to pay indemnities on crop insurance. We anticipate that these obvious these numbers will obviously grow significantly, but as of today RMA has already paid out $693 million in claims paid to date. In addition to the $693 million of crop insurance payments, we have also paid out to date $114 million to livestock producers under a number of disaster programs under the 2008 Farm Bill; $30 million has been made available to producers in the form of emergency loans.

We have also indicated for several hundred producers that they may take advantage of the disaster setaside, which would allow them to put off their annual payments to FSA for a year in order to get them back on their feet.

In addition to all of that, we have also provided well over $27 million to producers in communities in 25 states in the form of conservation resources to allow them and to assist them in debris removal. We have, to date, in the last two years, paid out over $2.6 billion in SURE payments as well.

And it's not just the RMA and FSA offices of or the NRCS that has been involved in disaster assistance. We have also been working through our nutrition assistance programs to provide 1.1 million people in 466,000 households across 11 states who have been hit hard with nutrition assistance under our disaster SNAP program, $149 million provided in additional benefits to those 1.1 million folks.

In addition, the rural development has also made available up to 30,000 units, housing units, for those who have lost their homes as the result of a disaster. So it has been quite busy.

As folks want to learn more about what USDA has been engaged in on the disaster front, I would encourage folks to take a look at the www.usda.gov\disaster website. That's usda.gov\disaster.

Also, there is a government-wide website that provides additional assistance for folks who are looking for programs and help, and that is at www.disasterassistance all one word .gov.

We also recognize that these times have been difficult, particularly on livestock producers, farmers, and ranchers in drought-stricken areas. And so today we want to take this opportunity to announce two modifications or changes to the conservation reserve program.

We have modified the program, the CRP program, in two significant ways as a result of folks who are suffering from drought. First, the period normally allowed for grazing, emergency grazing, lasts through September 30, 2011.

For this calendar year 2011, FSA is going to permit farmers and ranchers in drought-stricken states who have been approved for emergency grazing, which would include those in Colorado, Kansas, New Mexico, Oklahoma, and Texas, to extend the emergency grazing period for an additional month to October 31, 2011, without any additional payment reduction. So it's extending that opportunity for an additional month.

Obviously, producers who are wishing to participate in the emergency grazing must first request permission from their FSA county office by indicating the acreage to be grazed.

Secondly, FSA is going to allow producers nationwide to utilize harvested hay from expiring CRP acres when those acres are being prepared for fall-seeded crops. Now, prior to this modification, all mechanically harvested hay was required to be destroyed.

Now, this change, we believe, enables livestock producers to feed the hay that is mechanically harvested to their own livestock or sell it or to donate it. Consistent with existing policy for managed or emergency haying and grazing of eligible CRP acres, rental payments will be reduced by 25 percent for those utilizing this option.

Now, unlike the extension of the emergency grazing, which is a month period of time in this calendar year 2011, the opportunity to utilize harvested hay from expiring CRP acres is a permanent policy change that will apply not just in 2011 but also in years to come.

So we have been actively monitoring our efforts, both in terms of getting out disaster declarations as quickly as possible, providing resources through crop insurance and through the disaster programs under the 2008 Farm Bill, providing emergency loans for producers who are having a tough time as a result of a disaster, and making sure that those who are stretched have additional time in which to make payments, working with families who may have lost their homes to provide alternative living arrangements, working with folks in 11 states who have been really devastated with additional food assistance, and making sure that we are working in partnership with producers to provide them some additional resources, to the extent we have them available, for debris removal as a result of disaster.

This effort specifically targeted towards some of the drought-stricken areas and the livestock producers of this country, I think as an indication that we are focused on trying to make sure these folks get through what are obviously very difficult and tough times.

Susan: Mr. Secretary, thank you. Let's jump to the calls. We've got Bill Way with Agrinet Moves (phonetic). Bill.

Mr. Way: Yes. Good afternoon, Mr. Secretary.

Secretary Vilsack: Hello, Bill.

Mr. Way: Yes. I have a question. With the economy as it is, do you think that as you have outlined the individual programs, do you think that that could have any further effect on what could be expected for the next year or two?

Secretary Vilsack: Well, Bill, as you no doubt have been following, as we all have, there have been some very important and significant decisions being made in Congress in terms of the overall federal budget, which have not necessarily been reduced to specifics for each individual agency, but obviously have an impact and effect on the resources that are going to be available.

I will tell you that we are taking the attitude at USDA that notwithstanding the challenges, we see this as an opportunity for us to be creative, as an opportunity for us to figure out how we can leverage the resources, however constrained they might be, into more effective use and more effective partnerships with the private and nonprofit sector to try to stretch our resources effectively.

And I think there is no question that we are going to continue to need a strong safety net for America's producers. The fact that we have 913 counties who have been declared either primary or contiguous disaster areas suggests that there will always be a need for the kind of safety net that we just got finished talking about.

Whether it's crop insurance, disaster programs, additional assistance in terms of emergency loans, all of that is going to have to be available, and we are just going to have to figure out how we manage it properly and efficiently.

So while no doubt we will be we will be challenged in these times, we still understand and recognize the need for a strong safety net.

Susan: We continue on the line with Steve Kay with Cattle Buyers Weekly. Steve.

Mr. Steve Kay: Mr. Secretary, I'm sure you are aware that 99 percent of Texas is now under drought, 75 percent is exceptional, and it's the home, as you know, of the nation's largest cattle herd. I'm sure livestock producers, cattle producers in particular, in the state, and in the surrounding states that you mentioned, will be grateful for what you have done so far.

But it appears at this point that the drought is not likely to abate at all over the next several months, and so wholesale liquidation appears likely to continue in the cattle herds. What steps can USDA what are you looking at in regards to measures that you haven't taken so far? Do you have flexibility to offer hay subsidies, for example, or transportation subsidies as producers are forced to move their cattle?

Secretary Vilsack: We actually we don't. I think what Congress' attitude was, that in the past when we were faced with a circumstance similar to what you have outlined in Texas, which has been very, very severe, there have been ad hoc disaster programs that have been developed by virtue of legislation.

There really is not much appetite for doing that in Congress, particularly in light of the passage of the 2008 Farm Bill that established and setup disaster programs that supplement other regular programs. That's why we have been using the livestock indemnity program and the livestock forage program to provide resources.

What we can do and what we will continue to try to do is to make sure that there are that there is a competitive opportunity for those producers who are forced and required to sell, that we continue to maintain a strong market, so the prices they receive are as good as they can be, and that we are standing tough in difficult circumstances. That's why we have been focusing our time and effort on trying to get free trade agreements passed and through Congress.

The reality is we know that particularly in the beef area that that is going to the Korean free trade agreement in particular is going to open up real opportunities for us to expand that market significantly, and I think that's one thing we can do.

Our capacities are a bit constrained because of the Farm bill and because of the financial circumstances that we find ourselves in. But, nevertheless, I think we have worked very hard to try to do what we can within the existing authorities that we have, and the announcements we made today are an example.

Susan: We continue on the line with Alan Berger with Gimberg Moves (phonetic).

Mr. Berger: Thank you, Mr. Secretary. Thanks for having us here today. As you well know, there are a lot of different farm programs of varying levels of complexity that can help different farmers and ranchers depending on their circumstances.

What is the difference in the type of support and programs that are offered if you are a producer of program crops versus a producer of specialty crops? How do you help those two different varieties?

Secretary Vilsack: Well, there are a variety of programs, as you well know, Alan. One of the things that we are attempting to do and have over the course of the last year or two is to figure out ways in which we can expand access to crop insurance to a number of crops. We want to make sure that that option, that risk management tool, is more readily available.

Secondly, as you well know, the SURE program really works for all crops. And if you can't get crop insurance, then you have the NAP program, which is also an opportunity for those who can't get crop insurance to provide some degree and level of protection.

So between SURE, the NAP program, the crop insurance programs, and as well as, you know, some of the regular programs that I don't have to review because you are well aware of them, it is a reflection of the importance of having a safety net.

What we are faced with here in many areas of the country are unprecedentedly severe situations. Whether it's the drought situation in Texas, which has already been alluded to, or the significant number of tornadoes that devastated the south, or the unprecedented amount of flooding that is currently taking place along the Missouri, these are challenging times for those producers who are impacted, which is why it's important to get these declarations done quickly. It's why it's important to have payments made as quickly as possible, to have some forbearance in terms of loans, and why we will continue to look for creative ways to provide some help and assistance as we are with the CRP announcements today.

Susan: Up next on the line Stewart Dade with Agripo (phonetic). Stewart.

Mr. Dade: Yes. Thank you, Mr. Secretary. You raised the subject of the FTAs. We've got Republican leaders in the Congress saying, and particularly in the Senate saying, that they have found the path forward on TAA and which they think will allow for consideration of the FTAs in September. Does the administration agree now that the path now is clear to consideration of these agreements after lawmakers return from their recess?

Secretary Vilsack: Well, that is certainly the hope. We are obviously interested and excited about having these free trade agreements approved as quickly as possible, and I think it's important for folks to work in a bipartisan way to make sure that what we do is holistic and comprehensive, not only opening up opportunities but recognizing that when those opportunities are opened up for some sometimes it closes opportunities for others, which is why the trade adjustment assistance is also very, very important.

So that is a hopeful sign, and hopefully we will be able to work with the Senate and get this through the Congress and get it to the President's desk as quickly as possible, and begin recognizing the $1.9 billion of additional ag opportunity in Korea, and the several hundred million dollars of opportunities that are represented by Colombia and Panama.

You know, the more market opportunities there are, the stronger the prices will be, and the easier it is for folks to get through these tough and difficult times.

Susan: Let's move on to Brent's Bureau where Matt Kay is standing by. Matt.

Mr. Matt Kay: Yes. Mr. Secretary, thanks so much for taking my question. As you are probably aware, S&P has now downgraded Fannie Mae and Freddie Mac, and also we just learned this morning that Farmer Mac has been downgraded one notch as well from AA to A+. What impact do you think this will have on farmer operating and land loans, other loans, and what impact will the broader downgrading of U.S. sovereign debt to AA+ do you think have on the whole Farm Bill process as the budget is squeezed tighter with higher servicing costs for U.S. debt?

Secretary Vilsack: Well, I think it's I think it may be just a bit premature to assume that there is going to be significantly higher service. As you know, a number of the other major rating agencies did not downgrade the U.S., and so I think we have to wait and see precisely what that is going to do.

Our concern right now, obviously, is as Congress reconvenes and there are conversations and discussions about the next step of getting our fiscal house in order, what impact will that have specifically on discretionary spending? And what specific effect, if any, will it have on some of the mandatory programs that USDA has? And how does that basically begin to frame the conversation about the Farm Bill?

We have identified at USDA some very important principles that, regardless of the fiscal constraints, we need to make sure are reflected in the next Farm Bill. At the top of that list is making sure that there is an adequate safety net, that there are adequate risk management tools available to producers, so that when they are confronted with drought or fire or flood or tornado they are in a position to be able to survive that difficult time and come out on the other end still being able to farm.

Secondly, it is important and necessary for us to continue looking for, in this economy generally, but certainly in rural America, the need for gainful employment for folks, which is why we need to use our rural development resources effectively to try to create and promote job growth.

The President will obviously have more to say about that next week when he travels through many of the rural parts of the country as part of our effort with the Rural Council to put the spotlight on a very important place in America.

Let me just say one other thing about the downgrading. One of the things that I think we all of us in America need to do more of is, as my Mom used to say, eliminate the negative and accentuate the positive. And one positive story in this economy continues to be the extraordinary role that agriculture and agricultural producers are playing.

It is often overlooked, but one out of every 12 jobs in this economy is linked in some way, shape, or form, to what producers are being able to do on their land and with their operation. It is a success story. It is something that the United States does better than anybody else in the world. It is something that the rest of the world relies on.

You know, some folks may lend money to operations in the United States, but the United States provides food and substance to people all over the world, both in disaster circumstances and otherwise. It's an extraordinary success story, and I think we often in these difficult times have a tendency to focus so much on the negative and the difficulties, and we sometimes take for granted those who are doing extraordinary work. And I, for one, am not going to do that.

I, for one, believe that we the more we talk about the positive aspects of American agriculture, the more it emphasizes the important role that getting your fiscal house in order, using innovation and creativity and productivity, promotion of exports, is the formula for getting us in a different place in this country economically.

I think we should be giving our producers some credit. I think we should be accentuating that positive story, and maybe if we did a bit more accentuating the positive we could eliminate some of the negative talk.

Susan: We continue with the calls, DTM's Chris Clayton. Chris.

Mr. Clayton: Thank you, Secretary. It was still less than a year ago you announced a temporary disaster package for farmers in southern states. You mentioned the unprecedented nature of this situation. Do you see that you might be establishing some sort of other temporary package coming up? And have you had any calls or requests from Congress to do so?

Secretary Vilsack: Chris, I'm not aware of any specific communication from Congress. It may well be there may be a letter in this office that I'm not aware of, so I'm not aware of that specific request. I know that Congress has expressed, both in terms of appropriations bills recently passed in the House, some real concerns about the utilization of Section 32 and some of the other powers, and a desire to put limitations on our ability to use those resources.

So I take it from that, together with the work that Congress did in the 2008 Farm Bill, that there is not a particular interest in that approach.

Susan: As we get ready to wrap up, we are going to take two more calls. First, Todd McDonough with Prairie Public Radio, and Annalisa Gianini from Farm Journal Media. Todd.

Mr. McDonough: Thank you for taking my call, Secretary. And as you fully know, Undersecretary Hughes is in North Dakota starting today and tomorrow to look at the flooding in (inaudible) acreage. I'm just kind of wondering, what message do you hope he brings to the farmers of North Dakota? And what kind of information are you looking for him to bring back?

Secretary Vilsack: Well, this is an extension of our efforts to make sure that folks know that we are concerned about their circumstance, and that we are appreciative of the challenges that they face. Obviously, Mike will be able to come back with a birds-eye view, a hands-on approach, in terms of specific needs that might be addressed for the folks in North Dakota.

I will tell you that they are obviously confronted with these challenges on a very frequent basis, and I think one of the things we have attempted to do, through the NRCS there was originally a rather significant program of roughly $10 million designed to try to get a better handle on the waterflow in North Dakota to try to avoid flooding that generally occurs.

Now, this is a little unusual circumstance, because they've got a combination of huge snowpack together with a substantial amount of rain in a relatively short period of time, which has complicated things.

But I would imagine that Mike will come back with a set of recommendations in terms of what we can continue to do through NRCS and others to better manage the water up there.

Susan: And our last call comes from Annalisa Gianini, and she is with Farm Journal Media. Annalisa.

Ms. Gianini: Thank you, Mr. Secretary. Chris alluded to the fact that there might be a little bit of a disagreement in the mood in Washington. I was wondering if you think that the current commodity prices are kind of blinding Congress to the real issues that are facing producers in terms of this crazy weather and the disaster relief needed. And, if so, what can we do to help you change that?

Secretary Vilsack: I don't think it I don't think they are necessarily blinding Congress at all. I think that Congress recognizes, and particularly those who are on the ag committees, recognize that commodity prices, if you look at the last 60 years, I'm told that in only 10 of those 60 years have we seen real commodity price increases in terms of in real terms, in real income terms.

If that's correct, you know, that has obviously put a lot of strain and stress on a number of operations, and really compelled many to take a look at how they might increase productivity.

I will tell you the one thing that I think Congress has to keep their eye on, as they look at ways in trying to get our fiscal house in order, the President has been very clear about the importance of research. And I would say that that is a critically important thing for us to keep an eye on here at USDA and in the Congress.

There is no question that we have seen huge productivity gains in most of agriculture, in part because of what producers are doing on the ground, but also in part because of what research is telling them what to do on the ground.

And to the extent that research ag research and productivity gets flatlined or gets reduced, there could be a corresponding limitation or reduction in terms of the rate of productivity. And as everybody knows, we are faced with not a stagnant circumstance in terms of food production globally.

It is going to be important and necessary for the United States to continue to lead the way, to increase productivity, and doing it in a sustainable method and way, so that we are in a position to continue to meet the world's needs.

Again, this is a success story. I think it is important and necessary for the spotlight to be put on it, particularly at a time when every time you turn on the every time you turn on the television, pick up a newspaper, go on the internet, or listen to the radio, you are essentially getting a barrage of negative news.

We are talking ourselves into a much deeper funk as a result, and it seems to me that what is happening on the farms and ranches of the United States is a positive, good news story, which, if we emphasize the lessons to be learned from what producers have done, I think we will see the formula for the rest of the economy.

Clearly, less debt, but also adoption/adaptation of innovation, which leads to greater productivity, which allows you to export, which creates wealth, and, in turn, allows folks to be employed as a result.

I think it's a good news story. I am certainly proud of what American farmers and ranchers are doing, and I think they deserve a lot of credit. And hopefully with the President's upcoming tour, they will have the spotlight put on them for a little bit.

Susan: Agriculture Secretary Tom Vilsack, thank you. Thank you for those who are on the line. That concludes this afternoon's media briefing.


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