TRANSCRIPT OF AGRICULTURE SECRETARY MIKE JOHANNS REMARKS TO THE NATIONAL ASSOCIATION OF RESOURCE CONSERVATION AND DEVELOPMENT COUNCILS ANNUAL LEADERSHIP FORUM
It is great to be here. Mention was made that I grew up on a dairy farm in North Central Iowa. I would guess we have some folks from Iowa here today. Is that possible? No one is claiming that.
I grew up near a little community called Osage, Iowa, and grew up in a family of four children. And we had a dairy farm. And I always say to people that my father really had it down pretty well as to how to build character in his sons. He would give us a pitchfork and send us out to the cow barn or the chicken house or whatever, and we would stand knee-deep in you know what and pitch away. Now my father thought he was building character in his sons, but what he was really doing was preparing his youngest son for his life in politics.
[Laughter and applause.]
Well, it is great to be here. I appreciate the very warm welcome. I can tell stories all day, but you didn't come to hear me tell stories. I do appreciate the opportunity to talk about our Farm Bill proposals with maybe other topics you said are so important to your work in communities across this great nation. Let me just tell you, I believe that what you do has positioned you for a very exciting piece of our Farm Bill.
I couldn't be more excited about the future of agriculture, ladies and gentlemen. I've been involved in agriculture dating back as long as I can remember. My first memories are on that farm in North Central Iowa that I love to joke about, but I also acknowledge that those 18 years on that farm really taught me all I needed to know about life.
Agriculture is changing dramatically. You know, if you think about it our farm was very, very typical farm-- 30 cows. We would typically farrow about a dozen sows at a time. We'd buy bottle calves and then teach them how to drink out of the bucket. Many of you have that technique down. Once you learn that, you never forget it. And then eventually on to feed, and we would feed those animals out. I can even remember the day when my mother had 500 chickens. And that was a pretty normal family farm back then.
But agriculture has changed dramatically just since the last Farm Bill was passed, if you think about it. The growing demand for energy is now creating a new market along with new models on how we serve that market. And our fundamental farm economy is strong as well. We expect both exports and farm cash receipts to set yet again new records.
That's why we believe that it's the right time to think about farm policy reform to make it more market-oriented and to put U.S. producers on a strong, competitive footing-- not only for today, not only for the life of the next Farm Bill, but for years to come.
As you know, we recently came out with our own set of proposals for the new Farm Bill. They are the product of two years of listening and dialogue, most notably the 52 Farm Bill Forums we conducted across the United States over the last two years and the analysis of many.
I think one of the most exciting things about our proposals is the dramatic expansion in funding that we are proposing for our conservation programs. In the 2002 Farm Bill conservation spending was increased by 80 percent. We want to add another $7.8 billion to what we spend on these programs so we can just continue to do a good job of protecting our natural resources while benefiting farmers, the environment, and the public at large.
We're also putting a greater focus on emerging priorities like the growing demand for renewable energy and the opportunities this offers America's farmers in our rural communities. All of this sets the stage for the kind of innovation that is going to be necessary as we think about the next decade or two or three.
The way I see it, we are in a strong position. But there's much to be done. Now you have spent years developing the public/private partnerships that have done such an effective job of serving our rural communities. This expertise is enormously important, and it will be critical as the Farm Bill develops.
The RC&D program represents cooperative conservation, in practical, on-the-ground terms, working with USDA partners, experts, and nonprofit RC&D councils to help deliver services in niche areas, maybe where no other services are available. Cooperative conservation is one of the outstanding strengths of what you do. In fact, six of the 30 projects highlighted at the President's Conference on Cooperative Conservation just a couple of years ago, right after I came to this job, involved RC&Ds.
I believe that the best solutions come from the local level. I said during my confirmation hearing that I wanted to be the kind of Secretary that got outside the Beltway to listen to people, and that's exactly what we've done. The core of the RC&D concept, in a word, is the power of grassroots. And we appreciate all you do for your local economies and resources.
Now, I can hear you thinking. Well, maybe I can't quite hear you but --
But I think I can read your mind a little bit. You're probably saying to yourself, Well, Mike, if you're giving us a pat on the back for doing a great job and we have new areas to explore with the Farm Bill proposals, how can this be done in the current budget climate?
Ladies and gentlemen, I intend to speak always straight to people, and I won't sidestep this very difficult issue. I know it's been tough for you. The President's budget proposes $14.7 million for RC&D in fiscal year 2008. This cuts funding by $36 million and reduces the number of USDA coordinator positions from 375 to about 50. Because we want to maintain the current 375 RC&D areas nationwide, the goal is to consolidate, to streamline, and to hand more responsibility to the states and to the RC&D councils.
As you know, every dollar in the budget is these days very highly scrutinized. The budget sets priorities, and a top priority must be to keep spending very, very lean and effective. Under OMB's PART review, and that's an acronym for Program Assessment Rating Tool, the RC&D program was found to duplicate other things at the USDA and other federal programs.
But the immediate future I would still maintain is full of opportunity if we can move ahead. The question as I see it is this. If NRCS funding is increasingly tied to conservation accomplishments, what can we do to modify the way that we are operating?
We're on the same page here; we're looking for opportunities to increase effectiveness. We're looking for ways to reduce cost. We're working to help farmers and ranchers across this nation, improve working agricultural lands, while providing environmental benefits to the public, from clean air and water to the wildlife habitat that so many of us enjoy.
To be successful and to make the RC&D program the best possible investment for the American taxpayer, it must evolve during this time of change and challenge like we are asking so many of our programs to evolve.
Let me tell you about one area that I believe holds tremendous potential in an area that would use the expertise and partnerships that you bring to the table. The way I see it is, there's great opportunity here in the market-based approach to conservation. Ladies and gentlemen, there's an entire market emerging in ecosystems, goods and services. Right now many conservation and environmental benefits produced on U.S. farms and private forestland don't have an assigned value in the marketplace. And yet they are enormously valuable.
Some lands are private market altogether. So producers have little financial incentive to provide those services for the public good. We plan to invest $50 million over the next 10 years to encourage new private sector environmental markets. They would supplement current conservation and forestry programs, not replace them but supplement them.
A key point is that we must ensure the environmental goods and services produced by agriculture and forests can be used as offsets in regulatory, voluntary partnerships and incentive programs.
For example, a business that's a point source of water pollution might very well be a farmer who established buffer strips to reduce the nutrient runoff. But the benefits don't end there. These buffer strips may also rehabilitate wetlands, sequester carbon and provide wildlife habitat. As this market grows, no doubt about it, there will be a need for a middleman to act between the company and the farmer.
But this won't be simple, ladies and gentlemen. To make environmental credit trading a reality, we'll need to aggregate credits from farmers to sellers and to buyers. We'll need to confirm that environmental credits are valid. That means verifying that conservation practices have been established and maintained. Again, somebody is going to have to do that work.
These are goals that will move the market-based approach to conservation off the drawing board and on to our lands and forests. The RC&Ds I believe are well-positioned to be this middleman.
And before we even get to that point, we need you to translate ecosystem service markets for land owners. This is an arcane if not complex language of its own. Landowners must understand how they can be a part of these new markets. Communities will need to hear from local groups that they know and trust. Agriculture can make a positive contribution to local air quality and the nation's efforts to sequester carbon. We want to see it happen. It can happen, it should happen.
We'll measure success by the tons of carbon sequestered. Several RC&D councils have experimented with carbon sequestration trade. You have experience, and we'll look to you for continued leadership in this area.
Let me if I might talk about some other additional Farm Bill proposals. You also have a wealth of experience in handling water quality and quantity projects on a regional scale. I urge you to continue to apply for Conservation Innovation Grants. In the last three years, nine RC&Ds received close to $3 million to implement projects. In the 2006 competition, we awarded grants to three RC&Ds to work on cutting edge conservation technology. Under our Farm Bill proposals, we would invest more resources in Conservation Innovation Grants as part of a new, streamlined EQIP, Environmental Quality Incentives Program.
By funding the program at $100 million instead of the current $20 million, we'll stimulate innovative practices and creativity from the Chesapeake Bay to the San Joaquin Valley.
Folks have told us that they have a hard time navigating our overlap in the cost-share programs. We've heard it in our Farm Bill Forums. So we want to consolidate the programs into a newly designed expanded EQIP. This would include a new regional water enhancement program. These important changes will mean an increased investment if our proposals are adopted on the Hill of $4.2 billion over the next decade.
We also plan to set aside 10 percent of all Farm Bill conservation spending to address the needs of beginning and socially disadvantaged farmers. It's a big financial commitment, but it's a very sensible investment. The more farmers and ranchers we can bring into the program, the bigger the environmental benefits are going to be. We'll need your help in reaching out to these folks and bringing each and every interested farmer into the system.
And there's one additional conservation proposal that needs your attention. We'll look for your help with our new Emergency Landscape Restoration Program. This consolidated program will be a one-stop source for landowners who have suffered a catastrophe and are trying to recover from that.
But we can't talk about conservation without also talking about another subject. That subject is economic development. No one knows better than you that we must work together to produce a viable business and strong community model. Our state Rural Development directors are already at the table with you. I urge you to coordinate as closely as possible with them to give taxpayers the best return on investment.
I want to mention something I'm very proud of. As we traveled the country in our Farm Bill Forums and our listening sessions in '05, we didn't hear a single negative comment about our Rural Development programs. Why is that? Because people are seeing the proof of the investment in their rural communities. The jobs created, the infrastructure built and improved, the energy projects that are actually up and running. Since President Bush took office in '01, USDA Rural Development has invested over $76 billion and created or saved 1.5 billion jobs in our most rural communities.
Rural America covers three-quarters of the land in this nation. Its home to 65 million people. It includes some of our fastest-growing communities in America as well as areas that quite honestly have been bypassed if not downright left behind.
I think one of the most exciting things in our Farm Bill proposals is our plan to complete the rehabilitation of all certified rural critical access hospitals with $1.6 billion in loans. That's more than 1,200 hospitals that our citizens desperately need.
We would also commit an additional $500 million to another basic need, attacking the backlog of applications for rural infrastructure loans and grants. These would include water, wastewater disposal projects, emergency water assistance, community facilities, distance learning, telemedicine, the kinds of investments that really do hit very close to home.
As in our conservation goals and work, we will need the partnership of everybody involved. This administration is making a big investment in opportunity for rural America, and by that I mean the newest cash crop, the promise in potential of renewable energy.
I happen to believe that bioenergy from agriculture offers the rural economy maybe the biggest new market in history. Our Farm Bill proposal calls for $1.6 billion in new funding over the next decade to speed the development and the production of renewable fuels. We plan to spend $500 million to create a bioenergy and bioproducts research program, and $500 million more for rural alternative energy and energy efficiency grants. These would go directly to farmers and to ranchers and to small businesses.
We're also proposing a new $150 million wood-to-energy program to develop new technologies that use low value woody biomass to produce energy. And we will provide funding to support $2.1 billion in loan guarantee programs to fund cellulosic ethanol projects.
Again, partnership will make this happen. Some are already working on converting switch grass into electric power. Others are working on converting livestock manure and other waste to energy, or wood-to-energy or other biofuels projects.
We believe that agriculture is once again at a crossroads. We believe that with technology and investment that the proposals that we have made for the next Farm Bill, there's an opportunity to unlock the future that maybe we could have only dreamed about just a few years ago.
We thank you for your efforts. We look forward to working with you. Thank you very much.