SPECIAL REPORT | Stabenow: Senate will proceed on its own schedule to write, finish farm bill

SPECIAL REPORT

AN INTERVIEW WITH SENATOR DEBBIE STABENOW
Chairman of the Senate Agriculture Committee

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By JERRY HAGSTROM

Senate Agriculture Commitee Chairman Debbie Stabenow, D-Mich., says the Senate will proceed on its own schedule on the farm bill and should finish the bill as quickly as possible, but she will not promise to finish the bill in 2012.

In her first extensive interview since assuming the chairmanship of the committee, Stabenow told The Hagstrom Report, “We’re going to start right now and move through the process, and we’ll make decisions as we go along. In terms of an exact timetable, I think it’s in the interest of agriculture, given the backdrop that we’re in right now around budgets and deficits, to move in a thoughtful, methodical way and get this in place as soon as we can.”

She added, “We will move this as responsibly and quickly as we can and work with our counterparts in the House. I think [House Agriculture Committee] Chairman [Frank] Lucas [R-Okla.] has a lot on his plate as well. As long as we are doing the right thing for agriculture, then that’s what counts.”

Stabenow announced Friday that the first farm bill field hearing will be held April 9 at Michigan State University in East Lansing.

Lucas has said the bill should be finished in 2012, but has also said he intends to use 2011 to hold oversight hearings on federal agencies and to educate the many freshmen member of his committee about agriculture.

In the interview, Stabenow discussed her relationship with agriculture since she was a child and said the farm bill should:

• Reexamine the direct payments program to establish the committee’s credibility in a tight budget period.
• Expand crop insurance to cover more crops.
• Continue the sugar program.
• Use the National Milk Producers Federation’s “Foundation for the Future “ proposal as the starting point for changing the dairy program
• Continue the specialty crops program from the 2008 farm bill.

Stabenow also said it is necessary to educate members of Congress that agriculture has already contributed $4 billion to deficit reduction through the renegotiation of the crop insurance standard reinsurance agreement. She reaffirmed her commitment to ethanol, but said support for renewable fuels may need to be changed. She also said the Commodity Future Trading Commission should take its time to develop policies that assure accountability, transparency and the ability of end users to manage risk.

Following are edited excerpts from the March 18 interview:

HAGSTROM: When did you get interested in agriculture?

STABENOW: I grew up in a small town. It’s called Clare, Michigan, [the] “Gateway to the North.” I was actually born in a little town, Gladwin, north of that, but came to Clare when I was 2 years old.

My relatives were in agriculture — cash crops, dairy. I was a town kid but did 4-H, so I’ve been involved in agriculture since I was young — small animals in 4-H as well as the things that the kids in town did — photography, cooking, sewing and debate, which came in handy.

I grew up in rural Michigan [with a] rural quality of life. It was the most wonderful time for me. My grandfather had horses. We’d spend our summer outside of town riding horses around my uncle’s farm. Agriculture has been part of my way of life.

I went to Michigan State University, a land-grant university [with a] premier research facility. When I was getting my master’s degree, I worked for Cooperative Extension.

My job was to create an urban 4-H program in Lansing. Literally myself and another young woman were dropped off in this area of townhouses and told that by the end of the summer, they wanted a 4-H program.

We went door-to-door asking the adults what skills they had and what they were willing to share with young people. By the end of the summer, we had several hundred young people in a program sharing everything from cooking to auto mechanics. It was the beginning of what is now an established 4-H program.

I went from there to running for the county board of commissioners, chairing the county board.

HAGSTROM: Was that in Lansing?

STABENOW: It’s Ingham County. Lansing is the city, but it is a very large rural area.

I oversaw the county and worked with the Soil Conservation District and with the Farm Bureau and the commodity growers. [I] sat on the drainage board and did rural mapping for our conservation district. So I’ve been involved starting there with ag policy and then went from there to the House of Representatives in the state, where I was on the Agriculture Committee, and chaired a Subcommittee on Food Processing.

I offered the Michigan Family Farm Development Act to focus more on what we could do to support our family farms. [I] continued when I was in state Senate to work on food processing again as part of the Economic Development Committee, and then went to the U.S. House in 1997 on the [Agriculture] committee. I helped write a farm bill there. I’ve been involved in writing two farm bills with the Senate.

Rural America is really my heritage, my family heritage, rural Michigan. I’ve been involved in ag policy ever since I chaired the county board of commissioners.

HAGSTROM: Even though autos are so dominant in much of the state. Everybody thinks of you as the senator from the auto state.

STABENOW: Exactly. In Michigan, we make things and grow things and add value. You would not have a middle class in this country, you would not have an economy in this country if you didn’t make things and grow things and add value.

That’s what my focus has been in terms of jobs. I’m very proud to have helped lead the efforts that have allowed the automobile industry to turn around, not just the help through the bankruptcy and restructuring but retooling loans and “Cash for Clunkers” and the advanced manufacturing tax credit. I’m very proud of that, but I’m also very proud to have led the efforts in Michigan around agriculture,to be the first person [from the state] on the Senate Ag Committee in over 50 years and the only person to chair the committee since the 1880s. Agriculture is one of four jobs for us.

This is jobs for us. This is jobs, and it’s about our way of life in Michigan.

HAGSTROM: Since agriculture is doing relatively well compared to the rest of the economy, when you’re in rural Michigan these days, is it doing relatively better than the cities? How do you find the economic situation in rural Michigan now?

STABENOW: We still have many challenges. Michigan has been hit harder, deeper, longer than any other state.

Commodity prices are up. That’s good. Costs also up, not good.

We have many rural communities that see an intersection between agriculture and manufacturing. A lot of small towns have small tool-and-die shops that have closed up because of what’s happening to manufacturing. That affects our community. Many people are challenged with revenue losses from our cities and towns and townships. I think rural America has been hit just as hard, if not harder, by the recession in terms of housing valuations and health care costs and jobs.

I am very proud of where we are on agriculture and what’s happened to prices. We have a surplus in trade. It’s the only part of our exports where we have a surplus. I sit on the President’s Export Council, and agriculture is our shining star on exports.

But rural Michigan has been impacted every bit as much as our cities, if not more, in terms of the general economic situation, and families have seen their houses and their farms go underwater in value and their costs go up, so we have to be mindful.

HAGSTROM: That situation must influence how you feel about the farm bill and what it should do. What’s your general approach going to be about the upcoming farm bill? What are your priorities?

STABENOW: Given the challenges in the budget, which are huge, let me just start by saying that agriculture has already given. We have contributed $4 billion to the deficit [through the renegotiation of the crop reinsurance agreement]. In this CR [the continuing resolution funding the government through April 8], 30 percent of the cut came from agricultural, from rural development, research, conservation efforts. When we talk about earmarks [which were eliminated], that’s the way we fund incredibly important research efforts, pest control and other areas in agriculture.

I have talked to our leader [Senate Majority Leader Harry Reid, D-Nev.] about that. I’ve talked to the White House about that. I’ve showed them the numbers and said we are willing to do our part in agriculture, but others should be contributing as well. I think it’s time for others to be stepping up.

A lot of people don’t understand that in the commodity title as prices go up, we actually lose baseline, which we are doing. We are losing baseline.

So we start down. Plus, we have $10 billion that was in the last farm bill of authorized spending that is not in the baseline. I sit on the Finance Committee. And we funded SURE [the farm disaster relief program]. Our disaster assistance, all of our energy programs, some on specialty crops was funded through the $10 billion, [and] we will have to find a way to fund if we want to continue it.

People have said to me I drew the short straw, that this is going to be the toughest farm bill to write since the first one. Lucky us. I’m very mindful of the position [from which] we started.

That means a couple of things. For those of us who are absolutely committed to having the very best farm bill possible, it means we have to work together. I told all of our leaders in agriculture, we’ve got to start from the basis of not defending individual programs, but what are our principles, what are our goals, how do we make sure we have the best safety net possible for production of agriculture, how do we make sure that we are providing the best tools to manage risk?

Let’s face it. We are in good times now, but agriculture is an incredibly risky business. Our job is to remind our colleagues in the House and the Senate of that and the importance to our national security of producing our food and fiber products here in America and the important role of agriculture internationally, when we’ve got 7 billion mouths to feed around the world. American agriculture, its new technology, is going to do that.

I start from there. We know there are changes that have to be made. We have to be credible, frankly, in going forward. When we talk about the safety net, in order to be credible, we’re going to have to work together to make changes, but it should be the Agriculture Committee doing that, not people who don’t understand agriculture.

Groups are coming to me now with a great sense of urgency about getting started on the farm bill process, so that we can basically be managing that process, rather than those who don’t understand agriculture. I think that’s important to do as well. But we want to do the very best job to make sure that moving forward, our production agriculture has the tools that they need to be successful.

HAGSTROM: House Agriculture Committee Chairman Frank Lucas [R-Okla.] has said that he’s going to spend this year doing oversight in educating his many freshman members, and that he’s really not going to start on the farm bill until next year. In the last several cycles, the House has seemed to go first. Are you planning to wait for the House, or are you going to proceed on your own? What sort of schedule do you see yourself on?

STABENOW: Chairman Lucas and I — we’re talking regularly. We [in the Senate] will move ahead on our own process. I don’t know if that ultimately means we go first in marking up the farm bill. We’ll have to see, but we’re going to begin our process. I’m in a fortunate situation not only having an extremely experienced ranking member — Pat Roberts and I work together extremely well and we’re doing this as a partnership — but [also] many former chairmen and experienced people. Both Democrat and Republican. So we’re in a very different position from the House.

We have two new members who we welcome [Republicans John Boozman of Arkansas and John Hoeven of North Dakota], both having experience in agriculture themselves, and we have wonderful experience from our former chairmen. I think we are in a position to provide a valuable contribution in beginning this process and working with all the farm groups to lay out where we want to go, what our challenges are, and also to send a very important message again to the White House, to colleagues, that we [who are] working with production agriculture want to be making the decisions that needs to happen on farm bills.

In addition to focusing on our farm safety net and on risk [management], there are things that we can do to create efficiencies. That’s part of what we need to do to be credible in this time when every dollar is so tight, and we’ve got to make sure we’re getting value out of every single penny.

On reviewing the GAO recommendations and what they’ve looked at in terms of duplication, [there are] ways that we can be more efficient, but we can consolidate programs, create less paper work for folks that do the job. I talked to [Agriculture] Secretary [Tom Vilsack] about that, and I know he’s very anxious as well to look in that area, so I think we have important things we can do to really streamline the way things are done and still meet the goals. That’s going to be a very important part of our process as well.

HAGSTROM: Would that include relying on the experience of Jonathan Coppess [the former Farm Service Agency administrator Stabenow recently named general counsel of the Senate Agriculture Committee]?

STABENOW: If we had to, yes. I put together a great team. Chris [Adamo, the Senate Agriculture Committee staff director] is doing a great job, and Jonathan is a very important part of that. We’re stealing as many great people from USDA as possible. The secretary has told me to stop. He said, “I gave at the office. Go look somewhere else.”

Seriously, I have looked broadly to bring in the very best expertise. This is going to be a challenging time to do a farm bill. We need the people with the most experience who can really help us weave our way through it.

We’re going to partner with others as well. Sen. [Kent] Conrad [D-N.D.] and I are on three committees together -- Finance, Budget, and Ag. We worked extremely closely last time on the farm bill. I’m pleased to see that he’s brought [former Undersecretary for Farm and Foreign Agricultural Services] Jim Miller over. We’ll also be partnering with Jim and Sen. Conrad as we work through the budget issues.

We look broadly at who the allies are and [where] expertise is, so that we can really do what we need to do, because we’ve got tough decision to make. Again, I want to make sure when we’re done what we have works for agriculture. [There is] a lot of misinformation about what goes out in terms of farm subsidies and farm payments, so we’ve got some educating to do with colleagues as well. But we also have to be willing to step up and make some changes if we’re going to be credible.

HAGSTROM: What is the future of direct payments?

STABENOW: To look credible, we’ve got to take a look at [if] there are changes that should be made, at the same time focusing on making sure that we have a strong safety net and efforts to manage risk. I don’t know what that means, what that looks like, but I think everybody knows we’ve got to take an honest look at what we’re doing and whether or not we can do it more effectively.

HAGSTROM: The crop insurance program is very popular and seems to be very successful, but as the prices are going up, the cost of it is going up. Do you foresee possible changes in the crop insurance in this bill?

STABENOW: Crop insurance is popular, but we need to make sure that it covers as many crops as possible. They started a new pilot on rice, and there are specialty crops that aren’t covered yet. We’re still developing those. Crop insurance is a very important tool for managing risk, but I really want to see it expanded, so that farmers have more comfort and feel a sense of confidence that it’s going to work for them.

HAGSTROM: The sugar program. Are you happy with the current one? Do you think it will stay the same?

STABENOW: Michigan is one of the top four sugar states. I think the sugar program works. We put in the 2008 farm bill that it would have to operate at no cost. If they’re interested in making changes, we’ll listen certainly to the folks involved with sugar, but I think this has been a program that’s worked.

HAGSTROM: The dairy farmers have had some of the toughest times. The National Milk Producers Federation has a Foundation for the Future Program. The dairy processors have some problems with it. Some of the smaller dairy farmers, like the National Farmers Union members, have problems with it. Have you had any reaction to the National Milk proposal or any other possible changes in the dairy program?

STABENOW: First of all, we can’t have a situation like 2009. It was devastating for our milk producers, and dairy is the number-one commodity from Michigan, so I work very closely with Michigan milk producers.

I understand the concerns of the dairy processors. I’ve asked them to work together to work out the differences. I think if we’re going to be successful in moving something, we’ve got to find a middle ground, but I think the National Milk proposal is a very important framework to start with. I know there are concerns about issues relating the supply components of it, but I am very, very hopeful that we can find a way to get agreement so this works for everyone.

HAGSTROM: You are most known for your work on the specialty crops title. Other farmers would say specialty crops got more than they ever had in the last farm bill.

STABENOW: That’s because they got zero. When you’re starting from a base of zero, there’s no place but up.

HAGSTROM: Is there anything specifically you want to try to do more in the next farm bill?

STABENOW: Let me back up and say that we have more diversity of crops in Michigan than any place else, other than California. In every single one of the three farm bills I’ve been involved with, I’ve had to pay attention to every page, unlike my colleagues who only have cotton and rice or peanuts. I’m not putting them down. I’m just saying I have not had the luxury of only focusing on one or two titles because conservation is very important to us, energy is very important to us. Every part of the farm bill impacts Michigan in a huge way, so I’ve been deeply involved in every part of the farm bill.

And my friends, Sen. Conrad, Sen. [Tom] Harkin [D-Iowa], Sen. [Saxby] Chambliss [R-Ga.], will tell you that I was deeply involved in the coalition that actually created the successful farm bill last time, and I was very proud for the first time to be able to add what is in relative terms a small but very important part of the farm bill called the “Specialty Crop Section” — $3 billion that for the first time recognized the importance of what is about 50 percent of the cash receipts in agriculture for the country.

The folks in specialty crops have not asked for direct payments, but having the research, the help with pests, the marketing [do] help, [along with] the [state] block grant which gives flexibility so that the almond growers in California can focus on what they need versus the grape growers or cherry growers or blueberry folks in Michigan.

Those are very important, and I’m committed to keeping those elements in the farm bill and certainly listening to growers about anything they believe should be changed or added, again, in the context of a very tight budget. I think we are going to have to look at the entire farm bill in the context of a shrinking baseline and a very tough budget situation, but I’m obviously committed to make sure that specialty crops remain in the farm bill.

HAGSTROM: Ethanol. It has its big supporters and its critics. Where do you see ethanol fitting in?

STABENOW: I have been a big supporter of ethanol. We’ve seen the industry mature, and I think now we need to listen to what should come next, again, in the context of budget and deficits, in the context of what’s needed today. A lot of the leaders around ethanol are asking us to look at infrastructure, making sure that the pumps are there, making sure that the pipes are there, the ability to move ethanol and asking us to change what we are doing rather than looking at the ethanol [tax] credit. I think we need to explore.

HAGSTROM: What about the complaints from the animal producers that the cost of feed has gone up? How do you address that?

STABENOW: I appreciate and understand that. I think we’ve got to explore that. Certainly, we understand, and I think as the ethanol production has gotten more sophisticated, that means they’re addressing that in a number of ways.

I’m certainly sensitive to input cost, but I think this is a very important part of our alternative fuel opportunities, and so it’s a balance. It’s really a balance. When we look at what’s happening around the world and our dependence on foreign oil and the fact that, frankly, if you took imports of oil out of our balance of payments, we would not have a deficit right now.

So I think agriculture, not just ethanol, but biodiesel, other advanced biofuels are an important part of our country’s solution to having American-made energy.

HAGSTROM: On the Dodd-Frank bill and the changes to what the Commodity Futures Trading Commission is making, what is your view on how they’re proceeding and whether these changes will be good or cause problems for agriculture?

STABENOW: It was very important that we put in place the accountability and the transparency that’s needed to make sure that what happened on Wall Street does not happen again. We lost 8 million jobs in that process, and it’s very important that we implement this new transparency and accountability.

It’s also important that our end users, whether it’s agriculture or whether it’s manufacturers, have the capacity to manage their own risk and who’s hedging. I authored the narrow end-user provision that is in the statute to make sure that agriculture and other businesses have the capacity to use the system and will be able to manage their own risk. We’ll continue to do oversight on CFTC to make sure that they fully recognize legislative intent there.

We have held one hearing, and I think it was important both to hear what the CFTC is doing and to recognize we have given them a huge task with a very tight timeline. Part of our hearing was to let them know that we understand they’re in a tight timeline and that we want them to focus on systemic risk and to take the time that is necessary to do this right.

From my perspective, it’s not about being quick. It’s about being right, and at the same time, particularly when we look at where we are right now in gas prices and so on, we want them to be able to move ahead and use the tools that we’ve given them to be able to analyze what’s happening in the marketplace in terms of excessive speculation and manipulation.

My message, and I think the message of the committee, is we want you to live within legislative intent, not to overreach, but to full use the tools that we’ve given you.

HAGSTROM: And you’re up for re-election in 2012.

STABENOW: Really? I keep forgetting.

HAGSTROM: Are you going to have time to both write the farm bill and run for re-election?

STABENOW: Yes, yes. In taking this job, I wouldn’t have taken it if I didn’t believe I could do that. I am fortunate to have the opportunity to represent the people of Michigan for a number of years and to be able to do my job as well as focus on that. I’m confident I can do it.

HAGSTROM: Are you planning to finish the bill in 2012?

STABENOW: We’re going to start right now and move through the process, and we’ll make decisions as we go along. In terms of an exact timetable, I think it’s in the interest of agriculture, given the backdrop that we’re in right now around budgets and deficits, to move in a thoughtful, methodical way and get this in place as soon as we can. I don’t know what that means because we have a lot of variables, but I’m certainly hearing from those in production agriculture that they think it’s important to start the process.

HAGSTROM: If you don’t finish it in 2012, won’t people say you didn’t get the job done?

STABENOW: We will move this as responsibly and quickly as we can and work with our counterparts in the House. I think Chairman Lucas has a lot on his plate as well. As long as we are doing the right thing for agriculture, that’s what counts.