MODERATOR: Good afternoon from Washington. I'm Larry Quinn speaking to you from the Broadcast Center at the U.S. Department of Agriculture. Welcome to today's news conference with Secretary of Agriculture Ed Schafer to discuss implementation of the 2008 farm bill. Joining the Secretary in the studio are Chuck Conner, deputy secretary of Agriculture; and Floyd Gaibler, deputy undersecretary of Agriculture for Farm and Foreign Agricultural Services.
Reporters, a reminder before we begin, if you wish to ask a question, please let us know that by pressing *1 on your telephone touchpad.
Now it's my pleasure to introduce Secretary of Agriculture Ed Schafer.
SEC. ED SCHAFER: Thank you, Larry, and thank all of you for joining us today. We are glad to be here with you, and as Larry mentioned we have the team here ready to answer any questions you might have about implementation.
I think just about everyone involved in this year's farm bill would agree that the process of getting it into law took a lot longer than anyone expected, but we pledged that once we had a new law in hand we would move as quickly as possible to implement the changes in farm programs that the new law required. And that's exactly what we've done.
It took until May 22nd for Congress to first pass the farm bill. Then they realized they needed to pass it again; they voted for it -- and then they voted for it again to include the trade title. And that wasn't complete until June 18th.
But once it was clear what the outcome would be, we moved ahead, and on June 12th we announced all of our 2008 marketing loan rates.
We wanted to make that program available as quickly as possible to producers who may want to use it this year. Today we're announcing that sign-up for the '08 direct and countercyclical payment program is now open. When producers sign up for the DCP they will immediately be eligible for a 22 percent advance on their direct payment.
We expect these advanced payments will amount to $1 billion over the next few months. And checks will start going out in early July to those who sign up right away for the program.
Overall, we expect 1.5 million producers to participate in this program, and because of the delayed passage of this year's farm bill, the late fee that normally applies to sign-ups after June 1st will not be charged this year.
The rules for the 2008 DCP program are very similar to those for 2007. That allowed us to move quickly in developing software to process this year's contracts. The '08 farm bill did however make one immediate change to the DCP by ending payments to farms with less than 10 base acres, unless they are owned by a socially disadvantaged or limited resource farmer or rancher. And we've built that change into the program.
In two important ways, however, this year's program will be the same as last year's. Producers won't need to file new farm operating plans unless they have had changes in operations that would affect their eligibility.
And adjusted gross income compliance certification of record will carry forward this year. The adjusted gross income limit remains at $2.5 million for this year; however, starting in '09 producers won't be eligible for the program if their non-farm income exceeds $500,000 or their farm income is over $750,000. And as always, if our farmers and ranchers are married, we would double those figures.
Other program changes will also be taking effect with the '09 crop year and beyond. Those will require us to issue new rules and handbooks and develop new software. We'll announce those changes as soon as they are ready and as they come to be implemented.
I am pleased that we are off to a fast start here, and we are going to work hard to keep the pace in the months ahead. Chuck and Floyd and I will be glad to answer any questions now that you might have.
MODERATOR: And Reporters, we remind you if you'd like to ask a question, please press *1 on your telephone touchpad to indicate that you do have a question. And our first question comes today from Luke Engan from Inside U.S. Trade. Go ahead, Luke.
REPORTER: I had a question about country of origin labeling provision in the farm bill. When do you expect to go public with that rule in draft form? And are you still on track for September 30 implementation? Also, will there be a six month grace period like there was with the shellfish portion?
SEC. SCHAFER: We are on track to see this legislation complete by October 1st, and when it actually gets published I don't know. But we have some expediting authority here, and we are likely to go to a final rule. And the grace period, yes, we are looking at a similar implementation rate as we did with the shellfish. And so as this goes into effect we're going to be working with the retailers out there to look at this labeling.
REPORTER: A quick follow-up. Does that mean you're not doing a proposed rule? And will you make your draft text public at all before October 1st?
SEC. SCHAFER: We're going to do a proposed final rule - I think the legal terminology is, interim final rule.
MODERATOR: Our next question comes from Dan Looker of Successful Farming. He'll be followed by Bill Tomson. Dan, go ahead, please.
REPORTER: Thank you. Good afternoon, Secretary Schafer. Thank you for holding this press conference. As I understand it, you're under a lot of pressure to make some more changes in the Conservation Reserve Program. I believe Senator Grassley met with you yesterday asking for early release of about 24 million acres for cropping purposes. And I believe Senator Harkin has discussed moving up the time when CRP land could be used for forage, as soon as possible rather than in August when the nesting season would be over. And I just wondered if you had made any decisions on any changes in the CRP acreage.
SEC. SCHAFER: The first decision we made was in the flood areas in the Midwest to be able to move cattle to CRP land immediately, and we're pursuing that in the flood states, during the floods, and now after the floods during the clean-up period. So we're moving there in the affected areas.
We are reevaluating all options here as we look at the impact of the floods in the Midwest, the cropping patterns across the country. I was hoping to make the decision on the '09 crop year as it relates to early release of CRP sometime in August, early September. We've accelerated that decision process. We're visiting about these things as we speak, and I hope to be making some announcements on which way we're going to go there over the next couple of weeks.
MODERATOR: Thank you. The next question comes from Bill Tomson of Dow Jones followed by Jerry Hagstrom. Bill?
REPORTER: My question was on country of origin labeling, and I think you answered that. Just to clarify though, once this happens, once it's implemented in October 1, do people have six months to actually do it? There will be a grace period?
SEC. SCHAFER: Well, we expected to do it right away, Bill. We wanted to do it now. We understand that this takes awhile to implement. Sometimes you need new packaging materials. You want to run out some of your old packaging materials, all that kind of stuff. We're not going to be in there being the labeling police here over the first six months. It's not going to say, gee, here's the target October 1, and by the way take six months off. You know, we want them to implement it immediately, but we're going to be working with those retailers out there, and the packagers, to make sure that it is phased in and by the end of the six months that we'll have full compliance.
REPORTER: Thanks.
MODERATOR: Next question comes from Jerry Hagstrom from Congress Daily, and standing by is Catherine Brosseau from ABC News. Jerry?
REPORTER: Good afternoon. I have a couple questions here. Will rulemaking for the new ACRE program be done in time for the fall planting of the winter wheat crop? And when do you think you'll have the rules for the permanent disaster program?
SEC. SCHAFER: The permanent disaster program is going to be longer, Jerry, because we specifically do not have any expedited authority in the new farm bill. Some of the programs do give us an opportunity to work faster. This one specifically does not. I doubt that we will see that final rule period before we leave the administration here in January. The first part of your question was on ACRE?
REPORTER: Whether the rulemaking will be done for ACRE in time for the planting of winter wheat.
SEC. SCHAFER: I do not believe so. You know, we've got to start prepping fields here shortly, you know, for the winter wheat, and it's unlikely that we'll have the rulemaking process. We've been working on this, Jerry, in the context of the floods. And what we want to make sure in the rulemaking process is, we don't make some requirements here that would exacerbate the problems that producers are having in the Midwest already because of the flood. And that has to do with this is a total farm income revenue program. If we can get some people in because we need a supply out there, if we can get the people in short season crops and maybe some second plantings, and in some cases third plantings, you know we don't want them to have to suffer economically because of that so we're going to try to take that into consideration in the rulemaking process. But I doubt if it's going to be complete.
Chuck, do you have anything to add on that?
DEP. SEC. CONNER: I'd just add too, Jerry, that we're working closely with Congress to obtain some additional implementation resources here for Farm Service Agency. Those additional resources, both for personnel as well as for IT equipment will be necessary in order for us to have any kind of timely implementation of the ACRE program. Our advisors tell us that the data that is necessary to implement ACRE simply cannot be put upon the current computer system that is housed in the Farm Service Agency, and there will need to be changes in that system before we can implement ACRE fully.
MODERATOR: Next question comes from Catherine Brosseau from ABC News, and standing by should be Keith Mercks. Catherine?
REPORTER: Secretary Schafer, thank you for doing this Q&A. I was wondering if you'd be willing to sit down for an interview with ABC News to talk about the farm bill?
SEC. SCHAFER: I think, if I had to get you in front of somebody in our communications shop, if we could give you a call afterwards?
REPORTER: Yeah. We did talk to somebody in your communications shop, and they said you were unavailable for an interview during the next two months.
SEC. SCHAFER: Oh, my goodness!
REPORTER: Yeah. They said –
SEC. SCHAFER: What all do they have me doing?
REPORTER: Yes. And I said we could come to wherever you are and come to you if we need to if you're too busy. You know, if wherever you're traveling or whatever you're doing with the agriculture department. We would just like to sit down with you for a little while.
SEC. SCHAFER: Well, Catherine, you know I'm always open and available to the media and to your questions, and we'll figure out some way to get some time with you some place.
REPORTER: Oh, great. We'd appreciate it. Yes, sometime during the next two months that would be great. Thank you.
SEC. SCHAFER: Okay. Thank you.
REPORTER: Thank you.
MODERATOR: Next question from Keith Mercks from CBS in Dallas, followed by Haley Ship. Keith, go ahead.
REPORTER: Thank you very much, Larry. Good afternoon, everybody. We've got the farmers in the Panhandle in South Plains being encouraged to plant sorghum behind some failed cotton crops, but there's a problem and that problem being the new farm policy. Adjusters can't make it out to the fields to assess the damage fast enough for people to turn around and replant in grain. Sorghum crop won't be insured due to, well barring a second cropping rule. So USDA and FSA will be asked, if they're not already, that the second crop sorghum not be counted toward the calculation of revenue when calculating the disaster payment for the farm. Farmers see that pretty important because, you know, these rules were not in play when they made their planting decisions. Is that going to cut any ice, any leeway on that possibly?
SEC. SCHAFER: I think the issue here is Capitol Hill. These rules are in statute. We don't have a lot of opportunity or flexibility as we deliver those, so I think I'd urge you to redirect your question to members of Congress here who would have to be involved if there are going to be any changes in the way this gets delivered.
MODERATOR: Next question will be from Haylie Shipp of Northern Ag Network. And she'll be followed by Stewart Doan. Haylie?
REPORTER: Hi, Secretary. I'm going back to COOL here, and I guess you've been speaking a lot on the retailer side of it. And I'm wondering as far as livestock producers I believe that all cattle that are in the U.S. are going to be grandfathered in at some point this summer, and I guess what responsibility will people have that are calving this fall as far as documenting their calves?
SEC. SCHAFER: Well, I guess, I suppose that depends whether it comes before October 1 or after October 1, but we're going to implement the law, and producers as well as retailers are going to be required to follow this labeling rule. And come October 1st, those calves that come on the ground are going to have to be labeled.
MODERATOR: Next question will come from Stewart Doan of AgriPulse, and he'll be followed by Jim Berger. Stewart?
REPORTER: Thank you, Larry, and good afternoon, Mr. Secretary. I understood you to say early on that rulemaking for the new permanent disaster program may not be finished before the administration leaves office. The American Farm Bureau in a letter to you yesterday suggested one option to help farmers in the flooded affected areas would be for USDA to make advanced disaster payments. Given your statement earlier about the rulemaking timeline, is this advanced disaster payment something that you all view as unlikely to happen, given that the rules may not be available?
SEC. SCHAFER: I think it is unlikely to happen. There is some question whether we have the statutory authority to do so. Currently some lawyers are saying yes and some no, which is not unusual. But we do have that issue to find out specifically, are we able.
You have two other problems.
One is, a year from this harvest season is when we can evaluate what a disaster payment might be. As you know, the program is based on an annual average price, and we won't know that until a year from October or say October of '09.
The other issue is the Farm Revenue Program. And as we see prices that are very volatile these days, and we don't know if somebody loses their corn crop if other crops that they are growing are going to see increased prices, and the total farm revenue will be enough so that they don't get a disaster payment on the corn.
So it's going to be almost impossible to estimate what a cost would be, and if we can't estimate what a payment might be, it's pretty hard to give you an advance or a portion of that. So you know, unless Congress sees fit to make some changes in the way we have to deliver this program, I do not think it's likely to see an advanced payment.
REPORTER: Thank you.
MODERATOR: Next question will be from Jim Berger of Washington Trade Daily, and Jim will be followed by Luke Engan. Jim, go ahead, please.
REPORTER: Yes. Thank you, Mr. Secretary. I think about a week ago when you returned from Rome you said that you were anxious to start implementing the pilot Foreign Assistance Program, which would be the purchase of local commodities for emergency food situations. Can you give me any more details on that, or are you planning to move ahead, and what area of the world?
SEC. SCHAFER: I can't give you anymore details there, Jerry. My anxiousness hasn't caught up with me yet, you know. But we've got – you know that was in the trade title, which is the colossal mistake of Congress to drop that piece out. And that didn't get back on the table until June 18th. So like I said, my anxiousness hasn't caught up with action here yet. But it is a program that we're very intent on delivering here, and as soon as we can get to it we'll have to get you those details because we don't know them yet as to when and where we might implement this pilot program.
MODERATOR: Next question is from Luke Engan from Inside U.S. Trade. And standing by is Jerry Hagstrom. Luke?
REPORTER: Mr. Secretary, I wanted to ask about the QSA program that Agricultural Marketing Service carries out. As that program is now being asked to verify the age of cattle associated with beef shipped to Korea, will USDA use only National Animal ID animals for export to Korea or use dental inspection to verify the age?
SEC. SCHAFER: I don't know that yet. You know, the agreement between the United States and Korea on this issue was just announced within hours ago seems like, and we don't know – we are charged at USDA to come up with a verification system, and we will do so.
I'm not sure if you just use teeth or if we have to only use premises. My suspect is, we have to come up with a different system because we only have about a third of the premise registered for the National Animal ID system. That's not enough to supply our export needs. So we'll have to use other verification techniques, which very well could include the oral examination. So we'll see how that unfolds, but as to date we are just getting that requirement for USDA on the table and aren't exactly sure how we're going to implement it yet.
REPORTER: Thank you. Just quickly, I wanted to ask about the Lacy Act Amendments. Is USDA implementing the expansion of the Lacy Act for illegally taken plants? Or is that strictly a CBP function?
SEC. SCHAFER: Can you translate that into real language?
REPORTER: Sure. The expansion of the Lacy Act that essentially requires documentation to avoid any illegally logged tropical lumber, among other plants.
SEC. SCHAFER: And what was the other? You used an acronym.
REPORTER: Oh, the Customs and Border Protection. I wasn't sure given that APHIS inspectors had gone over there whether it's USDA that has to implement that part of the farm bill.
SEC. SCHAFER: I don't even know. Can't tell you. And you're drawing blanks from our expert team here, so you've stumped the panel.
MODERATOR: Our next question is from Jerry Hagstrom of Congress Daily. Jerry?
REPORTER: Yes. The people who are very concerned about bee colony collapse disorder and other issues involving pollinators are having briefings, and there's a hearing tomorrow on Capitol Hill. They are stressing the fact that there is new authority given to USDA to emphasize the pollinators in conservation programs and in research. Do you have any indication so far as to what you will be doing differently on pollinators after, now when you're implementing the new bill than what you were doing before?
SEC. SCHAFER: Yeah, I think the changes that we'll see here is, it looks like as we've gone on that we've been able to identify a potential source which is a virus, a certain virus that is affecting the bees. The vector on that seems to be a mite of some kind, and so now the new word I learned was mitocydes. We're looking at the mitocydes to see if there's a way that we can deal with that mite that transfers the virus from bee to bee.
So I think now we've kind of gone through this investigation phase, and we'll start now looking at a phase of research that will see if there's a way that we can deal with this virus and the mite to go forward. So it's a process, and it takes a long time. I know everybody's anxious about this, but I would urge those on Capitol Hill to allow the process to work through and not try to make changes in it or dump a whole bunch of extra resources on the project.
You know, we are providing and focusing properly here our resources at USDA, and we'll continue to do so. And I think that we've got a better direction now of the research that's been done in the past year or so, and so we're looking forward to climbing out of the hole on this one. But it is still going to take some time.
MODERATOR: Our final question today is from Stewart Doan of AgriPulse. Stewart?
REPORTER: Yes, Larry. A question for Deputy Secretary Conner. You mentioned early on that you needed upgrades at FSA in terms of software and computers and such to implement ACRE. I'm wondering, will the Department be seeking something in a supplemental coming down the pike to satisfy this need, or can this come out of the $50 million that Congress gave USDA for implementation?
DEP. SEC. CONNER: Stewart, that would be funding that is needed above the $50 million of administrative expense that Congress appropriated as part of the farm bill. That was an inadequate amount of administrative money that Congress provided. They knew that, but failed but give us all of the amount. We are working now with the Congress and with our Office of Management and Budget not only to get some additional money for personnel on the ground to administer the new farm bill, but as well these IT needs that we're going to have to have in order to create the databases necessary for programs like ACRE, for the new disaster program, those kind of situations.
REPORTER: Do you have an estimate at this point –
SEC. SCHAFER: We were looking there for double the amount that Congress allocated. They were I think as close to $55 million, is it now, Floyd?
MR. GAIBLER: Well, yeah. I mean, if you just look on the administrative side of it for personnel and other costs, we probably are going to need closer to four times that amount, and then we've got an additional amount for our modernization program. So this is a significant amount of dollars that we need to effectively implement.
REPORTER: Upwards of $200 million then for everything?
SEC. SCHAFER: What was that?
REPORTER: Upwards of $200 million will be necessary to do everything you need to do?
SEC. SCHAFER: Well, we have – let's not cross over. You know, we've got some current resources for modernization. We've got implementation resources, and you know all of that is a tough number to absorb. We've got to look at it as similar to the 2002 Farm bill. On that, we spent about $150 or $160 million to implement, and $50 [million] of that was initially put into the '02 farm bill. We had another $50 or $55 [million] through additional resources from Congress, and the rest we absorbed internally.
So we're probably looking in that similar framework for just specifically for the implementation of this legislation.
REPORTER: Thank you.
MODERATOR: Reporters, thank you for your questions and participation. Mr. Secretary, any final thoughts today?
SEC. SCHAFER: No. Thank you for joining us. We appreciate it, and you know once the policymakers get done, it's our job here at USDA to deliver this farm bill. And we look forward to a swift, efficient and as always USDA-well-done-job to get this farm bill implemented again in the street, so services are delivered to our farmers and ranchers and landowners across this country.
MODERATOR: Secretary of Agriculture Ed Schafer.
I'm Larry Quinn bidding you a good afternoon from Washington.
