GRASSLEY: Last week, I told you all about a new Government
Accountability Office report, a report that I had requested. The
report outlined many instances where the Department of Agriculture
made nearly $50 million worth of potentially improper payments to
farmers who exceeded income eligibility requirements. I'm concerned
that the management controls current in place at the department will
be even more inadequate with the new limits set in the 2008 Farm Bill.
In other words, it's going to be a little more complicated. But
more farmers will be affected so more important for the department to
be on top of it to make sure that people that aren't qualified don't
get the money.
The new criteria in the bill includes a split adjusted gross
income limit for farm and non-farm income as well as separate income
caps for direct crop subsidy, disaster and conservation payments. The
lower income caps will, of course, bring scrutiny to even more
participants and require the Farm Service Agency to examine several
different items to determine eligibility.
Considering the fact that the Farm Service Agency had identified
nearly 100 ineligible recipients under the old Farm Bill yet did
nothing about it, you can see why I have so much concern.
So this week, I'm sending another letter to the Agriculture
Department asking several questions about the findings of the GAO
report. My letter asks what controls the Farm Service Agency is
putting in place to ensure that future farm payments will only go to
those who are eligible under the law. I'm also interested in learning
what the department develops with the Internal Revenue Service for
verifying income eligibility for recipients of farm program payments.
My report got the attention of the president-elect last week as
part of his efforts to curb wasteful spending. I'm looking forward to
working with the present secretary, Schafer, as well as the president-
elect and his new secretary of agriculture to ensure farm payments
going to those who are entitled to it and not to people that are not
entitled to it because of high income.
I'm ready for questions on any subject.
QUESTION: Good morning, Senator. Are you optimistic that the
new administration will take the issue of farm program payments
seriously? That was -- that subject was something that was mentioned
in then Candidate Obama's position papers on agriculture. He seemed
to be concerned about targeting payments to those who do not have
extremely high income.
GRASSLEY: Yes. Well, first of all, even in the present
administration, for the last three budgets, you saw efforts to get
tighten income limits. That's a necessary first step.
The second one is with the new administration and one that is
probably not tied as much to the interests that have been so opposed
to those payment limitations. It's very helpful.
People, I think -- probably, people with the organization like
the National Farmer's Union is going to have a bigger voice in the
Department of Agriculture then, maybe, they have in the past. They
support this very much.
So I think we're going to get a new look, and I'm hopeful.
QUESTION: Just to follow up. You said the Farmer's Union does
support these limits?
GRASSLEY: Well, they would -- they would support our limits that
we had in the $250,000 cap.
QUESTION: OK. Thank you.
GRASSLEY: Yes.
OPERATOR: Tom at WNAX?
Gene at Iowa Farmer Today?
QUESTION: Yes, Senator. Just a brief follow up to that. What
about from Congress with post election? Do you see any differences
there as far as support for this?
GRASSLEY: Well, I think that with Senator Harkin agreeing with
income limitations and still being chairman of the committee, an
enhanced Democratic majority, that that would surely help.
OPERATOR: Tom at Brownfield?
QUESTION: Good morning, Senator. I see that Canada is thinking
about or moving toward it, WTO challenge over country-of-origin
labeling. Do you think that that's going to, perhaps, cause
disruption to what has taken place in the implementation of that law?
GRASSLEY: Well, yes, very definitely. But what we don't know
yet from their filing -- and remember this is a preliminary step and
there's a long road to hoe. They haven't even filed their basis for
such an action. And so we don't really know how they're approaching
it from a legal standpoint. So I don't know how far this is going to
go without more information from the Canadians.
You hardly get a basis for it. But don't forget, we've got a
chance to react. Don't forget that if this would go to a full
process, it's easier -- two or three years. And so right now, I'm not
sure that there's much to be overly concerned about as far as I can
tell.
OPERATOR: Ken at WHO?
QUESTION: Good morning, Senator. I wonder if you could address
two areas. And that is these bankruptcies of Agriprocessors and
VeraSun. Do you feel like that they are adversarial to agriculture
overrule or just specifically to those farmers who might have
contracts with them?
GRASSLEY: I think that on ethanol, the bankruptcy of one or
more, the respective sale of one or more, the mergers, raises
questions that's detrimental to all of agriculture because so much of
the present rise in prices are based upon the evolution of ethanol as
a -- as a fuel. And so I'm very concerned about that and the impact
on overall agriculture.
In regard to Agriprocessors, I think it's more local than it is
national. I guess you might say, from the standpoint of the Jewish
community and kosher meat, it's a national issue because it's -- they
were a major supplier and it's difficult for other suppliers to come
up. But from the standpoint of the agricultural economy, it's more --
it's more localized.
QUESTION: Thank you.
OPERATOR: Dan in Spencer?
QUESTION: Good morning, Senator. Senator Harkin is urging the
USDA to intervene on behalf of producers and auction barns in that
Agriprocess bankruptcy and believes many of them are not getting paid.
And he says the USDA has an obligation to step in because they knew
they were problems there.
Do you have a comment on that? Exactly what is Harkin asking
USDA to do?
GRASSLEY: Yes. I do have a comment. And I need to correct
something that I said an hour ago in another interview -- not with any
of you folks. But I said that, unlike Senator Harkin, I hadn't been
contacted by any farmers on this issue. And I found out in the
meantime that we recently have had some farmers contact us.
And if farmers are going to be protected and get their money
back, they're going to have to file through -- go through GIPSA and
with the bankruptcy court.
And where we are in this situation is Senator Harkin's view that
the Packers and Stockyards Act ought to be enforced, hasn't been used
as a tool against Agriprocessors as kind of a preventive measure. I
think he's taken the position that GIPSA -- or the Packers and
Stockyards Act could have been used to protect farmers when
Agriproducers (sic) didn't have enough resources. Or maybe the
implication is that packers and stockyard people should have been on
top of it to know that maybe Agriprocessors didn't have enough
resources to make sure the farmers were adequately paid.
But the problem is the law has got certain bonding requirements
that probably are old, not up to date, with the higher cost of -- of
purchase of live animals. And, consequently, not as much protection
for the farmers as they would have been when those income limits were
set.
Well, as long as those income limits are set and Agriprocessors
have that sort of bonding capacity, there's not much that the packers
and stockyards people can do as long as -- as long as they are
protected up to that limit. So it seems to me that part of it, we
have to look at increasing those bonding limits to a more realistic
level.
But I would support Senator Harkin in every effort he can to get
the producer the money that they're entitled to from Agriprocessors.
And I would also encourage packers and stockyard personnel to be on
top of situations like this. And if these bonding limits aren't as
high as they should be that they would come to us and ask the law to
be increased.
QUESTION: Senator, if I might follow up. Is this -- part of
what Senator Harkin is asking is asking the bankruptcy court to maybe
put some of these producers ahead of others who are owed money by this
company?
GRASSLEY: He can't do that because the law is pretty strict on
the priority of those things. He would have to change the law for
that to happen.
QUESTION: All right. Thank you.
OPERATOR: Chris at DTN?
QUESTION: No questions this morning.
OPERATOR: Stacia at National Farm Broadcasters?
Gary at Arkansas?
QUESTION: I have nothing today. Thanks.
OPERATOR: Phillip at the Register?
OK. We've gone through the entire list. Does anybody have a
follow-up question or did anybody get added late?
QUESTION: Senator, this is Dan Spencer again.
GRASSLEY: Yes.
QUESTION: At the beginning of your program this morning, you
mentioned the payment limitations. There's a news story. Reuters has
it out that House members are going to be meet welcome the Obama
transition team on this issue. Have you made any efforts or is anyone
in the Senate making efforts to meet with that transition team?
GRASSLEY: No, I don't think so. And I, more or less, would
expect to do more of my work through who's going to be the new
secretary of agriculture designee.
QUESTION: Senator, Ken Root here.
Speaking of that, there's two names that seem to be on the list.
One is Stephanie Herseth from South Dakota and the other Collin
Peterson. Could you react to either of those?
GRASSLEY: Well, I know Collin Peterson well and have no doubt
about his qualifications to be secretary of agriculture.
And I don't know the congresswoman South Dakota, so I don't think
I can comment on hers except to understand that people from South
Dakota and, particularly a congresswoman from South Dakota understands
agriculture well. But I don't know her very well. I have had visits
with her but just don't know her well.
QUESTION: Mark Pearson nominated Dr. Neal Horrell
yesterday. I think Dr. Horrell is not going follow through on
that, however.
GRASSLEY: Well, I'll bet you -- I'll bet you Dr. Horrell,
if he had a chance to be secretary of agriculture, he would be and
would be a good person, too. And he's also, you know, got farm
land so he knows all about farming besides the economics the farming.