tunity to appear here on behalf of the farmers in my district and the consumers throughout the country.*

My district, the Third Congressional District of Wisconsin, is the largest dairy-producing district in the Nation. Obviously, anything that affects our producers eventually affects all consumers of dairy products.

Farmers in the Third District were grateful when Gov. Patrick Lucey requested President Ford to declare a drought emergency for 18 counties in northwestern Wisconsin. Their interest was not academic; it was very practical. Feed crops and pastures had been badly damaged by the extended drought. Harvests were averaging only about 20 percent of normal yields. Feed was scarce and very expensive. The entire Wisconsin congressional delegation backed up the Governor's action in a letter to President Ford asking him to honor the request.

On June 17, the President did declare a drought emergency.

I conducted an aerial tour of the drought-stricken counties in my district that same weekend. I found that while some rain had fallen, it was too late to help first crop hay and oats. The feed situation was still serious. But farmers believed that meaningful help was on the way. However, a number of problems with the emergency program, as administered by ASCS, under the direction of the Federal Disaster Assistance Administration, quickly became apparent.

Farmers had expected to pay inflated prices for hay because of the shortage. They did expect, though, that the program would at least pay the transportation costs incurred in getting supplies to the farms from distant locations. Transportation costs, in most cases, are more than the cost of the hay itself. For economically depressed producers, having to pay a third of the transportation costs in addition to inflated costs for the hay, is an added and unnecessary burden.

Senator Mondale's bill would get to the heart of this problem. It would provide full coverage of the transportation costs. It would also answer the arguments of Wisconsin's ASCS director, Keith Kreul, who seems to be more concerned that somehow producers might make a profit than he is with the real needs. The bill answers that charge by requiring that the hay be fed and not sold. The 30day problem that is in the present program is not an adequate time frame in order to get a response time; that is where the 90 days would be a real help.

Another major problem with the drought assistance program deals with its duration. The program was announced on June 7, 1976, but the details were not available in county ASCS offices until June 23, 1976. As interpreted in Wisconsin, the hay must be delivered to the farm by July 16. That is an unreasonable time frame, considering that the farmer must get his papers together, make application at the ASCS office, arrange to buy the hay from a distant point, arrange transportation and accept delivery.

But the most serious deficiency in the program is the eligibility requirements. Any cattleman or dairyman who has access to a 30-day supply of feed is ineligible. That means that if he harvested even 20 percent of his normal yield, he cannot participate. That requirement will knock out a large number of farmers who really need help. The

*See p. 75 for the prepared statement of Representative Baldus.

problem stems from the fact that while they may have a 30-day supply of feed, they normally would be putting their hay up for winter. The 30-day stipulation only postpones their shortage problems. As one farmer put it, "If I feed my hay now, what am I going to feed my livestock next winter-snowballs?"

The ASCS and the FDAA have both assured me that the program will be reviewed for possible extension beyond July 16. That is little comfort to the dairyman or cattleman who is trying to decide whether or not to cull his herd or to liquidate entirely because of the lack of sufficient Government assistance after a natural disaster over which he had no control.

Senators Proxmire, Nelson, and Congressman Obey and I have outlined some of these problems in a letter to Agriculture Secretary Butz. (That letter is attached.) * We have asked him to review and reverse the limitations on the program.

There are other examples of bureaucratic bungling in the administering of disaster aid programs. One of the most blatant has taken place in Wisconsin. It deals with the emergency livestock feed program which has had to be extended over the past few years. That program is supposed to provide feed grain to economically depressed farmers in drought-stricken counties. Qualified farmers can buy grain, in this case oats, from CCC stocks at county loan level prices. The program should be of benefit to producers because the loan rate for counties in my district is 60 cents per bushel and the market price is about $1.80 per bushel.

But it hasn't worked out quite that way.

When county committees received notice on May 25 that the program was being extended, they checked with the State ASCS office to determine whether or not farmers should include standing crops and pastures in calculating their eligibility. The State office advised the counties that since harvest from standing stocks would be "almost nil," and that pastures were in such poor condition they should not be included in determining eligibility.

Relying on that information, farmers were qualified and put up the money-some of it borrowed at high interest rates-to participate in the program. On June 7, the State ASCS director reversed his earlier decision: standing crops and pastures were to be included for eligibility. It is a gross understatement to say that the producers were upset.

The ASCS can't do much about farmers who have already received and fed the grain under the program, but producers who have not received delivery no longer qualify under the rules-in-retrospect. Their money will be refunded, I am told, and the ASCS is "looking into" the problems caused by their actions, concerning the additional interest debt farmers incurred by borrowing enough money to participate in what was supposed to be emergency assistance.

I have also advised Secretary Butz concerning these problems and asked him to reverse this duplicitive action.

It seems obvious that the congressional intent to provide meaningful help to producers who have suffered severe economic losses due to natural disasters is being thwarted by the administration of the programs.

It seems apparent that there is a need for additional legislative action which will force the administration to carry out the will of

*See p. 76.

Congress. Senator Mondale's bill is a step in the right direction. I give it my full support.

I also wish to express, on behalf of producers and consumers in my district, my full support to the efforts of the subcommittees, through these hearings, to review the broad spectrum of Federal disaster assistance to assure the confidence of a viable agriculture industry despite the variables of nature.

I have also included an up-to-date assessment of the program in Wisconsin from Governor's Lucey's office, prepared by the Wisconsin Department of Agriculture. It is quite detailed. I am sure your staff will be able to go over it and depend upon it.

Senator HUDDLESTON. We will be glad to receive it.*

Mr. BALDUS. I would just like to add that lightning doesn't strike twice in the same place, we are told, but drought does-and, in addition, you can have floods and frost early and late. And with many of these conditions, like the one mentioned earlier, for 5 years in a row there have been problems. We have communities like that. And farmers who are very good managers

Senator HUDDLESTON. Is this happening in your section of the country?

Mr. BALDUS. Yes.

Senator HUDDLESTON. It has been recurring through the years? Mr. BALDUS. Yes; I was on a farm less than a month ago where the farmer had a third year in a row, and every farmer that was along in that group said, look, this guy has done everything, from a management point of view, that ought to be done-he has fertilized well, he has managed well, he is well-financed. But we are going to lose this farmer and a lot more like him unless we can provide some kind of outside help.

Senator HUDDLESTON. Does that indicate to you that there is some sort of a trend toward drier weather in that area?

Mr. BALDUS. I have attended several seminars, one with Senator Humphrey, that concern me. I am concerned about that. On the other hand, we have, in the southern part of my district almost unusually good weather and unusually good crops.

Senator HUDDLESTON. Talking with your constituents, what would you consider to be the biggest weakness of the present programs as they are being administered?

Mr. BALDUS. A lack of visibility and dependability, I think is a great thing. The concern as to really if there is something there, and, if there is, well, what it might do to respond to the program. Certainly with the emergency order from the President-timing is inadequate, the 30-day time frame is inadequate: the two-thirds cost of the hay-because usually when hay becomes short some place in the country it drives the price up all over. As soon as you start pulling out of a community at an inordinate time and inordinate amounts, the price goes up very rapidly.

be

So that is another aspect of it.

Senator HUDDLESTON. More flexibility, more coordination, would

Mr. BALDUS. Yes; between the programs, the various programs, because it is difficult even for the ASCS directors to understand what may be available-and that is demonstrated in this testimony, where there is a good deal of signal changing because of interpretation.

*See p. 78.

Senator HUDDLESTON. Do the farmers in your area avail themselves of crop insurance to any great degree?

Mr. BALDUS. Yes; crop insurance in Wisconsin is not nearly as strong as it is in Minnesota. Minnesota has a more thorough saturation of crop insurance. But I think that program, too, if that is our answer to it, has to be broadened considerably. The present program, it is difficult to cope with these kind of problems.

Senator HUDDLESTON. How would it work in the case where you have virtually a total wipe-out because of drought?

Mr. BALDUS. Well, my understanding of the crop insurance program-it might be a life-saving, that is, for that year, but if you have a succession of years

Senator HUDDLESTON. You can't buy the insurance.

Mr. BALDUS. That's right. And it wouldn't respond to the artificial prices when you have a succession of droughts, 2 or 3 years in a row. Senator HUDDLESTON. Thank you very much, Congressman.

Mr. BALDUS. Thank you, Senator, I appreciate it very much.

Senator HUDDLESTON. Senator McGovern, we are glad that you have joined us this morning.

Senator McGoVERN. Thank you very much, Mr. Chairman: I have an opening statement that I wanted to file, if I may. You know I had to make an emergency trip to the dentist this morning to get some rather urgent repair work done, but I would like to submit this statement for the record, and express my appreciation to you for chairing these hearings.*

Senator HUDDLESTON. We are both indebted to Senator Humphrey who was here when it started.

Do you have a further statement at this time?

Senator MCGOVERN. Nothing other than to say, Mr. Chairman, that I think these hearings are very important, not only to look at the emergency proposals that are before us, but also to look at some of the possible long-term deficiencies in the way we respond to disasters, and especially these protracted droughts and other disasters. I think it is clear that we need to take a very critical look at the way our emergency programs are structured, at the way criteria is established, as well as the chain of command that people have to go through in qualifying for aid and it may very well be that out of these hearings and out of the testimony we can make some legislative recommendations to improve the way we respond to disasters of all kinds.

Senator HUDDLESTON. Thank you, Senator. Our next witness, then, is Mr. John A. Knebel, Under Secretary of Agriculture.

Mr. Knebel?

STATEMENT OF HON. JOHN A. KNEBEL, UNDER SECRETARY OF AGRICULTURE, ACCOMPANIED BY DR. JAMES BOSTICK, DEPUTY ASSISTANT SECRETARY, AND VICTOR SENECHAL, ASSISTANT DEPUTY ADMINISTRATOR, ASCS

Mr. KNEBEL. Good morning, Mr. Chairman. I am accompanied this morning by Dr. James Bostick, the Deputy Assistant Secretary, and also Vic Senechal, our Assistant Deputy Administrator of ASCS.

*See p. 81 for the prepared statement of Senator McGovern.

We very much appreciate the committee providing us an opportunity to discuss the emergency and disaster programs available to farmers in the United States.

There are laws and regulations on the books which provide for virtually every conceivable agricultural disaster. Any new disaster coverage would almost certainly duplicate and overlap some programs now in existence. Further, it should be noted that all Agriculture agencies respond to mission assignments by the Federal Disaster Assistance Administration when a Presidentially declared disaster or emergency occurs. These programs are administered through nine different agencies of the Department of Agriculture.

And I am sure Senator McGovern's earlier reference to our delivery system is just an indication of the complexity that we have.

Perhaps it might be well, however, to take a few minutes and discuss some of our programs and the help which we can provide.

Initially, the Agricultural Marketing Service is able to petition the Interstate Commerce Commission to grant authority to railroads to reduce freight rates on short notice for shipments of needed commodities into the affected area. And, as Senator Mondale indicated, there has been an ICC petition filed with respect to this present disaster, and we are getting some relief.

The Animal and Plant Health Inspection Service is authorized to help prevent, control, or eradicate emergency outbreaks of plant and animal pests and diseases.

The Extension Service may offer practical information to affected farmers about alleviating disaster damage, clean up, sanitation, insect control, emergency food preparation, recovery and renovation of damaged equipment and property. The Extension Service, with offices in every farm county, can also give guidance to disasterstricken farmers who seek aid available from other agencies.

Our Food and Nutrition Service establishes special eligibility standards for emergency food coupon allotments in the case of certain disasters. Most recent instance of this was the Teton Dam breakup in Idaho where we put our food stamp emergency coupon program into operation.

The Forest Service has the authority to carry out fire protection and rescue work and to detect, prevent, and control emergency outbreaks of diseases and harmful insects.

The REA provides loans and technical assistance in restoring telephone and electric service after a disaster.

The Soil Conservation Service provides emergency assistance under section 216 of the Flood Control Act of 1950. This includes technical and financial assistance needed to safeguard life and property from future floods and the products of erosion in watersheds suddenly impaired by a natural disaster. In addition, technical assistance is provided by SCS under their regular operations program to landowners in drought and flood areas to give immediate relief from wind and water erosion damages.

FCIC obviously makes restitution for crop losses to farmers who have subscribed in advance.

The Farmers Home Administration has authority to provide emergency loans. It is actually our most utilized and heavily involved