the select committee looks forward to working with your committee in the future and i thank you again. the select committee very much looks forward to working with your committee in the future and i thank you again. >> thank you so much for your testimony. i know that this is a busy day for all of us including you pick you up and bouncing from hearings so we will excuse you from the panel, as well. thank you for joining us. thank you for your leadership and for sharing with us this t morning. much appreciated. >> thank you so much. >> we will take just a brief break to, no more than five minute recess, to allow our first panel witnesses to depart. our second panel witnesses to take their seats and then we will reconvene. we will reconvene, basically, as soon as our witnesses get comfortably seated here and

ready to go. [captions copyright national cable satellite corp. 2024] captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org.

mr. thompson: meeting will come to order and pleased to welcome our second panel on this topic today regarding the threats of china to american >> the committee will come to order. really pleased to welcome our second panel on this topic today regarding the threats of china to american agriculture. our first witness for the second panel of our hearing today is mr. josh gackle, the president of the american soybean association. her second witness for this panel is mr. nova daly, who brings extensive public and private sector experience, numerous agencies, the senate, and the cfius committee , all involved on national security matters. our third and final witness for this panel is a great friend of the committee and of the industry, ambassador kip tom.

the former united states ambassadors to united nation agencies for food and agriculture. thank you to our witnesses for joining us today. we will now proceed to your testimony. you reach a five minutes but the time in front of you will count down to zero. at which time, at which point your time is expired and that will be fired -- followed by a question and answer. after all three of you have spoken. mr. gackle, please begin when you are ready. >> thank you, chairman thompson and ranking member scott and members of the house agriculture committee. thank you for allowing me to testify today. my name is josh gackle and i'm a soybean farmer from north dakota where a farm with my dad and brother on a third- generation family farm. this year i also have the privilege of serving as president of the american soybean association, which represents you as soybean farmers across 30 states. been the largest u.s. agricultural export and robust

international trade is a priority for our farmers. u.s. soy is actively working in 112 markets across the world to introduce new customers to our high quality, high protein crop. opening new markets has been one step followed by time, attention and long-term relationship maintenance to ensure market access. our trading partners are all critical to the success of u.s. soy farmers but no expert compares to china. in the last marketing of the expert value of u.s. soybeans totaled over $32 billion. china accounted for nearly $19 billion of this total. for perspective, the next largest destination by value totaled approximately $3 billion. the sheer scale of china's demand for soybeans cannot be replaced and an farmer turns one in every three rows grown in the u.s. and ship to china to fill demand. during the 2018 trade war, u.s. soybean exports to china came to a halt and an estimate of the impact of retaliatory tariffs on u.s. agriculture,

the usda found the value of u.s. exports to china increased, decreased, 76% from 2017 to 2018 and it estimated the trade were cost u.s. agriculture over $27 billion pick soybeans accounted for 71% of these annualized losses. this has had major consequences on the competitive landscape for u.s. soybean growers. as a result of the trade war, brazil ramped up production to meet chinese demand. beyond capturing additional market share in china, brazil was prompted to increase its land area in agriculture production. in the 2017 and 2018 marketing your brazil overtook the united states as the world's largest producer of soybeans. our farmers now face increasing competition with brazil and in

every export market, not just china. the trade war damaged our reputation as a reliable provider of soybeans and soy products in global markets. the section 301 tariffs on the retaliatory trade actions have jeopardized our place in these markets and damaged in country relationships developed over decades. at times our customers look elsewhere for their needs to avoid trade risk or excess duties. as the united states considers action to protect our national security interests, we must also maintain and protect our economic and trade interests as well. soybean growers need predictability and certainty that we will retain market access in china. my written testimony provides three policy recommendations. number one. reject legislative attempts to repeal or modify china's permanent normal trade relations status. a.s.a. is concerned revoking p and tr for china would have severe consequences and in 2018 u.s. soybean exports to china were among the first agricultural commodities targeted for retaliatory tariffs and the past is prologue it's possible u.s. soybeans would be impacted yet again.

number two, pass a comprehensive farm bill that meets the needs of u.s. agriculture. the new farm bill should include additional investment into trade promotion programs that are critical to the long- term success of u.s. soy abroad. funding levels for the market access program and the foreign market development program have been largely unchanged for decades, even the demand for these programs has increased. the new farm bill should include improvements to the farm safety net during the trade for you as soybean farmers experienced firsthand the insufficient farm safety net under the current farm bill. very simply we need better tools to help farmers in times of economic disruption and greater resources to expand and diversify trade markets. and number three, exercise congressional oversight authority to press the administration to re-engage in negotiations for bilateral and multilateral free-trade agreements. the u.s. was once a leader in establishing new free- trade agreements but our last new fta entered into force in 2012. despite the was having to go seated the trans-pacific partnership that's over 10

years of inactivity for codified, market expansion that could've helped u.s. agriculture . at the same time our international competitors i worked to gain increased market access. so thank you again as a farmer from north dakota and on behalf of the american soybean association, it's a privilege to be with you and take you for this opportunity to share the perspective of u.s. soybean farmers with you. i look forward to your questions. mr. chair. >> thank you peer leadership and your testimony today. now, please recognize mr. daly. begin when you are ready. >> chairman thompson, ranking member scott and distinguished members of this committee. thank you for the opportunity to appear before you today to discuss this critical and timely manner. i'm honored and humbled to be before you today among the exceptional analysts you have assembled. the views i share on

my own and informed by my service in the u.s. government where i was fortunate enough to serve along with colleagues in the national security council, commerce department, senate, and treasury, where i ran the committee on foreign investment in the united states. i got to witness firsthand for many years the actions of china as it conducted and directed actions through its businesses, nefariously, through third parties. given that experience in the years of the private sector helping u.s. companies address competition and malicious activity by chinese entities, the focus of my testimony is the national and economic security considerations involved in china's acquisition of u.s. agriculture and agricultural-related business and supply chains. that said as a baseline and as my witness testimony relays, recent laws implemented by china effectively compel any chinese entity to act at the direction of the chinese state. i.e., the communist party of china. so the question before the committee is really, what do

you as leaders of this country believe the united states should accept regarding ownership and control of the communist party of china over u.s. assets of agricultural land, production, and supply chains? problematically as you know there are serious gaps in current federal laws and reporting that expose our military and critical infrastructure to vulnerabilities and increasingly impact farmers, ranchers, and producers as they face challenges from state- driven chinese actors. the wharton and plan chinese investments like a plant in north dakota and land and farm acquisitions in oregon, texas, nevada close close proximity to one of the spirit u.s. military bases in nuclear facilities is not coincidental. given china's regional and global military intensive vectors that provide intelligence are constantly being sought where they provide locations for cranes, silos, windmills or farms above or

adjacent to military or sensitive facilities or telecommunication towers or underground cables. raising ip violations of usc, gm is another agricultural technologies have placed at risk the nation's continued agricultural technology leadership. there are ample cases of chinese agents having been caught attempting to take such technologies. china's perpetual dependence on agricultural imports ensures their goals for independence from foreign dependencies will remain a priority. further, china's massive cyber warfare division notably pla unit 61398, have the capability to disrupt key american infrastructure critical to our agriculture. this includes power and water utilities, as well as communication and transportation systems. china's global acquisitions and supply-chain monopolies including internet of thing technologies continue to expand unchecked and unaddressed we

have significant dependencies on parts, electronics, and other inputs to our agricultural machinery. the nutritional needs of our livestock is also under significant dependence, as well as inputs to pesticides and herbicides. china is also acquiring companies as export platforms for chinese market, globally and in the united states. such diversion or product can have sizable negative impacts on u.s. producers. further, china's acquisition of global agricultural storage and logistic assets and trading markets should be examined. lastly, given the advances in firm technologies, our reliance on supply chains that provide nefarious chinese actors kill switches to our machinery, our eyes are our production, these are all matters that should be addressed. but there are solutions. federal laws addressing foreign ownership should be considered changes to them.

given the legal vulnerabilities of state to state restrictions. there are adjustments that can be made to the jurisdiction of cfius to better respond to chinese farm and other agricultural acquisitions . as led by this committee the gao has provided solutions for better foreign farm ownership reporting standards and a number of members have pointed to additional solutions and reporting. stronger cyber security vigilance championed by members here is also critical and there are a host of other possible solutions in the face of funding challenges that can ensure our nation remains vigilant on applying solutions to the uninvited, unwarranted, and increasingly sophisticated threats that certain actors present to our nation and food security. that concludes my opening remarks i do look forward to hearing from you and addressing to the best of my ability any questions on matters you wish to raise your >> sir, thank you very much. appreciate your experience. significant experience, and her input. now i am pleased to recognize

ambassador tom. please proceed with five minutes of testimony when you are ready. >> honorable chairman thompson, ranking member scott, and distinguished members of the house committee on agriculture. as a lifelong farmer and a former ambassador to the rome- based u.n. food and agricultural organizations, i would like to share my perspective with you today on the threat of china to america's food supply and agricultural systems. i add the world is watching us today. americans need to understand that our national security is dependent upon our food security americans cannot any longer take agriculture and our food systems for granted. xi jinping and the chinese communist party recognize importance of food in relation to the position of power in the world. the ccp's goal is to reshape the world order through their control of the bri seat neighbors, global trade and the

belts and wrote a nation to attain economic superiority over the united states and our allies. to meet these goals, they are strategically growing their agriculture production domestically and globally at the expense of the united states. i will address a number of these risks by the ccp that we could deal with immediately. first, cybersecurity. threats to the united states agriculture a diverse and can have significant impacts on the industry pick some of the key concerns include intellectual property theft. the chinese have targeted proprietary farming data such as crop yield data, seating or fertilizer algorithms, breeding information, and biotechnology research, which will lead to a loss of competitive advantage for the united states. i have seen this firsthand in the seed production industry. several chinese nationals were sending proprietary seeds in our area from production fields and shipping them back to china. these chinese nationals were caught and convicted, but how

many were not caught? according to the american seed trade association it takes five to 15 years to develop a seed variety and a cost of over $100 million and it estimates the annual value of agriculture see production in the u.s. is over $11 billion annually. data-driven attacks, precision agriculture rely heavily on this data as examples like farms like ours produce over a terabyte of data annually that is exclusive to our farm and is a major driver to our sustainability and productivity. we are extreme risk of the theft or attack of this data, which would alter or disrupt our systems and lead to incorrect farming decisions and likely harm yields. they have been numerous attempts also by the chinese distill this data but fortunately they have been caught and convicted. again, how many were not caught? infrastructure attacks. critical infrastructure from the electrical grid to supply chain logistics and broadband can be targeted and disrupt our

food supply. when we consider ransomware, farming operations could be halted by ransomware attacks demanding payments to restore access to a digital system and we all can remember the ransom attacks on jbs several years ago which disrupted the entire supply chain from livestock production operations to the consumer dinner table. the $11 million ransom was paid, but the cost to jbs and the agriculture supply-chain was many multiples greater. espionage. the chinese are creative in their attempts to steal as much information as possible from as many sources as possible from the usda fsa offices to our industries, to cranes and reports, and from any conduit that flows data or conversations. although the u.s. government is aware of these threats, we need to strengthen protection for america's food supply and economic advantage this includes identifying vulnerabilities and improving the protective measures of

government and private entities against cyber threats. next, portions of our supply chain have been all shored, including several critical building blocks for food systems such as crop protection products and crop nutrients. these are the basic elements that nourish crops, protect them from weeds, insects, and diseases. a recent supply-chain report indicates that 70%, 70% of the crop protection products produced globally, most are from china. another 40% of the worlds phosphorus supply originates in china. imagine if they shut off our supply. without crop protection, products or crop nutrients, yields will decrease requiring substantially more land to maintain current production levels. the economic impact to farmers, consumers and our nation would have devastating consequences

this would lead to higher consumer prices and food insecurity in the united states and around the world. this is a national security threat to the united states and our allies. therefore, the absence of crop protection and crop nutrient products would have a complex and far-reaching impact. the answer is we need to allow for reasonable and durable regulations to prevail to allow the united states to bring this manufacturing capacity back home while supporting those that are already full manufacturing these critical products here at home in the u.s. to feed americans and the world. in summary, whether the impact is from cyber security threats or from minimized access to crop nutrients or crop protection products, the chinese are strategically attempting to build their dominance in the world over food systems. these moves are coming at the expense of american innovation, but are amplified by our burdensome regulatory environment. the people in these chambers on this hill need to take action to bring our supply chains home, protector innovation and

increased funding for research and development. now is the time for a national strategy for agricultural and food systems. if not, america could once again face food insecurity like we did 100 years ago. it is time to stop taking agriculture and our food systems for granted. again, the world is watching. i yield the floor back to you, chairman thompson bixby ambassador, thank you for your record of service and leadership and, your input today in this very important topic. we will now at this time members will recognize for questions in order of seniority alternating between minority and minor verse. i will defer my line of questioning to the very end. each will be recognized for five minutes each to allow us to get as many questions as possible starting with the majority side i now recognize

mr. lucas from oklahoma for five minutes bixby mctague, chairman comps and for calling this hearing and the witnesses for testifying today. during my time in congress i've been engaged in an party to many discussions around the topic of foreign investment in the united states due to my position on the house financial services committee. this is due to the committee jurisdiction over the committee on foreign investment in the united states, or cfius, located within a treasury pick one of the most challenging aspects of this topic is the tension between two widely shared goals of protecting our national security while fostering a welcoming economic environment. congress has attempted to strike that balance during various reforms of the cfius process. most notably 2007 and in 2017. today, i invite you to join me to our panel in that discussion. first to mr. daly and then the rest of the panel. from your viewpoint, what is the correct balance between national security while also allowing the international investment in our economy?

let us cut to the chase. >> well, we have to keep her open investment policy. that's been sustained since president carter through now. one of the greatest strengths we have as a country is the investment we get from abroad. trade is very important, but foreign investment pales it. that said, as you know sir in your oversight capacity, there are serious national security issues that are drawn from foreign investment and chinese actors have been interesting in the way they have found vulnerabilities, not only in our laws and the gaps that proceed from its, but in the capabilities to use nefariously third-party actors to gain entrance and access to places where we have needs in terms of our national security. the great balance, i think, is to continue with her open investment policy, but be incredibly smart and how we

apply our national security apparatus, especially the cfius process. >> either of you other gentlemen's wish to touch on this? be brave. >> thank you, congressman. maybe i would add from a farmer perspective and brower on two different areas. as a brower and a land owner and farming land in north dakota, the concern around foreign investment is real for growers as well. that added investment that outside buyers -- and it's not just china. it's other out-of-state and foreign owners that potentially could drive up the cost of land and the cost of producing for a farmer in north dakota. there is a concern there. and i would say on the input side. there are foreign ownership of research and development facilities when it comes to seed, chemical, and other inputs. research and development facilities that benefit me on the farm when i'm able to use new and improved product.

so in those areas i think there is work to be done, probably. and you are right. it's a tough balance. i don't envy the job that congress has and the administration and finding the right balance but from a grower perspective, two places to look at. >> any thoughts, ambassador? >> certainly. i will share my experiences i've seen globally. in my time serving as ambassador, extensive travel through the middle east and africa and over the years businesses we had in latin america. and i can assure you the chinese are aggressive in their approach and investing in a lot of these developing nations to make sure they can secure a food source. i look in particular at africa. they have nearly 1.1 hectare acres of arable farmland for the united states is around 150 million. i can tell you as a travel across africa we think they are the most essential part that

china is gaming for is the minerals. it's not. longer run it's them as their breadbasket took a look at central american i see the belt line road initiative and how china has invested there. is the same. and that's why we see the growth in brazilian soybeans using into china. the brics nations are forming together and it's through the investment of the chinese party. i want to come back to the united states. i think we need to be careful when they do invest. we need to have eyes on this. i only engaged to please be careful >> mr. chairman i can think of a more important subject than what we are addressing today and i don't have much time left but i would say this in closing i want to thank you, chairman thompson, for your support of my legislation. the agriculture security risk review act signed into law earlier this month this legislation officially adds the secretary of agriculture to the cfius committee. this is the first formal addition of a cabinet secretary to cfius since 2007 and reflects what we all on this

committee know to be true. a country that cannot feed itself cannot defend itself. and with that i want to thank you and are you back the balance of my time. >> the chairman feels back and now recognize for five minutes is the ranking member scott. >> thank you very much, and, chairman, i want to thank you for letting democratic witness go first. we are proud to hear from a farmer on this issue. and such great remarks. thank you for letting my democratic colleague go first. and mr. tom. i want to just agree with you. you said some profound words. you said the world is watching us today on this very strategic national security issue. and i thank you for that statement. and, indeed they are. i have learned so much from so many of my colleagues, but none

more than congressman mcgovern on this whole food issue. he is a national world leader on food security and hunger, and i'm telling you this is a national issue and i hope that if there is one thing that goes from this hearing, it's that we are putting this issue at the front of the list. there are people all over the world watching us. we are the most powerful nation in the world, yet as mr. mcgovern has said over and over, we have beds of hunger. our children, our veterans, people going hungry needing food . and then we have these threats. i'm not putting any sugar coating on it.

i believe there are foreign interests out there who are looking at our nation and trying to find weaknesses wherever they go. and the one area we must not and cannot get weak in is providing the american people with food. and keeping this as our number one trait issue for agriculture and our farmers. and i so appreciate each of you coming forward with this. and chairman, once again, i thank you for putting this hearing together because it's time. now, let me just ask a couple of questions. president gackle, in your testimony you discuss the 2018 and trade war led to brazil, and i mentioned it in my remarks , capturing additional market

share in china and other parts of the world. now, there has been some discussion of imposing a 60% tariff -- trump, presidential candidate has mentioned that -- on chinese products. so, i want to ask you, president gackle. what impact do you think that would have on u.s. soybean production? >> i think -- thank you, ranking member scott. a.s.a. strongly believes that any type of additional terrace from the u.s. would be bad just for agriculture in the u.s., but a lot of other businesses, as well. it would lead to, again, knowing there is a balance and practices in china that need to be addressed. but that type of

step for that level of terror for any level of tariff pick in 2018 the level was 25%, i believe. and we saw almost an immediate drop in the market price for soybeans in particular. close to a two dollar drop in a short time after those tariffs were announced and that the retaliation from china. so if we are learning anything from history and the experience we had in 2018, you can expect something similar or even more detrimental when it comes to a price loss for u.s. farmers and soybean producers. >> thank you. and ambassador tom. you note in your testimony that intellectual property theft is one of the primary threats posed by china. given that china seems unwilling to adhere to wto rules, what in your opinion are some concrete steps that we in congress can take to protect u.s. agriculture technology?

>> certainly. thank you for the question. there's been major steps made throughout the industry. we heard an example earlier today about a potential theft on data systems. farmers use extensively much more dated today, whether it's the constellation of satellites operating their tractors to communicating data algorithms to the computers in the tractor to the seating. these have been compromised. they have been stolen. and it probably continues yet today. i look at the intellectual property on the cedar pickets one of the biggest advantages we've ever had but i know this. the chinese who did not have that intellectual property in the past have it now. so we will see increased competition because of u.s. innovation. we will see increases in yields in china i probably 10% on corn very soon. displacing more u.s. commodity sales probably see some of the

same in soybeans. so, the concrete steps we need to take our far-reaching, much deeper than what we are going today. we need to ask ourselves, what are we considering? we need to bring in the best professionals that understand these data and cyber security threats. because if we don't, they will continue to out emails along the way. but, again, we need to make sure we reinvest in research and development to say ahead of them and make sure we protect those resources. they spend nearly $10.4 billion a year on research. we are only maybe a 10th of that in the public sector. excuse me, yeah, the public sector. we need to make sure we sure of that research and development. if not, we will suffer the economic consequences and potential food insecurity around the world. i can tell you in my time with the world food program working with them, we were feeding nearly 150 million people a day around the world at a cost

upwards of delete two years ago, $14 million. that can't continue. but we know one thing. when people are not food secure, they migrate. they get caught up in human trafficking and worst-case scenario they get caught in terrorist activities. so as i said, food security is our national security. focus on that. >> thank you very much and thank you for that extra minute, chairman. >> appreciate you gentlemen. now please recognize mr. kelly for five minutes of questioning. >> thank you, mr. chairman and i want to recognize i have two young and aspiring farmers or ranchers here today. avery and aubrey moore from laurel, mississippi. and to offer special congratulations to everyone position as vice president of the west jones ffa chapter. it's important we recognize our young and aspiring farmers and so i really just want to thank them for being here and being interested enough in agriculture to sit in this hearing. i echo what you say, ambassador tom.

food security is national security. and the last few years have demonstrated the need for strong domestic supply chains to ensure american farmers have continued access to critical products, such as fertilizer, and pesticides. in addition to serving on this committee, i am a member of the house armed services and the intelligence committee. i promise you i value the security on this, food security is national security as much as they do on the armed services and the intelligence community. as a result, i'm very concerned about the national security implications stemming from our increasing dependence on the people's republic of china for their primary ingredients and some commonly used pesticide. one of the factors driving the dependency on the prc's public policy that encourages the off shoring of these critical tools for agricultural production. for any witnesses on the panel today, do you share my concern about american agriculture reliance upon china for many of our crop protection tools?

are the steps you can take to encourage us to produce these tools here and reduce our dependency on china and other adversarial countries? >> certainly. i would be glad to address that. research shows and usta number show nearly 70% of our critical crop care products come from global resources. most of that from china. these are products that as i said, protect our plants from weeds, insects, and diseases. we have offshore them. we have to ask the question first. why are they offshore? i would say it's because of the excessive regulatory burden we have in the united states. we need reasonable and durable regulatory systems to function to make sure that we can have these plans functioning either here or with one of our friends and allies around the world. you know, it takes time to bring this back.

these critical components were used to produce crops and pewter livestock and take care of our livestock, you're not going to do it overnight. it probably will take you 10 years to bring the capital back here and build the facilities and hire the people to get this done. it's going to take time but we've got to start now. and this is why i say we need a national agriculture strategy to support food security in the united states and our economy. if we can't bring these resources back, we will be very, very vulnerable in the future. >> i want to thank you and i will ask another question. i agree. and we are one of the most giving nations in the world. and i think sometimes people don't understand we don't just beat our nation, we feed the world and we are indiscriminate about not just feeding

ourselves but beating others and some of our competitors are only worried about their populations and no other populations. for any of the witnesses, do you know if there exist a centralized strategy by the chinese communist party to increase u.s. reliance on chinese produced fruits and vegetables and if you do, do you know the extent to which china is subsidizing these ongoing threats to our food supply? >> i have nothing to add on the fruits and vegetables. what i will say that i should have gone further on the discussions of the pesticides for carp crop care products. it's estimated that because of the declining economy in china that they are accelerating their production of crop care products and potentially could be dumping those on the market. obviously subsidizing them. that's one of the risks i see. in terms of fruits and vegetables, i have no knowledge of that. >> thank you, congressman. those are excellent questions. unfortunately, the fruits and vegetable side, i do know that china wants to focus resource and will subsidize it. i will say and add in terms of inputs to our agricultural dependencies, if you look at

some of the vitamins necessary for our livestock whether that be capital a or b or d or e, -- gradually u.s. companies and businesses have seen an advantage but we've seen what that causes in terms of our supply chains and dependencies and vulnerabilities. so as the ambassador related, we need to find ways to take a thorough examination of our supply chain vulnerabilities. determine where we need to address matters, and entities e

supposedly concerned about. so you can't just care about food security when it's politically useful or suits the business interests that you may be behoeden to -- beholden to. it has to be all the time. i just want to add one other thing. based on what congresswoman slotkin said. i want to make another point about foreign farmland ownership. which is getting a lot of attention today.

i'm open and certainly willing to work with my colleagues on limiting investment of foreign governments in u.s. farmland. but we have to be very careful that those prohibitions do not target people in this country based on their national origin or perceived national origin. without objection, i'd like to submit into the record a may, 2023, article in just security titled, with new alien land laws, asian immigrants are once again targeted by real estate bans. so i'll just close by saying, there was a time in our history where we excluded people from landownership based on prejudice and unfounded suspicions of disloyalty. i hope we don't go back to that. again, i thank you all very much for your very informative testimony and thank you, mr. chairman, for your indell generals. >> without objection, we'll enter into that into the record. the gentleman's time has expired. i will remind you, though, that this is about ties to the chinese communist party. we're not -- as i said in my opening statements, this is not targeting individuals of any

ethnic origin. i'm now pleased to recognize the gentleman for five minutes. >> thank you, chairman thompson and ranking member scott, for holding this important hearing today. and thank you to our witnesses for joining us. i want to say thank you. i'm a fourth generation corn and soybean farmer from southern minnesota, raising the fifth. and it makes me very happy to know we have someone like you at the helm of the american soy bone association -- soybean association, leading the efforts, fight fogger our commodities and fighting for our families and the future of our families. nothing's going to make my life more complete than watching my fifth generation take over our farm and that's not for me, that's for grandma and grandpa and great-grandma and grandpa, you're making that happen. thank you. mr. finstad: and this issue is so important to that. i want to talk a little bit about my perspective and

hopefully hear from you. so i understand the importance of the threats that we are faced with here with the chinese communist party. and what it really does to farm country and it is time for us to take this serious. we must work swiftly to move differently and more effectively, getting most of our eggs out of the basket of china. and the best way to describe this, i will just say, i mean, look at what we went through a few years back when we were struggling to find the competer chips -- the computer chips that were needed to start our new f-150's in farm country, our new john deere tractors. and i tell people quite often, i'm like, now think if that was eggs, bacon, turkey. if we were that reliant from a food security standpoint in regards to, quite frankly, folks that might not like us tomorrow. and how really that shows the importance of the american farmer and how we have to continue to protect and fight for our way of life. so with that said, there's a lot

of ways i think that we can maybe unwind this. but mr. ambassador, as you know, the white house's 2023 national cybersecurity strategy and the director of national intelligence annual threat assessment both emphasized that the people's republic of china is the most advanced, active and mr. ambassador, as you know theb white house is 2023 cyber security strategy and the director of national intelligence annual threat assessment both emphasized that the people's republic of china is the most advanced, active, persistent cyber threat to the i united dates. we have an increase in cyber attacks through the food sector highlights a serious threat to our egg economy. as critical infrastructure sector, do believe that food and agriculture sectors adequately prepared for and possesses the ability to respond to a major cyber attack against our key suppliers and the egg industry? >> no, we are not.

i know we have taken major steps to protect us from the private sector perspective. i do appreciate any involvement that the government can be on this. there is an institute that purdue university called the kroc institute that works on a lot of this. we need to make sure we can manage this and hold it close. we are not doing enough yet today. and, i would add this, if we really think we will see less digital agriculture in the future, we are wrong it will accelerate at a rapid rate. >> thank you for that. just in my short tenure running a farm, my father retired when the tractor started driving it. a 15-year-old son plants corn until 3:00 the money because of that technology. od the technology is an amazing event on their farm. it also poses a new threat that we have not dealt with before. along these lines, in january, g introduce the farm and food cyber security act with our

congresswoman directing the secretary of agriculture to conduct a biannual study on cyber threats and vulnerabilities within the agricultural center conducting a christ -- cross-section crisis threat. the threat that china poses to the sector, coordination between federal agencies and sharing timely, actionable information with private industry is more critical now than ever. from your perspective, how well is the government sharing the threat intelligence with the industry? do you believe the usda can plan elevated role to help the agricultural industry prepare for future threats? excellent question. i apologize. thank you congressman for that question. that is an excellent e question. i want to commend you on the legislation that you propose. it is critical. understanding the cyber security threats that are part of the agricultural community and the ability to produce is

entirely needed. my time in government, the intelligence sharing that i saw happen a lot with defense contractors and within the banking community. these were industries that had the benefit of that intelligence sharing. when we look at cyber awareness in the department of agriculture, it is lacking. your bill is necessary to get on the right track. i know the department of agriculture stood up with information sharing division. they are taking measures to improve that intelligence. given china's capabilities and the fbi director, nay, showed how they could shock critical infrastructure, water, power, that affect farmers, ranchers, producers, we need a full assessment your bill goes exceptionally toward that direction. >> thank you, my chair is up.

i of my time. >> please recognize the gentleman from new york for ti five minutes. >> thank you mr. chairman. i appreciate all the witnesses for being here today i represent western new york and the southern tier counties in your city along the pennsylvania line. i am deeply concerned about the unrealistic land proposed by our governor to reduce the economy wide house gas emissions in your 40% by 2030 and a less than 85% by when he 50. this time i'm simply is not be as for many industries and rural new york. what is particularly alarming in this plan is the governor's aggressive push toward electrification in our aggregate altar sector. i believe this could have very serious consequences. as you are aware, diesel fuel plays a crucial role in powering the tractors, combines, and other that are essential to our farmers farming is a round-the-clock endeavor as my colleagues have said requiring farmers to rely

on more heavily electric charging the ignores the operational realities of farming and the inconvenience of having to park equipment for hours and hours on end to charge. with all that said, i raise these concerns because it is a to recognize that china is playing a significant role in the sector, particularly the mineral and batteries i changed, as these are crucial components for all electric vehicle technologies. if we start pushing and all electrification agenda, we are not only hurting the farmers, we are inadvertently contributing to china's influence and control of our entire economy. i see this as a lose lose situation for farmers and all of agriculture, and nationals 30 with that, could you discuss the feasibility and potential impacts of incrementing an aggressive electrification agenda, like the one that new york state is contemplating? how would that impact your members? could you also address,

whether pursuing such an agenda in the u.s. agricultural sector might lead to increased dependence on chinese supply chains? what would that mean to our national security? thank you, congressman. very good congress questions. i will speak from my farmer and grower producer from rural north dakota. there is a time and a place for electrification and electric vehicles. that will probably be more widely adopted on the coast and urban areas. as a farmer and a producer in the middle of north dakota, from the trucking to the tractors, the combines, the real , what we rely on to move product to the market, those types of industries will likely be later adopters when it comes to electrification. what we have to offer in the space is asa, the significant

addition that we provide to the liquid fuels market when it comes to renewable diesel and biofuels. it is another testament of what the u.s. farmer can produce it is an example of how we are diversifying market and domestic demand so we are not so reliant on foreign markets, even while we asked and those. this is just an example of what the american farmers doing to transition in the transportation fleet. the risk of relying on china for infrastructure or the materials for further electric vehicle adoption, like any inpuu , anything we rely on with farmer markets, there is a risk if you cannot produce it domestically. ; to open this up to you as well. we say food security is national security. i am deeply concerned that ne relying on china for these

critical minerals puts us at a significant risk. could you also address whether pursuing electrification agenda in the u.s. might lead to increased dependency on chinese supply chains, thus compromising national security? :thank you, that is an excellent question. currently, we are at a large deficit in this particular technology. especially given battery technology that china effectively dominates right now. we don't get our policy right, it creates a serious dependency that creates a real vulnerability in our agricultural production. that is why we need to focus on it. i know there is a concerted focus on building out america's capabilities in this respect. we have to put the resources to it. >> very good. i know you may have touched on this already, but can you reiterate the national security concerns regarding chinese acquisitions of agricultural and other landholdings near military bases?

>> again, thank you for the excellent question. as is committee is well aware, the transaction happened in north dakota was a serious indication of what china can do in terms of what it wants to do in terms of placement. in my experience in transactions, there have been a number of significant chinese acquisitions where they have gone to acquire land or farmland that is near a military facility like the talk on facilities in a number of transactions occurred in nevada . they were under the label of a goldmine that was meant to observe our nuclear facilities and capabilities, as well as in oregon, the windfarm transaction. the windfarm towers can be used in devices to be put in there to see what we are doing. and the facility they were looking at, would have given site to this, this was a critical facility to the united

days as far as what we are doing in defense of taiwan. they are strategic and smart. they have studied us. they will continue to do so. we need to remain vigilant in terms of where our resources go. >> the gentleman time has expired. i will recognize the gentleman from california for five minutes. >> thank you for holding this hearing. en ranking member scott, i think this is timely for a lot of reasons. members of this committee have gotten use to me saying, is a third-generation farmer from california that food is a national security issue. i get frustrated, along with many colleagues on this committee that too often majority of americans don't look at food being a national security issue, because we do it so well, with less than 4% of the population directly involved. it is important that this committee focus on the danger that china poses to america in

terms of its impact on american agriculture and food put on americans dinnertable every night. let me give you my thoughts and i have a couple questions i would like to ask. i really think that the best strategy for this, because china is an adversary, they are a competitor and they are a vast market. regardless of what administration is in office, they have that challenge. this is an adversary, make no mistake about it. we also compete against one another. i would argue that they don't compete fairly. they don't play by the same rules. they are engaged in the theft of technology and other types of efforts. yet, they are a vast market. how you balance those three factors for any administration is important. the bush administration, followed by the obama administration tried an effort that i thought had merit that

was the transpacific partnership where you engaged other nearby countries to us leverage china. i think it is far better than tariffs. why? everybody has leverage on a tariff war. they just keep upping the ante. if you want to really have an opportunity to deal with this market, if you want the opportunity to deal with the ac factors of competition, and realizing that this is an adversary, i think the ttp was a far better strategy. yes, the market access program is helpful to the american farmers and processors, and it is oversubscribed. i've legislation that would double the funding for that. whether or not i can come to pass with the challenges remains to be seen. let me just ask you for starters, your testimony focus on china and the engagement on agricultural supply chains. the pandemic, we really understood that our supply

chain is in need of assistance. with biotechnology and the plant printing tools, and the ur other potential to have people meeting challenges by reducing greenhouse gases in the agricultural supply chain, what are your thoughts? too often, think china is a bad actor. they are opaque and politically driven in the regulatory system. it limits innovative technologies. and the theft of american technologies. i don't even want to start with artificial intelligence and the problems with algorithms. el playing field? el playing in a purchasing agricultural land, how do you create a fair and level playing field? as in one minute or less. >> thank you, congressman.

>> it is difficult and multifaceted and you have to take it sector by sector and issue by issue in terms of making it a level playing field with china in terms of, we have to be smart in terms of what we address. >> and so you acknowledge it is not a level playing field? >> it is not. china subsidizes where they want to subsidize and they will destroy markets and our production capabilities where they want. >>y do you think that the suppl chain issues, we passed a $1.2 trillion -- in the last we look at supply change, the dairy industry is reliant on those and feed trains coming in but the essence of the food development production added that the invest some of that

infrastructure in our infrastructure? >> i think a number of bills that were passed by congress in terms of bringing up and strengthening the infrastructure are critical. there is a lot we have to do in terms of capabilities. >> i time has expired but i don't know if any of the other witnesses care to comment on how we want to improve our food supply chain and dealing with china. >> the united states is the reason that we are a dominant power and that is because of the natural resources. we have highly productive soil and have 14,800 miles of navigable waterways. more than any other country and we need to leverage those resources to be competitive in the world space. without selling commodities and crops around the world.

crops around the world. infrastructure of look at our dams, locks, ports. they are aging and the infrastructure bill was supposed to make an impact there but if you look at the civil society infrastructure report, we get a d grade. >> currently. but we are trying to rehabilitate a lot of aging infrastructure in the water. i don't know if you care to comment. i time has expired. >> let me just say, the and community, producers, and specifically the asa are ot involved in promoting -- whether it is ports or rivers or dams. another important tool to help i farmers and to make sure that we have the necessary infrastructure to move product efficiently.

and of course, is sustainability. >> thank you mr. chairman. >> we are in the middle of a vote series and three votes have been called about 10 minutes ago so we will go to one more question and then we will recess and we will return immediately after the third vote. so, mr. johnson, you have five e minutes. >> i will start with mr. gackle and i am on the select committee for the chinese communist party led by mr. gallagher., i have a bit of a reputation for talking about soybeans all the time because it is hard to overstate the role of soybeans in this relationship between china and the united states. i am so pleased that you talk

about soybeans, as he said, that is the prime casualty of the 2018 trade war. we know how important diversifying the markets are. i want to be polite to -- but the trade agenda, with regard to new trade deals has been lukewarm. if you were going to look at market access, are there specific buckets that you think are ready to pop? that would reduce the amount of leverage that china has on our nation and over soybean growers? >> questions and i am glad that you ask them. there is a lot of work that we are doing. we are involved in 112 different countries and markets. i mean the u.s. there are other soy partners that we deal with and making those investments and trying to find new and emerging markets, we are working on the wish initiative

for soybean health. it is very important and it partners with --. >> but what markets are ready to do that? >> i think south asia, indonesia, japan, korea. i think, north africa and an europe, there is potential there. there are some regulatory issues with getting more into europe. there are different opportunities in different places. that is long-term and it takes a long term to build the market so in the short term, to reduce the scale is difficult. but we are working on it. >> 60% of south dakota soybeans go to china. replacing the markets, you are not going to replace the market but if you reduce the concentration that does help make sure that we are not

dealing with the power asymmetry. what your thoughts, mr. thompson? >> the southeast asia market is one that we need to look to. we have some real problems with mexico right now and i hope we get those resolved sooner than later. i will say this as well. there is quite a bit of work d going on in africa. we have to diversify our customer base and i think we are on the road to losing more of the marketshare into china and we need to be aware of that. we need to do what we can to retain that trade that we cannot sacrifice our own national security and food security in our own country so we need to stay on top of that. >> ambassador, you are right. and we should be underlining the importance of that.

when we talk about southeast asia and africa we cannot allow unfettered chinese leadership in those areas. people understand the deal with the devil they are making and other chinese deals. they are looking for american , leadership and too often, america is receding into ourselves. public opinion surveys in africa, more respondents will said that they view china as the leader of the world d compared to america and that is a major problem. do you have other thoughts on that topic? >> we put more money into africa than china does and we don't ask anything in return. china will always go in and do something whether the world bank came in and gave a loan to a specific nation. china comes in and creates a death spiral and then they get . resources that the country has

and they take that loan on at a big discount. we have the threat of them continuing to ask for somethinge every time they go to a nation but we ask nothing. >> i wish i had another five minutes but my time is running low. i yield. >> the gentleman yields back. we extend recess to immediately after casting the third vote in the series. c-span is a unfiltered view of the government and we are funded by these television