mr. thompson: thank you for joining us and your leadership. much appreciated. we are going to take a brief break no more than five minutes. recess. allow our first panel ofes to take their seats and we will reconvene basically as soon as witnesses get comfortably seated here and ready to go.

[captions copyright national 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 second panel on this topic today regarding the threats of china to american agriculture. first witness for the second panel is josh, president of the

american soybean second witness is nova brings private and public■f sector experience, numerous agencies, the senate and cfius and third and time witness for this panel is a great committee the former united states ambassador to united nations agencies for food and agriculture. ■"

>> u.s. soy is working in 112 markets to introduce new customers to our high quality, crops. opening new markets is followed by time, attention and maintenance to ensure marketng l critical to the success of u.s. soy farmers but no export destination compares to china. it totalled 32 billion china accounted for $19 billion.

the next largest destination by farmer terms one in three grown in the u.s. is shipped to china to fill demand. during the 2018 trade war, u.s. exports came to a halt andtall e value of u.s. exports to china decreased 76% from012018. it estimated the trade war cost u.s. agriculture over $27 billion. soybeans accounted 71% of these. this has had major consequences for u.s. soybean growers. as>■ a result of the trade war and in the 2017 and 2018meet

marketing year, brazil over took the largest■h producer of soybeans. our farmers are facing competition with brazil. the trade our reputation as a reliable provider of soybeans. section 301 tariffs retall tower have damaged in-country relationships. our customers looked elsewhere to avoid trade risks. united states considers actions to protect our national security interests,ai■ndn and protect our economic and trade interests as well. soybean growers need predictability and certainty that wl retain market access in china. my written testimony provides three policy.

reject legislative attempts to repeal china's normal trade. a.s.a. is concerned that it will severe consequences. u.s. soybean exports to china were the first agricultural the past is pro log that u.s. soybeans would be impacted again. pass a comprehensive farm meets. agriculture. and programs are critical to the loerm success of u.s. soy abroad. funding levels for the market access program have been largely ann though demand for these programs has increased. it should include and insufficient farm safety net. a very simply we need better

tools to help of economic disruption. and number three, exercise congressional ersight authority to press the administration to re-engage in negotiations for bilateral and multi lateral trade u.s. was the leader in establishing trade agreements but the last one entered in 2012 despite thea1 negotiating the partnership. that is 10 years for codified marketon. while at the same time, our international competitors have worked to dpain increased market access. thank you as a from north dakota and on behalf of the soybean. thank you for the opportunity to express this perspective. i look forward to yourestions.

and informed by my service in the u.s. government where i was fortunate to serve along side wn the committee on foreign investment in the united states. i got to witness firsthand for a as it conducted and directed actions to itsses nephariously through third parties. given that experience and helping u.s. companies and the f

my testimony is the national and economic security, considerations involved in agricultural-related businesses and supply chains. as a baseline and as my witness testimony relays, recents implemented by china compel any chinese entity to act at the direction of the chinese i.e. the communist party of china. the question before the committee is really, what do you as leaders of thiun states should accept regarding ownership and control by the communist party of china over u.s. access of agricultural supy chains. problem atically, there are serious gaps in federal laws an[ repoin expose our critical infrastructure to vulnerability and impact farmers ranchers and producers as

face challenges. thwarted and planned chinese like the corn plant in north dakota■ and farm acquisition in oregon and nevada close to military bases is not coincidental. given china's military, vectors that provide intelligence are being sought they provide information to silos adjacent to military or telecommunication towers. g.m.o.'s and other technologies have placed at risk the nation's agricultural leadership. there are ample cases of chinese agents having been caught taking such technologies. imports ensures that their goals for independence from foreign

priority. further, china's passive cyber warfare have the capability to disrupt key american infrastructure critical to our agriculture. this incde and water utilities and communication and transportation systems. china's global acquisition and supply chain m continue to expad unchecked and unaddressed. we have significant dependencies on parts, electronics inputs to our agricultural machinery. our livestock is under significant independence d herb. china is requiring companies as export platforms globally and in the unitedch diversion of produn have negative impacts on u.s. producers. further,hi of

agricultural storage and trading markets should be examined. lastly, given the advances techn supply that provide kill switches to ourr eyes is all matters that should be addressed. but there are solutions. federal laws addss foreign ownership should be considered given the legal vulnerabilities. there are justice to better respond to farm and other agricultural acquisitions. the g.a.o. has provided solutiop reporting standards and a number of members have pointed to additional solutions and reporting. ,crong cybersecurity vigilance championed by members here are critical and there are other solutions that can ensure our

nation remains vigilant on applying solutions to the uninyou vieted andnwarranted and sophisticated threats that certain actors. that concludes my remarks. mr. thompson: thank you very much. appreciate■@ your experience and your input. now i am pleased to recognize w. >> honorable chairman thompson, ranking member scott and distinhemb agriculture, as a lifelong farmer and ambassador to the u.n. food and agricultury percent perfect thief on the threat of china to america's food supply and agricultural systems.s watching us

today. americans need to understand there are national security is dependent upon our food security. cannot take agriculture and our food systems for granted. president xi recognize the power of food in the world. c.c.p.'s goal is to reshape■

intellectual property theft. the chinese have gone after crop yield data and biotechnology research which will lead to a competitive advantage. i have seenhis firsthand in the seat production. they were sending 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 trade association, it takes 5-15 to establish a seed variety. andhe annual production is over $11 billion annually. data driven attacks rely data ls produce data that is exclusive to our farm

our sustainability and productivity. we are at extreme risk for attack that could■ alter or disrupt and lead to incorrect farming decisions and likely harm yields. been attempts and caught and convicted again, how many were not caught. infrastructurettture from electl grid could be targeted in disrupting our food supply. en we consider ransomware, it could be halted demanding payments to restore payments and we all can the ran some attacks on j.b.s. which table.ed the supply chain to $11 million was paid but the cost and the agricultural supply was greater.

espionage. the chinese are going to steal from u.s. offices to our industries, to cranes and ports and any conduit. while the u.s. government is aware of these threats, we need to strengthen protection for america's food supply. this includes identifying vulnerabilities than prime minister proving measures of government against cyberthreats. of our supply chain have been offshored and building blocks for our food systems and crop production products. these are the basic elements that nourish crops, proangt from weeds, insects and diseases. a supply chain report indicates 70% of the crop protection that are plews produ most from china.

another 40% of the world's toes ferous supply originates in china. imagine if they shut off our supply. crop nutrients, yields will decr and requiring more land. the economic impact of farmers, consumers and our nation would have devastating consequences and lead to higher consumer prices and food ins threat to the united states and our alwries. the absence of crop protection have an impact. we need to allow for reasonable and durable regulations to prevail to allowstates to bringy back home while supporting those that are manufacturing these critical products here at homeud

the world. in summary, whether it is from cybersecurity threats or from minimized from crop nutrients, the chinese are attempting to build their dominance. these moves■:úe are cominat the expense of american innovation but amplified by our burdens the people on this hill need to bring our supply chains home increase our funding for research time for national strategy. if not, america could face f■mrs ago and time to stop agriculture and food systems for granted. again the world is watching. i yield the floor back to you, chairman thompson. mr. thompson: thank you for thit

topic. and members will be recognized for questions in order of seniority and those who joined after the hearing convened and defer the very end. each member will be recognized for five minutes each to get starting with the side. i recognize mr. lucas from oklahoma. mr. lucas: thank you to the during my time in congress, i have been engaged and partied discussions around foreign invements ofhe united states due to my position on the house financial services committee due to the committee's jurisdiction over foreign that is located within treasury. one of the most challenging aspects is the tension of two■l widely shared goals of

protecting our national security while fostering an economic environmt. congress has struck reforms. most notably, 2007 and in 2017. today i invite you to join me to our panel friends in that your s the correct balance between national security while allowing the national investmentn our economy, let's cut straight to the chase. >> well, we have to keep our that has been sustained since president carter on through now. one of the greatest strengths we have is the investment we get a. trade is very important. that said, as you know, sir,■: oversight capacity there are

serious national security issues that are drawn and chinese actors have been interesting in the way that ey found vulnerability not only in our laws and the gaps and their capabilities to use nephariously third party actors and gain access to places where we have the needs in terms of our national security. the great balance to continue with our open investment policy, but incre how we go through the cfius process. mr. lucas: do any of theh on this? oh, be brave. >> from a grower, two different areas, as a grower and land owner and farming land in north dakota, the concern around foreign investment is concerned

as well. and it's not just china. it's other out of ate owners the up the price of land. there is a concern there and ij, there are foreign ownership of research and development facilities when it comes to seed, chemical and other inputs, research and development that benefit me on the farm. two areas there is work to be done and you are right. it's a tough balance, i job thas but from a growers' perspective, two places to look at. mr. lucas: any thoughts, ambassador? >> my time serving the middle ea

and latin america, the chinese ■ approach in investing in these developing nations. i look in particular at africa, nearly 1.1 billion hectors. the united states is around we think they are the most essential part that china is gaining for, is t not. i see the belts and roads initiative. and we see the■i% growth in soybeans moving into china. the nations are forming up together and through the investment of the party. when i come back to the united states we have to be extremely careful where they do invest. we need to this. i gauge you to please be

careful. mr. lucas: i can't think about a more important subject to address today and i want to thank you, chairman thompson for your support of my legislation agri■ncultural risker review act that was signed into law earlier this month. it adds the secretary of agriculture to the cfiusmmittee. this was the first formal addition of a cabinet secretary to cfius and reflects what we all know to be true, a country cannot feed itself cannot defend itself. i thank you. and i yield■q back. mr. thompson: i am pleased to recognize ranking member scott. thank you for letting democratic witness go first. we are p farmer on this issue.

and thank you letting my democratic colleague go first. and i want to rm -- you said the world is watching us today on this very issue. and i thank you for that statement. and indeed they are. i have learned so much from so ny colleagues but none more than congressman mcgovern on this whole food issue. he's a national world leader on food security and hunger. and i'm telling you, national issue. and i hope if there's one thing that goes from this hearing, it'shat we are putting this

issue at the front of the list. there are people a the world are watching us with the most powerful nation in the world, yet as over and over, wes of hunger. our children, oureterans, people going hungry needing food. and then we have these threats. i am not pting any sugar coating on it. i believe there are foreign interests out there who are looking at our nation and tryinr they're going. and the one area we must not and cannot get weak in is providing the american people with food and keeping this as■y our number one trade issue for agriculture

and our farmers. and i so appreciate eachgñ■bf coming forward with this. and chairman, once again, i just thank you for putting this hearing because it's time -- now, let me just ask a couple of questions here, in your testimony, you discuss that the 2018 trade war led to brazil and i mentioned it in my 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 professor, what impact do you think that would have on u.s. soybean

production? >> i thank you, ranking member scott. a.s.a. believers any type of additional tariffs in the u.s. be bad enough in agriculture and a lot of other businesses as well. it is -- know there is balance and practices in china that need to be addressed but that type of tariff in01 25%. if that number is right. and i mean we saw an immediate drop, close to a $2 drop short time after those tariffs were"ç> retaliation from china. if we are learning from history and experience we had in comes to is farmers and soybean

producers. mr. scott: you note that intellectual property theft is one of the primary threats posed by china giving that china seems unwilling to adhere to w.t.o. rules. what in your opinion concrete steps that we in congress can take to protect u.s. agriculture >> thank you for that question. there have been major steps. we heard of the example of potential theft on data systems. they use more data whether con sphelings satellites to rhythms to the seeding, they

have been compromised and stolen. and intellectual property. biggest advantages they have ever had. the chinese have that intellectual property in the past have it now. we will see increased competition because of u.s. innovation and increases in china of 10% on corn displacing commodity sales and probably the same in soybeans. the concrete steps we need are deeper. we need to be asking today. we need to bring in the best professionals that and cybersecy threats. if we don't, they will outcame need to invest in research and development and protect those resources.

they spendlú>■ billion a year in research. we are a tenth of that in the public sector and make s and development. if not, we will suffer the economic consequences and potential food securitarwith thd program working with them we were feeding 150 million people around■/ world. that can't continue. but we know one thing, when people are they migrate and they get caught up in terrorist activities. as i said, food security is our national security. we need to focus on that. mr. scott: thank you for that. mr. thompson: now i am pleased to recognize mr. kelly for five

minutes of young and aspiring farmers and i a special f.f.a. we recognize our farmers and being interested enough to sit in this hearing. i you say. food security is national security. and the last few years have demonstrated t n domestic supply chains to ensure american farmers have access to critical products such asfertil. i'm a member of the house armed services and intelligence committee. i promise you i value the security on this. food security is national security as much as i do on the

armed services and intelge am ce national security on our increasing depends on china ole commonly used pesticides. one of the driving factors is policy that encouragees offshoring of agricultural production. you share my concern about american agriculture china. are there steps we can take to encourage to produce the tools re and reduce our dependency on china and other add veer ceryl countries? >> i be glad to address that. 70% of our critical crop care products come froms. most of that most of that from china.

these are products that protect our plants from weeds,nsects and diseases. we have to ask our question first, why are they say it's pwe successive regulatory burdens we have here in the united states. we need reasonable and double regulatory systems to fution■ to make sure that we can have these plants functioning either here or with one of our friends and allies around the world. mr. tom: it takes time to bring this back. these critical components that we use to produce crops and feed our livestock and take care of our livestocku' it overnight. it will probably 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. butis 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'll be vulnerable in the futur want tok another question but i agree. when we're one of the most giving nations in the world, and i think sometimes people don't understand, we don't just feed r ti world, and we're indiscriminant about not just feeding ourselves but feeding others and some of our competitors are only worried about their populatis d no other populations. for any of the witnesses, do you know if there exists a centralized strategy by the chinese communist party to increase u.s. reliance chinese-produced fruits and srepblg tabls and -- vegetables and if you do, do you know the ex don't which china is subsidizing these ongoing reatto oaur fd supply? >> i have nothing to add on the fruits and vegetables. what i will say is this. i should have went further on the discussion on the pesticides and the crop care products. right now it's estimated that because of the declining china,e accelerating their production of crop care products and potentially could be dumping

those on the market. obviouslyrisks that i see. in terms of fruits and vegetables, i have no knowledge of that. >> thank you, congressman. those are excellent questions. the fruits and vegetable side, i do know will subsidize it. i will say, i'll add in terms of inputs to our agricultural dependencies, if you look at some of necessary for our livestock, whether that be a or d or e, i mean, we have dependency on china 70% to 90%. and that sourcing just happened over time. mr. daly: gradually u.s. seen an advantage of cross-wise to move there. but we've seen what that costs in terms of our supply chains and vulnerabilities. as the ambassador relayed, we need to find ways to take a

thorough examination of our supply chain vulnerabilities, determine where we need to address matters and prioritize them. and then find the resources to obviously funding is always difficult. but there are ways to do things without having the funding to make sure you prioritize, you rd agriculture, what f.b.i. is doing in terms of focusing on ag and -- versus other portions. so i think just creating that real thorough analysis and i know the u.s. department of ag and you all are doing that oversight the. to get them focused on those vulnerabilities, especially where it concerns our food supply. mr. kelly: i thank our witnesses. my time is expired and i yield back. now pleased to recognize my friend from massachusetts, mr. mcgovern. mr. mcgovern: thank you very much, mr. chairman. i want to thank our witnesses, thank you for your excellent testimony. important to talk about how important food security is to national security.

you know, there's a lot of attention in this congress given to china and legitimately so. the security threats, the issue on our food security, a whole range of things. but sometimes i wonder how serious we are about really an, last week we did a bill to ban tiktok, we're concerned about the privacy of our data. but we did nothing to address the security of our data on all these other social media platforms, which china could use a data get that same information. and when we talk about -- even on today's topic, i want to reag something that's meaningful. that will protect our land and protect our food supply. i was a co-chair of the tom lantos human rights commission for many years and for four years i was the chair of the congressional executive

commission on china and i'v authored the uyghur forced labor prevention act, the tibetan policy and support act. i know what it means to act when we have serious disagre■enhines. both those bills became law. and i also recognize at the same time that we have a trade relationship with■p china. and that is important. and we want to make clear that we're not -- we don't want to seek a wider conflict. so ile bit of a leg to stand on when i question kind of the seriousness of much of what we do here.

and smithfield w controls about 1/4, 1/4 of all u.s. hog production and it exports a significant quantity of pork tightening our domestic supply. and i think it's appropriate for this committee to carefully consider what impact that has on security. which is why it astounds me that we have some of my friends on the other side, you know, led by some on this committee who talk tough on china, are carrying the water for smithfield. many people listening may be familiar with california's proposition 12 which is a farm, animal welfare law that outlaws the most iumof pigs in california. 2022 polling showed that 80% of u.s. voters favor a law like proposition 12 in their state. i'm from massachusetts.in massaa similar law known as question three. now, pork producers led by

smithfield■ new standards and went to the supreme court last year. and they lost and they lost. so now they've come to congress ourn the and massachusetts and dozens of other states that have followed suit. we have this bill called the he's ahi-- eats act which is the latest act to overturn states' rights to set their own animal cruelty standards and now just last week i heard our tell a news outlet that he wants to -- he wants a fix to proposition 12 on the farm bill. we just heard the governor of south dakota talk about states' ri■its and how in south dakota she wants a state plan. nobody objected to so if nobody's objecting to a state's process, why would you object to a state putting controls animal cruelty? and again, really at the insistence of this chinese-owned company.

d i just -- to my colleagues, i think it is kind of hypocritical to talk tough about -- when it comes to the influence of the chinese government, and our food system, while actively helping entitiese supposedly concerned about. so you can't just care about food security when it's politically useful or suij!&ts e 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 what congresswoman slotkin said. i want to make another point about foreign farmland ownership. which is getting a lot of attention 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 th 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, asia 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 peoplem on pre 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 chinese communist party. we're not -- as i said in my opening statements, this is not targeting individuals of any et 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 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 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.d: and this issue is so important to that. i want to talk a little bit about my perspective and so i understand the importance of the threats that we are faced with here with the chinese communist party. and whatt farm country and it is time for us to take this serious. we must work swiftly to move erently 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, ihrough a few years back when we were struggling to find the competer chips -- the computer chips that were needed to start o 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.re that rela food security standpoint in regards to, quite frankly, folks that might not like us tomorrow. 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 ways i th■ink that we can maybe unwind this. but mr. ambassador, as you know, the white house's 2023 national director of national intelligence annual threat assessment both emphasized that the people's republic of china is the most advanced,

persistent cyberthreat to the united states. specifically, an increase in cyberattacks targeting the american agriculture and food sector highligs threat to our ag economy. as critical infrastructure sector, do you believe that food and agriculture sectors adequately=é prepared for■bssesd to a major cyberattack against our key suppliers in the ag industry? >> no, we are not. i know we've taken major steps to protect this from a private sector perspective, i appreciate any involvement that the government can i know there's an institute at purdue university called the crk on a lot of this. but we're not doing enough yet today. mr. tom: and i add this. if we really think that less dil agriculture in the future, we're wrong. it's going to continue to accelerate at a very rapid rate.

just in my short tenure running the farm, my father retired when the tractor start dng my 15-year-old son plants corn until 3:00 in the morning because of that technology. that technology is an amazing advancement in it's also -- poses a potential new threat that we haven't dealt with before. along these lines, in january i introduced the farm fo with congresswoman slotkin which would direct the secretary of agriculture to conduct a biannual study on cyberthreats and vulnerabilities within t ag and food sector and conduct an annual cross-sector crisis simulation exercise. due to the wide ranging national and economic security threat that china poses to the sector, coordination between federal agencies and sharing timely, with private industry is more critical now than ever. from your perspective, how well is the government sharing threats intelligence with the

industry and do you believe the usda can play an elevated role in helping the ag industry prepare for future threats? [indiscernible] mr. daly: apologize. thank you,éuongrsm it's an excellent question. i want to commend you on the legislation you proposed. it's critical. understanding the cybersecurityr agricultural community, our ability to produce is entirely e intelligence sharing that i saw happened a lot with defense contractors and also within the banking community. so they were industries that sort of had the benefit of that intelligence sharing. but if you look in terms of that intelligence sharing, that cyberawareness in terms of thing consultal community and with the department of agriculture, it's been lacking. and extremely

necessary to get it on the right track. i know the department of ag just stood up an information sharing division andhe improve that intelligence. but given china's capabilities and f.b.i. director ray relayed this in s of their ability to shut off our critical infrastructure, water, power, that affect our farmers and ranchers and producers, we need a full so your bill goes exceptionally toward that direction. mr. finstad: thank you. my time is up. i yield back.■the gentleman yields back. pleased to recognize the gentleman from new york, mr. langworthy, for five minutes.ngworthy: thank you. i represent western new york and the southern tier counties of new york state along the pennsylvania line and i'm deeply unrealistic plan proposed by our governor to reduce economy-wide greenhouse gas emissions in new york by 40% by than 85% by

2050. this timeline simply isn't feasible for many industries in rural upstate new york but what's particularly alarming in this plan is our governor's aggressive push toward electrification in our agricultur■o sector, an agenda that i believe could have very serious consequences. diesel fuel plays a÷$ crucial role. farm something a round the clock endeavor, as my colleagues have said, and requiring our farmers to rely on more heavily electric charging vehicles ignores the operational realities of farming and the inconvenience of having to park eipment for hours and hours on end to charge. and with all that said, i raise these concerns because it's important to recognesignificant. particularly the mineral and battery supply chains, as these are crucial components for all e.v. technology.

all-electricfication agenda at the state and federal levels, we are not only hurting our farmers, we're also inadvertently contributing china's influence and control of our entire economy. i see this as a lose-lose sent air for our farmers, for a ocend our national security. with that, mr. green bay packerle, could you -- mr. gackle, could you discuss electrification agenda like the one new york state is contemplating? how that would impact your members and additionally, couldr pursuing such an agenda in the u.s. ag sector might lead to increased dependency on chinese know, what that would mean to our national security? >> thank you, congressman. very good questions and points. i'll and producer and grower perspective in rural north dakota. there's a time and a place for

electrification and electricking vehicles and that's going -- electric vehicles and that's going to be more widely adopted on the coast.mer and producer in the middle of north dakota, from the trucking to the tractors, the combines, rail, what we rely on to move product from our farms to our elevators to our markets, those types of industries i think will probably be lateren it comes to electrification. and what we're -- so what we have to offer in that space is american -- as farrs, as a afrpt, you know, the significant addition that we provide to the that's another testament of what the u.s. farmer can produce. it's an example of where we're trying to diversify markets and so reliant on foreign markets, even while we try to expand those. but again, just an example there of what the american farmer is doing to transition this time

period in a transportation fleet. relying on china, like anythin e's additional risk there if you're not able to produce it domestically. mr. langworthy: thank you. we often hear that food security is national security. and i'm deeply concerned that continuing to rely on china for these critical minerals puts us at a significantip risk. could you also address whether pursuing an electrification agenda in the u.s. ag sector might lead to increased dependency onhiupply chains, thus compromising national security? mr. daly: thank you, congressman. that's an excellent question. currently we're in a lar deficit, in this particular technology. especially given battery technology that china effectively dominates right we y

right, it creates a serious dependency that creates a real vulnerability in our agricultural production. that's why we need to focus on it and i know there's a concerted focus on building out america's ca in this respect. but we just have to put the resources to it. mr. langworthy: very good. i know you may have touched on this b of the national security concerns regarding chinese acquisitions of agricultural and other land holdings near our military bases? mr. daly: sure, absolutely. excellent question. as this committee's well aware, the fufang transaction that 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's been a number of significant chinese acquisitions where they've gone to acquire that's near a military facility,

"top gun" facilities, a number of transactions happened in re under the label of gold mine that actually was meant to observe or nuclear facilities and capabilities. as well a transaction involving a wind farm. wind farm towers can be used -- devices can bt nd the facility they were looking at, that was a critical facility to united states in terms of what we were doing in defense taiwan. so they're strategic, they're smart, they've studied us and they'll continue to do so. to rn terms of where our resources go. mr. langworthy: thank you very much. i yield back. mr. thompson: the gentleman's time has exp■ired. i recognize the gentleman from california for five minutes. mr. costa: thank you.

members of this committee have gotten used to me saying as a third farmer from california that food is a national security issue. i get frustrated, i think along with many of my colleagueon the majority of americans don't look at food being a national security issue because we do it so well. with less than 4%opulation direy involved. bureau it is. and i think -- but it is. and i think it's important that this committee focus on the america in terms of its impact on american agriculture and therefore food put on america's dinner table every night.ust kiy thoughts and then i have a couple of questions i want to ask. i really think that the best strategyecause china is an adversary, they are a competitor and they are a vast market. so regardless of what administration is in office, they have that challenge.

this is an adversary. let's make no mistake about it. number two, we compete against one another.i would argue they e fairly. they don't play by the same rules under the w.t. ofrpt and their -- w.t. ofrpt and they're engaged -- w.t.o. and they're engaged in the theft of technology and other types of efforts. but yet they are a vast market. so how do you balance those three factors for any administration? the bush administration and then followed by the obama administration tried an effort that i thought had merit. that trans-pacific partnership where you engaged other nearby countries to electric raj china -- leverage china. i thi■senk that's far better thn tariffs war that ultimately the last president got engaged in. and why? everybody has leverage on a tariff war, they jus keep upk the ante. if you want to really have an opportunity to deal with this market, if you want to have an opportunity to deal with the factors of competition and realizing that this is an

adversary, i think the t.t.p. was a far better strategy. markm is helpful to our american farmers and processors and it's oversubscribed and i have leation that wou dou twhrao can come to pass with -- whether or not that can come to pass with our challenges with the farm bill remains to be seen. so let me ask for starters, your testimony focused on china and their agricultural supply chain. the pandemic i think we really understood that our need of asst every level, especially in agriculture. with biotechnology and pla■rnt to help producers meet challenges by reducing greenhouse gases and emissions and foster resilience inlimate change in the agriculture supply chain, what's your thoughts? i mean, because too often i think chinas a bad actor -- china's b opaque, their politically driven and it limits

innovative technologies and and i don't even want to start with artificial intelligence and problems with algorithms. purchg land, and we heard testimony in the earlier hearing, how do you create field? in a minute or less. mr. daly: s, sir. thank you, congressman. mr. costa: we have a time problem. mr. daly: it's difficult and it's multifaceted and you have to take it sector by sector, issue byl playing -- in terms of making it a level playing field with china. in terms of -- we got to, a, be smart we address in china. mr. costa: you have knowledge it's not a level playing field. mr. daly: it is not, absolutely. the chinese are state-driven economy, they subsidize where they want to subsidize and they

will destroy markets and u.s. production capabilities where they want.ph-t supply chain issues and for the rest of you, you know, we passed the bipartisan $1.2 trillion investment in infrastructure in thast congre. and i think when we look at our ports and harbors and we look at our supply chains, california's dairy industry is very dependenn every week to california, but there are whole estimates of the supply chain and food development productit some of that infrastructure in that -- our infrastructure. mr. daly: yeah. number of billst were passed by congress in terms of bringing up and strengthening our infrastructure, absolutely critical.terms of our capabilit. mr. costa: my time's expired but i don't know if any of these other witnesses care to comment about how we use to improve our food supply chain and dealing

with the competition of china. mr. gackle: i think it's clear the united states is the reason we're a dominant power in food systems, because of our natural resources. we've got a largetion of highly productive soils. we have 14,800 miles of navigable waterways. much more than any other nation, germany or china. and we need to leverage those resources to be competitive in a world space. on selling our commoditiescrops. mr. tom: when i look at that infrastructure, though, i look at our dams, our locks, our ports, they're aging and i know the infstke an impact there. but if you look at the civil society engineers association, they come out with reports that we really get a d rating on our infrastructure. mr. costa: currently but we just provided funding. we're not ambitiously trying to do just what you say. we're doing it in california, e rehabilitating a lot of aging infrastructure in water.

i don't know if you care to comment. my time's expired. mr. gackle: just quickly to say, the ag community, producers and specifically a. s-frpt a. are -- a.s. afrpt are actively -- a.s. afrpt are actively involved in investing in infrastructure. the water resources development act that congress re-authorizes, another important tool to help farmers and to make sure we have the necessary infrastructure to move our product and move it efficiently and sustainably. mr. costa: thank you, mr. chairman. mr. thompson: the gentleman's ae series, three votes have been called about 10 minutes ago. so we're going to go to one more question and then we're going to recess and we will be returning immediately after the third vote. i'm pleased to recognize the gentleman from south dakota, mr. sen. johnson: thank you, mr. chairman -- mr. johnson: thank you, mr. chairman.

i'll start with mr. gackle and note i'm on select committee on the chinese communist party, that it's led by mr. krishnamoorthi and mr. gallagher who we heard from earlier. and i've gotten a little bit of a that committee for talking about soybean all the time because it is really hard to overstate the role of soybeans in this relationship between china and the united states. and that's why i was so pleased that you talked about soybeans, i prime casualty of the 2018 trade war. in that environment, we know how important diversifying our markets e.ç.■t i want to be plight to ambassador -- polite to the ambassador because she's brilliant and hardworking. i the trade agenda has been pretty lukewarm for this administration. if you all were going to look at market access, are there think are ready to pop and that would reduce the amount of hrefbgers

that china has over -- levers that china has over our grower? >> thank you, congressman. very good questions and i'm glad you asked them because there's a lot of work that we are tkphog n that area. it's important to remember, we are involved in 112 different countries and markets. when i say we, it's a.s.a. making those investments, trying to find new and emerging markets. mr. gackle: we have a program within the american soybehe word initiative for soy and human health. it's a very important program. and it partners with farmer inst dollars. mr. johnson: but what markets are ready to take that next leap? mr. gackle: i think south asia, indonesia, japan, korea. places. north africa and europe, there's some potential there. there's some regulatory issues with getting more into europe but they're a big buyer. mexico is a big buyer. so there are opportunities in different places.

and that's long-term. takes a la market. so in the short-term, to replace the scale of china, just redifficult. but -- just very dficult. are w- mr. johnson: 06% of -- 60% of south dakota soybeans go to asia. replacing th we're all in on the joke, you're not going to replace that market. but if y reduce the concentration, it makes sure we're not at such a power asymmetry.n terms of new markets, i agree, the southeast asia market is a market we need to look to. we need to look at some of the places in the northern part of south americand a good trading partner. we have some real problems with mexico right now. i hope we get those resolved sooner than later. and i'll say this as well. there's quite a bit of work going on in africa. i agree, we have to diversify

our keft measure base -- customer base. idy on the road to losing more of our market share into china. we have to be aware of that. we need to do what we can to retain that trade but we■h■9t sacrifice our own national security and our food security in our own country. so we have to make sure we stay on top of that. you're exactly right. we should all be underlying the importance of american soft power. when we talk about the global south, when we talk about southeast asia and africa, we cannot allow unfettered chinese leadership in those areas. people, they uereal with the del they are making on chinese deals. they are looking for american leadership and unfortunately often america is receding back into ourselves a little bit. i'm sure you've seen the same numbers i have. in public opinionn africa, more respondents will say they view china as the leader of the world than

america. that major problem. i interrupted, other thoughts on that topic? mr. tom: in terms of africa. we mutt re money and we don't ak anything in return. china will always go in and do something, whether the world bank came in and gave a loan to a certain particular nation, they default on that loan, china comes in and creates a tkefbg spiral on it. then they end up getting that the country has, taking on the loan at a very big discount. we have a threat of them contuihey go to a nation. we ask for nothing. mr. johnson: thank you very much. i wish i had another five minutes but my time is running low, mr. chairman. would yield. mr. thompson: the gentleman yields back. the committee stands in recess to immediately -- until immediately after casting [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2024]