To depart and the 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 agriculture. First witness for the the committee will come to order. I am pleased to welcome our second panel. Our first witness for the second panel of our hearing today is the president of the soybean association. And mr. Daily that brings private sector experience, numerous agencies, the senate and committee all involved on National Security matters. The third and final witness for this panel is a great friend of the committee and of the industry ambassador. The former United States ambassador of the United Nations agency for food and agriculture. Thank you to our witnesses for joining us today. You each have five minutes. The timer in front of you will countdown to 0 at which time, at which time your time has expired. That will be followed by a question and answer period after all three of you have spoken. So, wherever you are ready. Please begin thank you, chairman thompson and rank and member scott and members of the house and committee. Thank you for allowing me to testify today. I am a soy bean farmer where i farm with my dad and brother on a Third Generation farm. This year i serve as president of the american soy bean association. Represents soy bean farmers across the United States. It is the largest export and trade is priority for our farmers. U. S. Soy is working in 112 markets across the world to introduce new customers to our high quality, high protein crop. Opening new markets is one step followed by time, attention and longterm relationship maintenance to ensure Market Access. Our trading partners are all critical to the success of u. S. Soy farmers. No expert destination compares to china. In the last marketing year the total 32 billion trade. China a counted for 19 billion for this total the next largest by value total dollars 3 3 billion. One out of three groves grown in the u. S. Is shipped to china to fill demand. During the 2018 trade war u. S. Soy bean export came to a halt due to tariffs. The usda found the value to exports to china decreased 76 from 2017 to 2018. It estimated the trade or cost to agriculture over 27 billion. Soybeans accounted for 71 of the losses. This has had major consequences on Competitive Landscape for growers, as a result of the trade war, brazil ramped up production to meet chinese demand. Beyond capturing china brazil increased the agriculture production. In the 20172018 marketing year brazil overtook the United States as the Worlds Largest producer of soy beans. We face competition with brazil in every export market. Not just china. It damaged our reputation as reliably for the market the tariffs and the retaliation trade actions jeopardized our place in this markets and damaged incountry relationships developed over decades. At times our customers looked elsewhere for needs to avoid trade risks or duties. As the United States considering actions to protect our security interests we need to maintain and protect our economic trade interests as well. Soy bean growers need certainty that we will maintain Market Access in china. My written testimony has three policy recommendations, number one, reject legislative attempts to repeal permanent normal trade status. Asa is concerned that revoking pntr will severe consequences, soy bean exports were the First Agricultural commed comodity impacted. Pass a farm bill that meets the plead of u. S. Agriculture t. Should have invest ment in trade promotion that are critical to the longterm success of soy abroad. Funding levels and the foreign Market Program largely unchanged for decades even though demand for the programs increased. The new farm bill should include improvements to the farm safety net. During the trade war we experienced firsthand the insufficient farm safety net under the farm bill. We need better tools to help farmers in times of economic disruption and greater out reach. And renegotiate for bilateral and multilateral trade agreements. The u. S. Was once a leader in free trade agreements but the last one entered in 2012. Despite the u. S. Negotiating the transpartnership. That is 10 years of inactivity for expansion that could of helped u. S. Agriculture. While at the same time our International Competitors worked to gain increase Market Access. So thank you again as a farmer from north dakota and on behalf of the soy bean association, it was a privilege to be with you and thank you for the opportunity to share the perspective of soy bean growers thank you for your leadership and your testimony today. Now pleased to recognize mr. You. Thank you for the opportunity to appear before you today to discuss this timely matter. I am honored and humbled to be before you and the panel you assembled. The views that i share are of my own. I was fortunate enough to serve along colleagues with security council, counsel, senate and treasure. I got to witness firsthand china and their experiences. Given the years in private sector helping u. S. Companies, the focus of my testimony is the national and Economic Security considerations involved in chinese accusations of u. S. Agriculture and agriculturalrelated business and supply chains. That said as a baseline and my witness testimony relays, recent laws implemented by china effectively compel any chinese entity to act at the direction of the chinese state. Ie, the communist party of china. So the question before the committee is, really, what do as leaders of the country believe the United States should accept of control over land and supply chains. There are serious gaps in federal laws and reporting that expose our military and Critical Infrastructure to vulnerabilities as they face challenges. Land and farm acquisitions in oregon, texas, in close proximity of the spirit military basis and nuclear conspiracies is not coincidental. They provide intelligence and they are constantly being sought where they provide locations for cranes, silos, windmills, near military or sensitive materials or telecommunication towers our under ground cables. Raising violations of cmg and other technologies have placed at risk the nations continued agricultural leadership. There are ample cases of chinese agents being caught taking such technologies. Chinas dependents ensures their goals will remain a priority. Chinas cyberwarfare, pla unit 61398 have the capability to disrupt key american infrastructure, critical to our agriculture. Including power and Water Utilities and communication and transportation systems. Chinas global acquisition in supply chain monopolies continue to go unchecked and unaddressed. We have significant dependencies on parts, electrics, other inputs to our Agricultural Machinery the nutritional needs of our livestock is under dependence and inputs to pesticides and herbacides and china has companies for platforms for chinese market. Globally and in the United States. So, diversion of product, sizeable negative impacts on u. S. Producers. Further, chinas acquisition of Global Agriculture storage and logistic aspects should be examined. Lastly, given the advances of farm technologies, our reliance on supply explain that provide kill switches to our machinery, our eyes, our productions, all matters that need to be addressed. There are solutions. Federal laws addressing Foreign Ownership should be considered. Changes to them. Given the vulnerabilities of state to state restrictions. There are adjustments to be made to better respond to chinese farm and other agricultural acquisitions. As led by the committee the gao has better farm ownership standards and a number of members pointed to Additional Solutions in reporting. Stronger cybersecurity vigilance, championed by members here is critical. There are hosts of other possible solutions in the face of funding challenges to make sure our nation remains vigilant on the uninvited, unwarranted and sophisticated threats that certain actors present to our nation and Food Security. That concludes my opening remarks and i look forward to hearing from you and addressing to the best of my ability questions you wish to raise sir, thank you very much, appreciate your experience and significant experience and your input. Now i recognize ambassador tom, please proceed with five minutes of testimony wherever you are ready. Thompson, scott, members of the house commit on agriculture. As a lifelong farmer i would like to share my perspective with you today on the threat of china to americas food supply and agricultural systems. I add the world is watching us today. Americans need to understand our interNational Security is dependent on our Food Security. Americans can not any longer take agriculture and our food systems for granted. Jinping and the Chinese Communist party recognize food and their relation to power in the world the ccps goal is to reshape the world order through their control of the brick nations, global trade, and belts and Roads Initiative all to have 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 the risks by the ccp that we can deal with immediately. First, cybersecurity. Threats to the agriculture are diverse and can have significant impacts on the industry. Some of the key concerns include intellectual property theft, chinese targeted farming dating, breeding information and Biotechnology Research that 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 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 515 years to develop a seed variety. At a cost of over 100 million. It also estimates that the annual value of agriculture Seed Production in the u. S. Is over 11 billion annually. Datadriven attacks, agriculture rely heavily on this data as examples like farms like ours produce a tarabyte of data that is exclusive to our farm. We are at extreme risk of theft or attack of this data that can alter and disrupt our systems and lead to incorrect farming decisions and likely harm yields. They have been numerous attempts by the chinese to steal the data. Fortunately they were caught and convicted. Again, how many were not caught. Infrastructure attacks. Electrical grid to supply explain and broadband can be targeted in disrupting our food supply. When we consider ransomware, farming operations can be lawsuited by attacks demanding payments to can be halting by attacks demanding payments. We can all remember jbs attacks that disrupted the entire supply chain from livestock production operations to the consumers dinner table. The 11 million ransom was paid but the cost to the company and the agriculture supply chain was many multiples greater. Espionage, chinese are creative in their attempts to steal the information from as many data. From industries, cranes in ports and anything that has data or conversations. Although the u. S. Government has is aware of the threats we need to strengthen protection from americas food supply and advantage. Identifying vulnerabilities and improving the protective measures of government against cyberthreats. Next, portions of our supply explain have been off shored. Including Building Blocks for our food system such as Crop Production and nutrients. These are the basic elements that nourish crops, protect them from weeds, insects and diseases. A supply chain report indicates 70 , 70 of the Crop Protection products that are produced globally, most from china. Another 40 of the worlds phosphorous supply is from 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 products will have a farreaching 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 manufacturing these critical products here at home in the u. S. To feed the americans and the world. In summary, if the impact is from cybersecurity threats or from minimized access to crop nutrients or Crop Protection products the chinese are strategically building their world dominance over food. It is coming at the expense of American Invasion but amplified by regulatory environment. The people in these chambers on this hill need to take action to bring our supply chains home, protect our invasion and increase funding for research and development. Now is the time for agriculture and food systems, if not, america could, once again, face Food Insecurity like we did 100 years ago. It is time to stop taking ago and our food systems for granted. Again, the world is watching. I yield the floor back to you chairman thompson. Ambassador thank you very much for your record and service and leadership and your input in this topic. We are now going to, at this time, members will recognize questions for seniority, major and minority members and order of arrival for those after. I am willing to defear my line of questioning will the end. Each will be recognized five minutes each to allow us to get as many questions as possible. Starting on the majority side. Mr. Lucas from oklahoma for five minutes thank you, for calling this hearing and the witnesses for testifying today. During my time in congress i have been engage fld and party to many discussions of Foreign Investment. Due to my position on the House Financial Service committee. This is due to the committees jurisdiction over foreignip investment on the United States, it is located within treasure. Treasury. The challenge is tension between two widely shared goals of protecting our National Security and fostering a welcoming economic environment. Congress is attempted to strike that balance during various reforms of process. Most notably 2007 with fensa and 2017 with firma. Today i invite you to join me to our panel friends in that discussion. First to mr. Daly, 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, lets just cut straight to the chase. Well, we have to keep our open investment, that has been sustained from president carter until now. One of the greatest strengths we have is the investment we get from abroad. Trade important but investment. As you know, oversight capacity. There are issues that are drawn from Foreign Investment. Chinese actors have been interesting in the way that they have found vulnerabilities in our laws and the gaps that proceed from it but in their capabilities to use 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 our open investment policy. But be smart in how we a lie our National Security. Either of you gentleman wish to touch on there . I would add from farmers perspective. As a grower and a landowner and farming land in north dakota the concern around Foreign Investment is real for growers as well. That added investment that outside buyers come. And it is not just china. It is other out