Witnesses. Our second panel of witnesses to take their seats and 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 second panel is josh, president of the american soybean association. Second witness is nova brings private and Public Sector experience, numerous agencies, the senate and cfius committee and third and time witness for this panel is a great friend. 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, high protein crops. Opening new markets is followed by time, attention and maintenance to ensure Market Access. Our trading partners are all 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 value totalled 5 billion. 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 and and retall tower tariffs and the value of u. S. Exports to china decreased 76 from 2017 to 2018. 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 ramped up production to meet demand. And in the 2017 and 2018 marketing year, brazil over took the largest producer of soybeans. Our farmers are facing competition with brazil. The trade war damaged our reputation as a reliable provider of soybeans. Section 301 tariffs and retall tower have damaged incountry relationships. Our customers looked elsewhere to avoid trade risks. United states considers actions to protect our National Security interests, we must 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. Reject legislative attempts to repeal chinas normal trade. A. S. A. Is concerned that it will have severe consequences. U. S. Soybean exports to china were the First Agricultural targeted and the past is pro log that u. S. Soybeans would be impacted again. Pass a comprehensive farm bill that meets the needs of u. S. Agriculture. And programs are critical to the longterm success of u. S. Soy abroad. Funding levels for the Market Access program have been largely unchanged for decades even though demand for these programs has increased. It should include and insufficient farm safety net. A very simply we need better tools to help farmers in times of economic disruption. And number three, exercise congressional Oversight Authority to press the administration to reengage in negotiations for bilateral and Multi Lateral trade agreements. U. S. Was the leader in establishing trade agreements but the last one entered in 2012 despite the u. S. Negotiating the partnership. That is 10 years for codified market expansion. While at the same time, our International Competitors have worked to dpain increased Market Access. Thank you as a farmer from north dakota and on behalf of the soybean. Thank you for the opportunity to express this perspective. I look forward to your questions. And informed by my service in the u. S. Government where i was fortunate to serve along side 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 to its businesses nephariously through third parties. Given that experience and helping u. S. Companies and malicious activity, the focus of my testimony is the national and economic security, considerations involved in and agriculturalrelated businesses and supply chains. As a baseline and as my witness testimony relays, recent laws implemented by china compel any chinese entity to act at the direction of the chinese state, i. E. The communist party of china. The question before the committee is really, what do you as leaders of this country believe that the United States should accept regarding ownership and control by the communist party of china over u. S. Access of agricultural land, production and supply chains. Problem atically, there are serious gaps in federal laws and reporting that expose our Critical Infrastructure to vulnerability and impact Farmers Ranchers and producers as they 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 chinas military, vectors that provide intelligence are being sought where they provide information to silos adjacent to military or telecommunication towers. G. M. O. s and other technologies have placed at risk the nations agricultural leadership. There are ample cases of chinese agents having been caught taking such technologies. Imports ensures that their goals for independence from foreign dependencies will remain a priority. Further, chinas passive cyber warfare have the capability to disrupt key american infrastructure critical to our agriculture. This includes power and Water Utilities and communication and transportation systems. Chinas global acquisition and supply chain monopolies and technologies continue to expand unchecked and unaddressed. We have significant dependencies on parts, electronics and other inputs to our agricultural machinery. Our livestock is under significant independence and pesticides and herbicides. China is requiring companies as export platforms globally and in the United States. Such diversion of products can have negative impacts on u. S. Producers. Further, chinese acquisition of agricultural storage and trading markets should be examined. Lastly, given the advances in farm technology, our reheins on supply that provide kill switches to our machinery, our eyes is all matters that should be addressed. But there are solutions. Federal laws addressing 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 solution for better farm ownership reporting standards and a number of members have pointed to Additional Solutions and reporting. Stronger 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 and unwarranted and sophisticated threats that certain actors. That concludes my opening remarks. Mr. Thompson thank you very much. Appreciate your experience and your input. Now i am pleased to recognize our next witness. Honorable chairman thompson, Ranking Member scott and distinguished members of the committee on agriculture, as a lifelong farmer and ambassador to the u. N. Food and agriculture organizations i share you my percent perfect thief on the threat of china to americas food supply and agricultural systems. I add, the world is watching us today. Americans need to understand there are National Security is dependent upon our Food Security. Americans 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 the world order through global trade and belts and Road Initiative to retain economic superiority over the United States and our allies. To meet these goals, they are growing Agricultural Production domestically and globally at the expense of the United States. I will address a number of these risks by the c. C. P. That we could deal with. First cybersecurity, threats to the United States agriculture are diverse and can have significant impacts. Some of them include, intellectual property theft. The chinese have gone after crop yield data and breeding information and Biotechnology Research which will lead to a competitive advantage. I have seen this 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 515 to establish a seed variety. And the annual production is over 11 billion annually. Data driven attacks rely heavily on this data like farms like us produce data that is exclusive to our farm and major driver to 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. There have been attempts and caught and convicted again, how many were not caught. Infrastructure attacks, Critical Infrastructure from electrical grid could be targeted in disrupting our food supply. When we consider ransomware, it could be halted demanding payments to restore payments and we all can remember the ran some attacks on j. B. S. Which disrupted the supply chain to the consumers dinner table. 11 million was paid but the cost and the Agricultural Supply chain 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 americas food supply. This includes identifying vulnerabilities than Prime Minister proving measures of government against cyberthreats. Next, portions 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 produced globally most from china. Another 40 of the worlds toes ferous supply originates in china. Imagine if they shut off our supply. Crop nutrients, yields will decrease 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 Insecurity. This is a National Security 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 allow the United States to bring this capacity back home while supporting those that are manufacturing these critical products here at home and u. S. To feed americans and 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 are coming at the expense of American Innovation but amplified by our burdensome regulatory environment. The people on this hill need to bring our supply chains home increase our funding for research and development. Now is the time for national strategy. If not, america could face Food Insecurity like we did 100 years 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 your input today on this important topic. And members will be recognized for questions in order of seniority and those who joined after the hearing convened and defer my questions to the very end. Each member will be recognized for five minutes each to get starting with the majority side. I recognize mr. Lucas from oklahoma. Mr. Lucas thank you to the witnesses. During my time in congress, i have been engaged and partied discussions around Foreign Investments of the United States due to my position on the House Financial ServicesCommittee Due to the committees jurisdiction over Foreign Investment or cfius that is located within treasury. One of the most challenging aspects is the tension of two widely shared goals of protecting our National Security while fostering an economic environment. Congress has struck reforms. Most notably, 2007 and in 2017. Today i invite you to join me to our panel friends in that discussion. From your view point, what is the correct balance between National Security while allowing the National Investment in our economy, lets cut straight to the chase. Well, we have to keep our open investment policy that has been sustained since president carter on through now. One of the greatest strengths we have is the investment we get from abroad. 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 they have 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 incredibly smart how we go through the cfius process. Mr. Lucas do any of the gentlemen wish to touch 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 its not just china. Its other out of state and foreign owners that could drive up the price of land. 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 that benefit me on the farm. So in those two areas there is work to be done and you are right. Its a tough balance, i dont envy the job that congress has but from a growers perspective, two places to look at. Mr. Lucas any thoughts, ambassador . My time serving as ambassador in the middle east and africa and latin america, the chinese are aggressive in their approach in investing in these developing nations. I look in particular at africa, nearly 1. 1 billion hectors. The United States is around 150 million. We think they are the most essential part that china is gaining for, is the minerals, its not. I see the belts and roads initiative. And we see the growth in soybeans moving into china. The nations are forming up together and through the investment of the chinese party. When i come back to the United States we have to be extremely careful where they do invest. We need to havize on this. I gauge you to please be careful. Mr. Lucas i cant think about a more important subject to address today and i want to thank you, chairman thompson for your support of my legislation agricultural risker review act that was signed into law earlier this month. It adds the secretary of agriculture to the cfius committee. 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 back. Mr. Thompson i am pleased to recognize Ranking Member scott. Mr. Scott chairman, i want to thank you for letting democratic witness go first. We are proud to hear from a 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 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. Hes a National World leader on Food Security and hunger. And im telling you, this is a national issue. And i hope if theres one thing that goes from this hearing, its that we are putting this issue at the front of the list. There are people all over the world are watching us with the most powerful nation in the world, yet as mr. Mcgovern has said