Small Business Resiliency: Learning to Succeed in America's Dynamic Economy
Summary
The printed record of S. Hrg. 118-114, a field hearing of the Senate Committee on Small Business and Entrepreneurship on August 17, 2023 at Berlin Town Hall in Berlin, MD, with Chairman Benjamin L. Cardin presiding. Senator Chris Van Hollen and Rep. Andy Harris also took part. Cardin's opening statement focuses on rural small businesses and names access to capital, workforce and internet connectivity as recurring challenges, citing the Paycheck Protection Program, the Economic Injury Disaster Loan Program and the Restaurant Revitalization Fund as COVID-19 measures. The witnesses were a Talbot County economic development director, the owner of Wittman Wharf Seafood, LLC, a program director of Shore Gourmet and a consultant with the Maryland Small Business Development Center. The hearing was adjourned at 2:33 p.m.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
S. HRG. 118–114
SMALL BUSINESS RESILIENCY: LEARNING TO
SUCCEED IN AMERICA’S DYNAMIC ECONOMY
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
OF THE
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
AUGUST 17, 2023
Printed for the use of the Committee on Small Business and Entrepreneurship
(
Available via the World Wide Web: http://www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
53–541 WASHINGTON : 2024
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED EIGHTEENTH CONGRESS
BENJAMIN L. CARDIN, Maryland, Chairman
JONI ERNST, Iowa, Ranking Member
MARIA CANTWELL, Washington MARCO RUBIO, Florida
JEANNE SHAHEEN, New Hampshire JAMES E. RISCH, Idaho
EDWARD J. MARKEY, Massachusetts RAND PAUL, Kentucky
CORY A. BOOKER, New Jersey TIM SCOTT, South Carolina
CHRISTOPHER A. COONS, Delaware TODD YOUNG, Indiana
MAZIE K. HIRONO, Hawaii JOHN KENNEDY, Louisiana
TAMMY DUCKWORTH, Illinois JOSH HAWLEY, Missouri
JACKY ROSEN, Nevada TED BUDD, North Carolina
JOHN W. HICKENLOOPER, Colorado
SEAN MOORE, Democratic Staff Director
MEREDITH WEST, Republican Staff Director
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CONTENTS
August 17, 2023
OPENING STATEMENTS
Page
Benjamin L. Cardin, U.S. Senator from Maryland ............................................... 00
Chris Van Hollen, U.S. Senator from Maryland ................................................... 00
WITNESSES
Ms. Cassandra M. Vanhooser, Director, Department of Economic Development
and Tourism, Talbot County, Maryland ............................................................. 00
Prepared Statement ......................................................................................... 00
Mr. John ‘‘Nick’’ Hargrove, Owner and Operator, Wittman Wharf Seafood,
LLC ........................................................................................................................ 00
Prepared Statement ......................................................................................... 00
Ms. Roxanne Wolf, Program Director, Shore Gourmet ........................................ 00
Prepared Statement ......................................................................................... 00
Mr. Richard ‘‘Rich’’ Loeffler, Business Consultant, Maryland Small Business
Development Center ............................................................................................ 00
Prepared Statement ......................................................................................... 00
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SMALL BUSINESS RESILIENCY:
LEARNING TO SUCCEED IN AMERICA’S
DYNAMIC ECONOMY
THURSDAY, AUGUST 17, 2023
UNITED STATES SENATE,
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP,
Berlin, MD.
The committee met, pursuant to notice, at 1:00 p.m., in Berlin
Town Hall, 10 Williams Street, Berlin, MD, Hon. Ben Cardin,
Chairman of the Committee, presiding.
Present: Senators Cardin [presiding] and Van Hollen.
Also Present: Rep. Andy Harris.
OPENING STATEMENT OF SENATOR CARDIN
Chairman CARDIN. Well good afternoon, everyone. Thank you all
for being here. The hearing for the Senate Small Business and En-
trepreneurship Committee will come to order. I have the honor of
chairing this Committee.
I want to welcome my two colleagues who are joining us today,
Senator Chris Van Hollen, who serves on the Appropriations Com-
mittee and also Chair of the subcommittee that has responsibility
for the small business agenda, and Congressman Andy Harris, who
also serves on the Appropriations Committee on the House side. I
want to thank both of my colleagues for underscoring the impor-
tance of small businesses to our community, and that we work to-
gether to do everything we can to help small businesses do better.
This hearing, I think, has very appropriate title. We are dealing
with resiliency of small businesses in our economy today, the chal-
lenges that we have. I want to start by thanking Mayor Tyndall
for his leadership here in Berlin. It is always a pleasure to be in
Berlin.
We had an opportunity to visit with some of the small businesses
before this hearing, and we know this is a very livable community,
we know people love living here and visiting here, and we saw that
enthusiasm on the shop owners that are doing business here.
They are not only doing a great service from the point of view
of economic activities, but they do it in a way that is so important
for the growth of the community. It is sustainability. It is healthy
foods. It is helping moms deal with the challenges of motherhood.
It is all those things that they do to make this community not only
an economically viable community but a fun place to live. It makes
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it a much more exciting place.
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I did note, with the mayor, that the only thing that was missing
on the Main Street, something he does not want to see, is a chain
store, so that is good, that we are able to keep, really, local busi-
nesses and local owners here in Berlin.
I want to also just point out, this hearing is mainly to focus on
the challenges we have in rural areas. We recognize that rural
areas have additional challenges. We have seen that over and over
again. We have seen the challenges that occur from COVID–19. We
have had challenges in regard to natural disasters that make it
much more challenging for small businesses. So we know that we
have to pay attention to those issues.
I think all of us today, our hearts and prayers go out to the peo-
ple of Hawaii and Maui for the tragedy that occurred there. It is
unspeakable the loss of life. I know my colleague, Senator Hirono,
is holding a hearing tomorrow in Hilo. I am sure it is going to deal
with those issues. Our Committee will do everything we possibly
can, working with the Biden administration, to provide all the help
we possibly can to the people of Hawaii. It is unspeakable the loss
of life.
Those of us who have been to the town that was destroyed know
what a special place that was. It was special, like Berlin, because
of the small businesses operators that were in Lahaina. So now
they are going to have to rebuild. We want them to rebuild. It is
going to be very, very difficult. They do not have the deep pockets
that large companies have, and they need our partnership. They
need our governmental partnership. So we recognize that we have
special responsibilities as a government partner.
The communities of small businesses have rebounded from these
tragedies in the past. In this region alone you have historically had
the peach blight, you have had Hurricanes Hazel and Irene, you
have had tornadoes and flooding, you had COVID. Small busi-
nesses have shown resiliency, but we know we have to do more in
order to help in regard to resiliency.
As I have traveled around and visited the small business owners
in rural Maryland I hear the same challenges: lack of opportunity
for capital, that banks are just not available in rural communities
with smaller small businesses to get the type of capital they need
to open a store or to expand their operations. We hear about the
challenges of workforce. Rural communities have challenges with
workforce generally, but under a tight labor market it is even more
difficult to get trained workers in our rural communities. And
connectivity. We learned, during COVID–19, you cannot survive
without connectivity, and we know in the rural parts of our state
we do not have the same capacities that we do in urban centers in
regard to access to internet.
So we are ready to help. I say that because I think we have a
track record of helping. During COVID–19, we were able to pass
the Paycheck Protection Program, the Economic Injury Disaster
Loan Program and Grant Program, the Restaurant Revitalization
Fund, the Shuttered Venue Programs. These bills were bipartisan
because we recognized we had a challenge we had to meet. And it
helped.
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This Committee is an advocate for small businesses. We want to
know what we can do better. We have many resource partners that
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are available to you. I want to acknowledge Steve Umberger, who
is here. He is the Regional Director of the Baltimore Office, that
handles the Eastern Shore of Maryland. He is available. He gave
out a lot of his cards this morning, so I hope you will be getting
a lot of phone calls.
We have the SBDC for the Eastern Shore region, located in
Salisbury, to help our small businesses. We have the Minority
Business Development Agency. The Infrastructure Bill gave it a
specific charge and focus, to put more of its resources into rural
areas than it has in the past. We have Women’s Business Centers.
We have gone, in the last 4 years, from one to four Women’s Busi-
ness Centers in Maryland, now one located in Salisbury that can
help our small businesses.
We have a Veterans Business Outreach Center now located in
Maryland. We did not have one a few years ago. We have the
SCORE Mentorship Program located in Dorchester County. So we
have resource partners that are available to our small businesses.
I am working very closely with Senator Ernst. She is the ranking
Republican member of our Committee. I want to acknowledge that
her staff is here with us today. Graham, thank you very much for
being here. We are working and taking this information to work to-
gether. When I say we are working together, we passed 12 bills out
of our Committee during this past work period, many dealing with
some of the challenges that we are going to be talking about today.
In addition, 5 small business bills were included in the National
Defense Authorization Act. All of these are bipartisan efforts to
help small businesses in our community.
This hearing will give us a chance to show how we can better
serve small businesses in our rural communities, and I want to
first recognize my two colleagues, I am going to recognize the
mayor for some introductory comments, and then we will hear from
our distinguished panel of witnesses.
So let me yield to Senator Van Hollen.
STATEMENT OF SENATOR VAN HOLLEN
Senator VAN HOLLEN. Thank you, Senator Cardin. It is great to
be here in the Town of Berlin and to see a roomful of people fo-
cused on trying to make sure that we help our small businesses
and other businesses succeed and make sure our communities can
flourish.
I do want to thank Senator Cardin, Chairman Cardin, who
chairs the Small Business Committee in the United States Senate
and is also the leader of the Maryland congressional delegation. I
am sure you know that he has decided not to seek reelection, and
I just want to take this opportunity, while we are all here together,
to thank him for his steadfast leadership on small businesses
issues and all issues important to Maryland and the United States.
So thank you, Chairman Cardin. [Applause.]
Senator VAN HOLLEN. I also do want to thank our colleague,
Andy Harris, Congressman Harris. Obviously, we do not agree on
every issue, but when it comes to some of the key issues helping
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this congressional district, we look for common ground, and I know
we are going to talk about some of it today, including the blue cat-
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fish and the worker shortage, especially in the seafood area and
other issues.
Let me just emphasize a few things Senator Cardin said, and he
really went through the highlights so I will not repeat them. But
we all did go through a very difficult period during the pandemic,
and that was especially true, of course, of small business owners
and retail. And that is why we worked, on a bipartisan basis, early
on in the pandemic to pass emergency relief like the Paycheck Pro-
tection Program, like the EIDL Program, like other programs.
But we know that rebounding is not enough. We need to continue
to grow and advance. And that is why I look forward to hearing
from the testimony of our four witnesses. I know you are going to
be introduced by the Chairman. Thank you all for being here. I
look forward to learning from you and getting additional ideas.
We work very closely with the Commerce Department as well,
and the EDA Program, as well as a number of other Federal pro-
grams, to try to find resources, seed money, and lower-cost loans
from the different Federal agencies, including, of course, the Small
Business Administration, to help all of you grow and prosper.
So let me again thank all of you for being here, and thank you,
Mr. Chairman, for the opportunity.
Chairman CARDIN. Thank you, Senator Van Hollen. Congress-
man Harris.
Mr. HARRIS. Thank you very much, and I do want to thank the
two Senators for being here and recognizing that rural areas are
different. Whether you are in Maryland, whether in the Midwest,
or wherever you are around the country, rural areas are different.
That is why I am particularly pleased to chair the Appropriations
Subcommittee that deals with the USDA. USDA is an important
partner to rural areas, both on the business side and the agri-
culture side, and hopefully we can keep our rural areas vigorous.
You know, when the Senators drove down, and those of you who
drove down Route 50 here, you passed a whole lot of family busi-
nesses on the way down. If you go through Talbot County you are
seeing Taylor’s Produce on the side of the road, a small, family-
owned farm that runs a business.
If you come through Cambridge, Hubbert’s Hardware on the west
side of 50 as you come through town, look, competing with—fortu-
nately in Cambridge we do not have a Home Depot or a Lowe’s for
them to compete with, but they do compete with larger companies,
and the playing field is not always level.
As you go through Trappe there is Freedom Fuel, an independ-
ently owned, family owned gas station. I mean, these are things
that just do not see much of anymore. But you see that here on
the Eastern Shore of Maryland. And some of them world-class busi-
nesses, family owned. Hardwire in Pocomoke, a major defense con-
tractor, a niche contractor, and they make a niche product, but it
is world class, literally a world-class product made right here by
small family-owned businesses.
So again, I want to thank Senator Cardin for scheduling this, for
listening, for both Senators, understanding the importance of
small, especially the family-owned businesses in the Eastern Shore
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of Maryland, and in general, rural areas throughout the country.
So thank you very much, Senator.
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Chairman CARDIN. Thank you. We are joined by Mayor Tyndall,
who is doing a great job as mayor, and his wife, Chelsea, is with
him as well. Thank you for your hospitality here, and more particu-
larly, thank you for stepping forward. You have got a tough job,
being a mayor of a city. You cannot hide from issues. Senator Van
Hollen and I and Congressman Harris can go to different parts of
our district or state when there is a challenge, but you cannot. So
thank you for your public service.
Mr. TYNDALL. Well, thank you, and do not know, and many of
you probably do not know this, but Senator Cardin was one of the
first folks that called to congratulate me after I did win election as
mayor, and that really meant a lot. I think then you said roughly
the same words, that it is the local level of government that really
does face a lot of those challenges. So we appreciate the work that
all of you do, and your offices are very responsive to our questions,
and that means a lot.
With that, Senator Cardin, I will say it is bit odd because I am
usually sitting where you are sitting, in our mayor and council
meetings, but it is nice to come back to the place where I started,
which is sitting out here in the audience with all of our constitu-
ents.
So if you do not mind, can I say a few words?
Chairman CARDIN. Sure.
Mr. TYNDALL. Thank you. So Chairman Cardin, on behalf of the
Town of Berlin and the entire Eastern Shore I do want to thank
you for bringing the United States Senate Committee on Small
Business and Entrepreneurship field hearing to the Town of Berlin
and the Eastern Shore. I also want to thank Senator Van Hollen
and Congressman Harris for taking the time to hear firsthand from
the panel of witnesses that we have here today.
Most importantly, I want to thank the witnesses for sharing your
stories of resiliency and how you have weathered the most recent
pandemic, and I want to thank all of you, the folks that are from
the Eastern Shore and from the Town of Berlin, many local faces
that I recognize, for coming out to listen.
I have said this a lot on the press interviews that we were doing
before we came in here. I think we can learn a lot from each other,
from the time that we get to hear from folks that are across the
Eastern Shore, that are going to share their stories with us today,
to the stories that were shared on Main Street with Senator Cardin
when we walked around. I think that exchange of information, that
understanding of one another I think helps us all, so I do appre-
ciate that.
I do want to recognize a few folks that are here at the local level.
I want to start with our councilmembers that are I have from the
Town of Berlin, Councilmember Knerr, and Councilmember Orris,
and then we do have Ms. Carol Rose representing Senator Mary
Beth Carozza’s office. Thank you. We have a local mayor, Mayor
Pruitt, from Snow Hill. Thank you. We have Mayor Mahoney from
Chesapeake Beach. Thank you. He is a huge supporter of Berlin,
and we appreciate that. Mr. Clay Stamp from Talbot County. And
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I think that is everybody. Am I missing anyone? Okay. If I am
missing somebody, I apologize.
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The focus of the hearing this afternoon is on small business resil-
iency. And I may be a bit biased—I am the mayor of the Town of
Berlin—but I do not think you can find a better place to showcase
resiliency than right here in our small town. The Town of Berlin
is home to over 5,000 residents and more than 250 businesses—you
would not know that from driving down our Main Street—and it
serves as a tourism destination for folks from around the country.
We are rich in history. We are known as the birthplace of Com-
modore Stephen Decatur. He once had a home right around the
corner from where you gentlemen work, over at Lafayette Square,
and he was born here in the Town of Berlin.
Over Berlin’s 155-year history, our residents and business com-
munity have done a tremendous job of preserving the architectural
history of our town and adopting to the demands of our changing
economy. This morning, prior to the hearing, Senator Cardin,
Chairman Cardin, and I had the distinct honor of walking our
downtown business district. Along our work I mentioned that the
thriving business district that we see today was not always the
case.
As a lifelong resident of Berlin, I remember a time when the
shop windows were not full and when we had numerous vacancies
downtown, and when they were not filled with energy of our hard-
working business owners and their employees. I also remember a
time when our sidewalks were not packed, when you could actually
walk down the sidewalks without having to navigate other folks.
And I also remember a time when parking was not an issue in Ber-
lin.
So thankfully, here our residents and business owners embraced
change and leaned into the difficult challenges that come along
with starting and growing businesses. To me, these are the quali-
ties of resiliency and some of the most important qualities that
make up such a cool and amazing small town like the Town of Ber-
lin. It truly is a great place to live, work, and visit.
So in closing I do want to thank all of our Town of Berlin em-
ployees. Just raise your hands. Thank you. We have a bunch of
them in attendance. Many of you do not know this but that wall
was not——
Chairman CARDIN. We heard the story about that. So we are re-
sponsible for the renovation of this place.
Mr. TYNDALL [continuing]. It is okay. It is a historic building. It
comes with its challenges. But we had a substantial amount of
water damages. Sujin, right up here on the stage, from Senator
Cardin’s office, she did the walkthrough in the beginning, and she
is like, ‘‘You guys had this down.’’ And then the next day Cody—
I do not know if he is in here—from our Public Works, we were
doing a couple of things on the back wall, making things look pret-
ty, and the whole wall came down. We had water damage, and a
substantial amount of water damage. So our folks worked dili-
gently to make it look flawless in here today, so thank you to our
Town of Berlin employees.
I also want to thank Chairman Cardin’s staff for their hard work
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in transforming these council chambers that we use every second
and fourth Monday into a satellite Senate hearing room. So we do
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appreciate that. And this is truly, I think, a first for the Town of
Berlin.
So thank you, Chairman Cardin. Thank you, Senator Van Hollen
and Congressman Harris. We appreciate it.
Chairman CARDIN. Mr. Mayor, once again thank you for your
hospitality. We know that it is a lot of work, and we appreciate it
very much. And thanks for mentioning Sujin. I want to thank her
for the work that she did in putting together this hearing. I want
to thank Graham for his cooperation and help, because we worked
together, both parties. Sebastian, thank you for your help. Ellie
and Elissa, thank you for your help as well. And, of course, the
staff director for the Small Business Committee, Sean Moore, is
also with us. I have Carleton Atkinson, who is my State Director,
and Kim Kratovil, my Regional Director. If you have any problems
after this hearing, Kim is the person to talk to. [Laughter.]
Chairman CARDIN. All right. So we have a really great group of
witnesses today. Your full statements will be made part of the
record. You may proceed as you wish. We ask that you try to sum-
marize your comments in about 5 minutes or so, and then we will
have a chance to engage in conversation.
We have Ms. Cassandra Vanhooser, the Director of Economic De-
velopment and Tourism at Talbot County Government. We have
Mr. John ‘‘Nick’’ Hargrove, Sole Member/Owner and Operator of
Tilghman Island Seafood and Wittman Wharf Seafood, Tilghman
Island, Maryland; Ms. Roxanne Wolf, Program Director, Shore
Gourmet, in Denton, Maryland; and Mr. Richard Loeffler, Business
Consultant, Maryland Small Business Development Center, lo-
cated—you are from Cambridge but I think the center is actually
in Salisbury, but you are from Cambridge.
So we will start with Ms. Vanhooser.
STATEMENT OF CASSANDRA VANHOOSER, DIRECTOR OF ECO-
NOMIC DEVELOPMENT AND TOURISM, TALBOT COUNTY
GOVERNMENT, EASTON, MD
Ms. VANHOOSER. Thank you. Good afternoon, Chairman Cardin,
Senator Van Hollen, and Congressman Harris. It is an honor to
speak with you today about an issue of vital importance in the
ever-changing landscape of today’s economy.
The dictionary defines resiliency as ‘‘an ability to recover from or
adjust easily to adversity or change.’’ But few of us really need a
dictionary to tell us what resiliency is. It is woven into our lexicon,
and this is how we typically say it. You have got to roll with the
punches, get back on the horse. You can weather this storm. When
life gives you lemons, make lemonade.
But when we talk about business resiliency it is far more than
just getting back on a horse. It is being proactive, anticipating
change, identifying and taking steps to mitigate risks, and reacting
quickly to disruptions, all while keeping the doors open, employees
productive, and revenue flowing.
Economic development organizations play a critical role in build-
ing resiliency in the business community. Early in my career I was
surprised by an instructor who summarized the profession in seven
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simple words: ‘‘Economic developers are a conduit to resources.’’
While that is largely true, our role is far more nuanced than that.
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Communities invest in economic development and tourism be-
cause we help businesses grow and succeed. We help remove obsta-
cles that impede success, and we help businesses cultivate the stra-
tegic mindset that includes things like disaster preparedness, busi-
ness continuity planning, and succession planning. We market the
community to attract new businesses, new workers, and new visi-
tors. And yes, we connect owners, like Wittman Wharf Seafood and
Nick Hargrove, to the resources they need to be successful.
Examples of resource partners include the Small Business Ad-
ministration, the Small Business Development Center—if I could
clone Rich Loeffler I would do it—USDA Rural Development, as
well as state agencies. My resources partners are a force multiplier
for the work that I do.
There is no one-size-fits-all economic development plan, yet the
pandemic underscored some foundational principles that define the
work of an economic development professional. I could list many,
but in the interest of time I am going to pick just one.
Preparedness is the cornerstone of resiliency. People often fail to
prepare for business disruptions because some things are just too
scary to consider. That is human nature. But planning pays off for
individuals, businesses, and communities, and not just for natural
disasters and public health emergencies. Change in the business
world can be just as disruptive as a natural disaster. The world can
change overnight, but business owners and managers can deal with
changes by being prepared.
Communities must also be prepared to assist businesses when
disruptions occur. Talbot County has integrated the business com-
munity into its emergency preparedness planning for many years.
When the Department of Emergency Services created its first Haz-
ard Mitigation and Community Resiliency Plan, leaders asked this:
‘‘What event could take us down as a community?’’ The outcome of
that process was the establishment of five community pillars: Infra-
structure, Education, Public Health and Safety, Environment, and
of course, Economic Stability. When the COVID–19 health emer-
gency emerged, we already had a roadmap and a plan to follow,
and that roadmap included the business community.
As economic developers, we also need tools that help us prepare
for, monitor, and measure the impact of any crisis that affects busi-
nesses. I was fortunate enough to be part of a team that built an
award-winning suite of tools that was funded by the EDA. Our
Eastern Shore Economic Resiliency Toolkit includes dashboards,
web mapping applications, interactive reports, and a dedicated web
portal. Nine regional partners worked for 2 years on this project,
and we continue to meet and collaborate. Today we use the Eastern
Shore Economic Resiliency Toolkit to help identify challenges and
to assist in long-term planning and public policy development.
Now, I am scrapping my notes from here, and I am going to end
with the newspaper that I picked up on the way out of the hotel.
The headline here says, ‘‘Hooper’s buyer fills his low staff.’’ Now,
you are going to hear some stories of resiliency today, and these
are my friend and partners. I am not going to steal their thunder.
But this story really underscored, I think, the essence of resiliency.
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This restaurant business in West Ocean City had a fire, a kitch-
en fire. They credit staff and community support for helping them
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get up and running in a timely fashion. But on page 8 the paper
says this, ‘‘Hooper’s burned to the ground in a fire on January 29,
2002, and following that the owners had put everything in place to
make sure that nothing like that ever happened again.’’ The res-
taurant reopened in one day.
Yes, resiliency is a strategic imperative in an increasingly inter-
connected and unpredictable world. The businesses that survive
and thrive will be those that master the principles of resiliency.
Thank you for your time and your attention today, and I look for-
ward to questions and conversation as we move forward.
[The prepared statement of Ms. Vanhooser follows:]
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Chairman CARDIN. Thank you very much for your testimony.
Mr. Hargrove.
STATEMENT OF JOHN ‘‘NICK’’ HARGROVE, SOLE MEMBER/
OWNER & OPERATOR, TILGHMAN ISLAND SEAFOOD, LLC
AND WITTMAN WHARF SEAFOOD, LLC, TILGHMAN ISLAND,
MD
Mr. HARGROVE. Good afternoon, gentlemen. My name is Nick
Hargrove and I am a seafood processor right here on the Eastern
Shore. I own two historic packing houses, one of them being the
Old Ray Jones packing house in Wittman, and I also own the Har-
rison Oyster House right on Tilghman Island.
Before I get rambling on about blue catfish, I would like to thank
Cassandra for all the help she has given me. We started working
together a little over a year ago when I purchased the Harrison
Oyster House. Having already owned a packing house we were not
real sure that this was the right step for us to go. But when asked
to buy it we decided that we were going to take the leap, and we
figured out that this was probably going to be in the best interest
of the community, to make sure that the fishermen had a facility
to work out of. Having no idea what it took to get an occupancy
permit, I reached out to Cassandra for some guidance. Little did
she know what she was getting into. This is where our story be-
gins.
As many of you know, the blue catfish has been a hot topic since
our governor, Wes Moore, asked for Federal assistance in com-
bating the invasive species. But that was not always the case. The
blue catfish have been swimming around in our waters since the
’70s and since then have been wreaking havoc on our ecosystem
ever since. There are an estimated 150 million pounds currently
swimming in our waters. I was a traditional seafood buyer and
processor, buying and processing oysters in the winter, buying and
processing crabs in the summer. After a terrible year in 2022, buy-
ing, selling, and picking crabs, we not only were exhausted but we
showed a loss for our efforts at the end of the season. Wondering
how we were going to make ends meet going into the 2022 oyster
season, we knew we had to make a change. We would not be able
to keep the doors open and keep doing business as we were before.
We decided that we would turn the old oyster house into a USDA
certified blue catfish processing facility. I was approached by a gen-
tleman who was a purchaser for the military. He told me that he
purchased hundreds of thousands of pounds of blue catfish filets a
year and was having trouble meeting the demands of the military.
He asked if I thought I could convert the packing house in
Tilghman to a catfish plant. After doing some homework and learn-
ing everything that would be required to get certified we still were
not sure that we could pull this off.
But that same exact month, the 2022 fall crab survey came out
and showed the lowest number of crabs reported since they started
doing the surveys back in 1990. The report showed that only 227
million crabs were estimated, which may seem like a lot, but 10
years prior to that there were an estimated 765 million crabs.
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I wanted to figure out where the crabs were going. All signs
pointed back to the blue catfish. Pictures started surfacing with
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blue catfish bellies full of dozens of crabs. This was really the straw
that broke the camel’s back for me. Being frustrated with the crab
industry and concerned for my friends and community that rely on
the crabs for their livelihood, I knew we did not have a choice. We
had to become part of the solution and not the problem.
The real work began. We started renovations on the building,
putting up waterproof paneling, epoxy floor coating, LED lighting,
large coolers and freezers, purchasing insulated vats, trucks, boxes,
label machines, ice machines, and reaching out to fishermen in
order to purchase their fish. We truly felt like a fish out of water
by the end of the project. But we did it, and we began cutting in
March. Fishermen were catching up to 70,000 pounds of fish a day
and we were hustling to keep up.
Training my staff of oyster shuckers to learn to cut fish was not
easy, and I obviously could not have done it alone. My plant man-
ager, although doubtful this was a good idea, believed in me and
started to follow our lead. We spoke for hours on processes and pro-
cedures that could help ramp up our production, as the community
looked on and wondered what we were doing and was this going
to work, and quite frankly, they were not the only ones.
But we did it, and we started to get our feet under us. Things
started to get easier. Orders started coming in, first 10,000 pounds,
then 40,000 pounds, then standing orders for 80,000 pounds. We
started to feel that we could pull this off and that we were starting
to gain ground that we lost the summer before.
We are currently processing 10,000 pounds of fish a day. We sell
to the Maryland Food Bank, the Capital Food Bank, and we are
helping to feed people in our community with food insecurities. We
are helping to give kids food that they can have on the weekends
when they are not at school, and providing dozens of fishermen
with market for their catch that they did not have before. We have
been able to keep the price of the fish high and stable, ensuring
that the fishermen get fair prices for their catch and are com-
pensated fairly for their hard work. We send catfish overseas to
feed our troops and are working with a handful of other countries
that are now interested in our product.
Out of everything that I have done in the seafood industry,
whether it was diving for oysters or fishing 900 crab pots a day,
this has by far been the most rewarding, and it shows the most po-
tential for growth.
As I said earlier, I could not have done this alone. Whether it
was Cassandra that helped me navigate the county or the staff
that looked at me wide-eyed when I told them our plans to cut fish,
they all believed in my vision, and stuck by our side.
But we are not out of the woods yet. Unfortunately, cutting
15,000 pounds of fish a day will not solve the blue catfish problem,
but we are not finished either. We need to get with the 21st cen-
tury and get equipment that we can ramp up our production so we
can meet the demands of our customers, allow us to hire more em-
ployees, as well as help save our ecosystem and our crab population
at the same time. This will require more time and investment to
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achieve our goal, but at this point we have no choice. We will ei-
ther sink or swim in this project.
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One of the questions I was supposed to answer is what everyone
in this room can do to help. I usually do not like asking for help
unless I am asking Cassandra for it. But I would like to be part
of the discussion when it comes to releasing the USDA requirement
of the processing. Getting rid of the USDA can have a negative im-
pact on our business. The USDA requirement allows us to sell our
product to the military, the food banks, the prison systems, the
school systems. Without this we would not be able to sell our prod-
uct. On top of that, USDA gives grants and loans that help us grow
our business.
We have an opportunity to work with the USDA, maybe chang-
ing the regulations on catfish, putting them into their own cat-
egory, away from meat and poultry. This would loosen the rules
but would still result in a safe product for the consumer as well
as keeping us eligible for Federal assistance that the state is going
to need in order to grow this industry.
I am honored to be here and to be given the opportunity to
speak. I am looking forward to the questions, and I want to thank
everyone, and I appreciate you guys supporting the fishing commu-
nity. Thank you.
[The prepared statement of Mr. Hargrove follows:]
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Chairman CARDIN. Thank you very much, not only for your testi-
mony but for what you are doing to help our community.
Ms. Wolf.
STATEMENT OF ROXANNE WOLF, PROGRAM DIRECTOR,
SHORE GOURMET, DENTON, MD
Ms. WOLF. Thank you. Senator Van Hollen, Chairman Cardin,
Congressman Harris, it is an honor to actually be here to talk
about—it is really interesting. I am supposed to be here to talk
about converting poultry houses, but the Shore Gourmet bus, we
worked on blue catfish. It is a system down here, and that is what
I am here to talk about today, networking, and how we need to net-
work for small business to somebody’s skill set, to somebody else’s,
can get a better assembly line growing so that it can grow and that
it can be put out to market.
As Governor Wes Moore has said recently, Maryland is asset-rich
and strategy poor. I hope to address some of this in the discussion
on Maryland’s two economic drivers, agriculture and seafood, and
agriculture, of course, is a major driver throughout the United
States. So I feel like I am speaking for all farmers today.
When I first took on the role of Project Manager for Shore gour-
met, the research is looking for value-added products and economic
development drivers was eye-opening. At my first board meeting of
Shore Gourmet with Beth Brewster, Executive Director of Chesa-
peake Culinary Center—and she is my sister too, by the way—and
with Scott Warner, Midshore Regional Council, there were a few
things that stood out. I come from pharmaceutical. You have got
to research it before you take a look at what you are going to do.
So what were some of the issues? Farmers want to farm.
Watermen want to fish. That is it, right? That is. Processing, ag-
gregation, and adequate storage through freezing, dehydration and
freeze-drying were not sufficient for the demand. There was a sys-
temic void from harvester to end user in the private sector and gov-
ernment entities. Domestic products were few and far between in
profitable products like specialty mushrooms, herbs, and other
nutraceutical crops. An onslaught of products was coming from
Asia or South America. Consumers prefer, and will pay for, domes-
tic and local products that we can grow here.
There was not a central internet platform for large business.
Maryland’s Best is now being remodeled to address this issue, but
somebody needed 400 acres of oregano. There was not a button for
me to hit so that we could get a bunch of farmers together to say,
‘‘Can you bid on this?’’ But I wanted contracts, so that is how that
started, that we needed something that was more, how do we get
a lot of small businesses to be able to push a button and be able
to be able to address that. And every state should have that. Some
states do.
There was not a group of farmers that worked together to brand
a niche crop. If you think about Maine, Maine blueberries are all
over the place, Wisconsin cheese, Georgia peaches. We have got to
brand Maryland, and each state should brand what they want, so
you are looking forward to having that product.
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The threats to our farmers, when we were taking a look at it,
some farmers were losing their contracts or they were being mini-
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mized with the poultry and nursery industry. That is a big problem
in Maryland. Farmers need help in changing their business model
to diversify and bring innovation and technology into their farms.
Climate change—climate change. Invasive species consuming tradi-
tional Chesapeake seafood. During COVID, lack of regional fresh
and stored product and protein came to a crescendo.
The cost of farming has increased with shortages and the trans-
portation to get staples like equipment, feed, and fertilizer. With
all that is going on in Russia and the Ukraine, we have a fertilizer
problem. But quite honestly, we can compost blue catfish and that
can be part of the solution to that, by the way. Silos exist between
the sectors of the system to get profitable, diversified harvest to
market both domestically and internationally.
Several projects that Shore Gourmet is working on highlight the
need for developing a strategy rich in a systems approach to devel-
oping and expanding small business. Today we will talk about va-
cant poultry houses.
Controlled Environment Agriculture—so we are not just talking
about poultry houses. When we took on the project it was a pilot,
but controlled environment agriculture, because of climate change,
is a wave of the future. But also, what are we going to do with
these poultry houses? We have over 1,000 just in Maryland—that
is not Delmarva, just in Maryland—where they have where they
have lost their contracts and these buildings are still in good condi-
tion.
Maryland was having a little bit of an issue with it initially.
They did not want to certify them to do anything else. So we
worked with University of Delaware and actually have a protocol,
which I am happy to send to you, from University of Delaware, how
to abate the bacteria from that poultry house to make it a usable
site. We were really fortunate to be able to get a TEDCO grant
that allowed us, after that, to be able to—what can we grow in
their pilot?
So we just got done with the pilot. What we did, raised-bed agri-
culture. We did hydroponics, aeroponics, and we did aquaponics.
And we are successfully growing spirulina, which is a huge
nutraceutical, that primarily is coming from overseas, the proc-
essing practices over there are questionable.
So with that we need to really start taking a look not just with
the poultry houses—and poultry houses can be a lot of things. But
I am hoping we can take what we did in the poultry house—malls,
greenhouses, any space that is vacant, we should be growing in, be-
cause I think we have seen—we also have a food pantry—we were
not resilient at all. We were very fortunate to be sealing meals for
over 2,000 folks in Carolina County because we had started doing
some of that for some of our schoolchildren.
But the problem was because we did not have storage and we did
not have dehydration, we generally try to use as much local prod-
uct as possible business farmers are our consumers. The working
poor, when we take a look at the working poor, the county that I
am working in, it is 29 percent working poor. A lot of them are
farmers. And so what are we going to do to be able to help them?
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It costs a little bit more to have a local product, but certainly
more nutritious, and the fact that our county was able to serve
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2,000 meals, five days a week, to seniors and children, if we would
have had local product how could we have helped our local busi-
nesses at that time? We kept 42 cafeteria workers employed during
that time, when everybody else was laying their folks off, because
they were sealing meals for our community. If we just would have
had more local product, it would have been beautiful if it would
have had more storage, more aggregation, more distribution, but
that is a problem that we continue to have here.
So developing these aggregation/processing centers with drying
capabilities for both produce and for fish I think is critical. We
need more adequate temperature-controlled storage through either
government facilities or the private sector. Financing, rebates, and
avenues to pay for these conversations to controlled environment
agriculture. Energy conservation programs that address the high
energy costs that farmers are experiencing in these buildings. That
is a game-stopper right now that we have found with the pilot, en-
ergy conservation. A lot of these farmers have lost their contracts
are not in financial good standing. So what do we do to be able to
help them to be able to do that and grow a business?
Aligning products with government and institutional buyers. I
know with the blue catfish we initially had a little bit of a problem
with that, but how do we have USDA products that are just on pro-
curement and could be sold out? Why do we have to find these peo-
ple? It should be an easy kind of a thing for us to sell to the mili-
tary or to be able to sell to institutions. Developing a system to
brand certain products, and maybe like with Maryland, maybe we
do become ‘‘Maryland made or grown’’ like with specialty mush-
rooms. Maybe we could become the nutraceutical capital of the
world. Would that not be a beautiful thing, because let’s face it,
food is medicine. Kevin Atticks, our Secretary of Agriculture, is
definitely into that, and we have got to have more nutritious food
because part of the problem is we know we have a problem with
the soil, and what are we going to do about that? We are not get-
ting as many vegetables as we did before because of the soil make-
up.
And what I really found was, when we have a problem, we need
to start looking at it as an opportunity. If we have a problem like
a poultry house or we have a problem, we have saltwater infiltra-
tion that has grown by two times, 2013 to 2017. We can grow crops
there. There is a multitude of things. But we are always reactive
and not proactive for our farmers. How are we going to help them
address those issues but also keep our communities sound and be
able to be resilient with food?
We were not food resilient. I have a backpack program with 700
kids. This is no joke. When you cannot get ramen noodles for 19
cents, there is a problem. But we could not get fruits and vegeta-
bles for our kids. So it was a huge problem locally to be able to get
those products, because we are transporting so much in.
Shore Gourmet has worked with the farmhouse in Ridgely—and
VerLina is the spirulina name for that—to execute the bacterial
abatement and grow in modalities for different crops. It can be
done, but we have to get farmers to start thinking a little bit out-
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side and help them to show them the way to say, ‘‘If you are going
to grow spirulina, it is going to go to this aggregator/processor, and
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26
then it is going out.’’ And that is part of the system’s problem that
we have.
In conclusion, Maryland has a wealth of products and produce
that can be an economic driver for small and startup businesses.
Being proactive with solutions to problems like vacant space, salt-
water infiltration of farms—crops can be grown—and invasive spe-
cies can turn into profit centers. Let’s not look at it as problem.
Federal and state agencies can be part of the solution in developing
strategies between small business, the private sector, and state and
Federal Government to develop a systems approach to developing
and expanding entrepreneurs in profitable harvests on land and
sea. In addition, address food resiliency in a profitable way to cre-
ate jobs, new businesses, and provide consumers with the products
that they need.
Thank you so much for having me. It has been very exciting to
work on these projects. We have seen some of the problems and are
trying to come up with solutions, but it would be really nice if, like
I said, with the saltwater thing we have got to start reacting to it
now. The blue catfish were behind the times. The controlled envi-
ronment agriculture, we have got to start converting your malls,
even whether it is urban or rural. So hopefully we can start being
a little bit more proactive and not reactive.
[The prepared statement of Ms. Wolf follows:]
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Chairman Cardin. Thank you for your testimony. You have given
us a lot of food for thought.
Mr. Loeffler.
STATEMENT OF RICHARD ‘‘RICH’’ LOEFFLER, BUSINESS CON-
SULTANT, MARYLAND SMALL BUSINESS DEVELOPMENT
CENTER, CAMBRIDGE, MD
Mr. LOEFFLER. Thank you, Chairman Cardin and other members
of the Committee, Senator Van Hollen, House Representative Andy
Harris. I thank you for allowing me to share some thoughts that
are coming from the perspective of a former small business owner.
I had been in business and working with the Maryland Small Busi-
ness Development Center Network for a number of years as I was
in business. So I got to know the programs and some of the people
in it.
A little bit about me, though, before I go farther. I was born and
raised in New Jersey and moved to Maryland, on the Eastern
Shore, for business purposes. I eventually became a partner in the
venture and spent 20-plus years as a business owner. When I chose
to sell out my shares we had about $50 million dollars in annual
sales, we were employing about 250 people, and at that particular
moment we were right in the process of buying out our biggest
competitor. They were going to triple the size of the business. The
business remains today a major supplier of metal conveyor belting
on the world stage.
Since ‘‘retiring’’ as a small business owner, I have spent over 20
years now working with the Maryland SBDC. I have worked with
many businesses that showcased great resiliency in the face of ad-
versity. One that comes to mind is a restaurant that was doing ex-
clusive dining room service when the pandemic turned their world
upside down. They quickly pivoted and developed a takeout menu.
They worked hard to make it easy for their customers to place and
pick up their orders efficiently. They even created outdoor seating
that pioneered safe social distancing for those who still wanted a
restaurant service experience.
Another client I worked with that has shown the ability to pivot
is a distribution business that was struggling to compete with
tightening margins and large competitors taking more market
share in the region. Over several years, they worked on refining
their business model with ongoing counseling. They switched from
focusing on distribution to growing their fulfillment services and
add new product consulting. They also added some niche manufac-
turing to help grow their business revenues and increase their
margins. This business continues to engage with our services and
is constantly looking for new opportunities to grow and prosper.
In both cases, what helped these clients remain resilient was
they learned to pay attention to their business models through on-
going engagement with trusted, local counseling. They were work-
ing with someone who really understood their unique business
models and provided advisement that was professional and compas-
sionate. Each developed their own key success indicators in their
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business planning process and tracked performance to measure the
success of their strategies. It was a willingness by these clients to
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31
continuously learn and engage with the SBDC and other valuable
resource partners in the community that made the difference.
What can be done to make more rural businesses resilient? I
honestly believe investing in rural SBDCs is part of the answer.
We get to know our clients with individualized attention and can
provide the ongoing support that businesses need to grow. Our
counseling helps clients with limited financial education learn to
pay attention to their key success indicators. We also help them
think about contingencies in the business planning process, and we
understand the importance of developing productive relationships
with resource partners like insurance agents, banks particularly,
and other support relationships. Having someone who is not in-
volved in the day-to-day operations also gives them access to an ex-
ternal perspective that is invaluable to any business that hopes to
grow. Our services remain one of the best-kept secrets in the busi-
ness community. They just do not know who small business devel-
opment center are.
Another factor that is going to impact resiliency is access to
longer-term capital. The clients who have the resources to invest
in their plans to pivot are going to be the clients that succeed. As
the saying goes, lenders will gladly give you an umbrella when it
is sunny outside, but they will ask for it back the moment it starts
to rain. Businesses that are facing challenges can rarely get tradi-
tional financial support or support from federally guaranteed loan
programs. Businesses in these situations are often confronted with
predatory financing with high interest rates and no options for pre-
payment or restructuring. Businesses that fall into the trap of sub-
scribing to these types of financing tend to be the businesses that
will ultimately fail.
Replicating some of the lessons learned from successful Economic
Injury Disaster Loans, EIDLs, during COVID may be helpful. So
many of our clients were saved during the pandemic by being able
to spread their investment over a longer period and at a reasonable
interest rate. There was also a relatively easy underwriting process
for EIDL loans, as the country worked to recover from the pan-
demic. Yet now this capital is only available if there is a disaster
declaration.
Small businesses that need to pivot are not always in regions
where there are official Federal emergencies declared. Further-
more, traditional EIDL loans have much tighter underwriting re-
quirements. Perhaps developing a rural loan product that is based
on similar income capacity as the COVID-era EIDL would support
greater resiliency for businesses that need to develop a pivot strat-
egy.
Thank you again for letting me share this testimony and for your
efforts to support rural businesses.
[The prepared statement of Mr. Loeffler follows:]
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Chairman CARDIN. Mr. Loeffler, thank you for your testimony.
The reason I really enjoy doing regional hearings, it allows us to
take a case study and really drill down and see how we can apply
the policies we do in Washington to deal with the practical chal-
lenges. And here we are dealing with small businesses, and rural
communities and their resiliency, and I think the Eastern Shore
really does present to us a good case study for how to do this.
Mr. Hargrove, I want to thank you for the motivation for the
start of your business. It was the juvenile crabs inside of the cat-
fish that motivated you that we had to do something to save the
crab population in Maryland. And as the mayor and I went to
stores today, we went to Love Your Mama, which shows you that
sustainability is an important goal.
I think you said this, Mrs. Wolf, that you want to have invasive
species profit centers, and what we have is sustainable products
profit centers. Or went to Jun & Juice, and we saw where we can
have farm-to-food, healthy foods as a sustainable profit center. So
this is what small businesses do, and I just really want to under-
score that importance.
I want to talk about catfish for one moment, and I appreciate
your comments on the USDA. Our challenge with the USDA is that
they have no experience in dealing with wild-caught seafood. They
do deal with the catfish from farm-raised but not with wild. They
do not have that experience within the Department. So that is one
of the reasons we have been concerned about the regulatory frame-
work, and I think your suggestion for separate categories is really
a very strong point.
Yes, we want to turn it into a profit center, but we also recognize
there is a cost of getting rid of invasive species. We saw that with
the nutria population here on the Eastern Shore, where we were
able to eradicate the nutrias, but there was a significant invest-
ment of resources in order to do that. So it seems to me if there
is some way we can combine the resources for eradication with
marketing the product for economic viability, attack it from both
sides, we can make stronger progress.
I just really want you to talk a little bit more about the profit
center here and what we can do to make it a more profitable indus-
try. I want to thank Steve Umberger. He had catfish last night for
dinner. How do we promote that more often?
Mr. HARGROVE. Yeah, certainly. So right now, currently, we are
doing a deal the old-fashioned way. We are cutting fish by hand,
with knives, like you have seen it done for hundreds of years. If
you go on the internet and you look up ‘‘processing plants for fish’’
you would think that you were looking at a NASA building. There
is equipment out there that can allow us, where we are processing
probably around, I would say, 1,500 pounds an hour, with some
proper equipment we can bump it up to about 6,000 pounds an
hour. And I think this is one of the ways to get the cost down on
the fish, that can bring up the profit.
Here in Maryland, catfish is kind of a new fish. If you put catfish
on the menu next to rockfish, 90 percent of people are going to eat
the rockfish. But I went to school down in North Carolina, and I
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can tell you that people down there would rather eat the catfish
than the rockfish.
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So although it is a new fish for the menus around here, people
also associate the fish with being cheap or not a good eating fish.
Using the words ‘‘sustainable’’ and ‘‘wild-caught’’ are better than
‘‘invasive’’ is what we have found out. [Laughter.]
Mr. HARGROVE. Nobody wants to eat something invasive.
‘‘Invasive’’ sounds like ‘‘foreign,’’ and people do not want to eat a
foreign fish. So I think the marketing technique can be altered in
different ways that we can also get more money for it.
I sell catfish to the mom-and-pop store down the road that makes
a really good fish sandwich. I also sell it to Perry Cabin. We have
dry-aged it. We have put it on the high-end menus. So it is a very
diverse fish. But the ways of marketing, we could certainly come
up with ways that it could be more profitable for everybody. The
more that we can get for it on the back side, the more we can pass
the profits off to the fishermen along the way.
Chairman CARDIN. I am sure that Perry Cabin is charging a lot
more than that store. [Laughter.]
Ms. WOLF. Right now, just to let you know, we have taken the
blue catfish and we are trying to get it a recipe approved by the
USDA so that it can be served in all the schools. It is sitting on
their desk right now. We have to call it a seafood cake, not a blue
catfish cake. We actually had our kids test it, but they said, yeah,
it has got to be a seafood cake. So we are calling it a poor man’s
crab cake.
Chairman CARDIN. The problem with the USDA, as we see it, is
that they do not know how to handle this. So they are thinking
about the foods that they regulate rather than wild-caught seafood.
Ms. WOLF. Right. And so that is why if we can get it approved
for schools, we have tested it in Maryland schools and people are
ready for it, and so some other value-add kind of things by smoking
it, people down South will buy it. And so we are looking for a lot
of value-add to what Nick is doing. It is getting somebody like a
Nick, getting it to a value-add, and then making it much more prof-
itable for everybody along the food chain.
Chairman CARDIN. Mr. Loeffler, you mentioned the capital avail-
ability during COVID, the Economic Injury Disaster Loan program
eligible. It took a congressional act to make it eligible to pass. It
was the first COVID-related piece of legislation for small business
was to make it eligible for EIDL loans as a result of COVID–19.
So we do not really have a good disaster program to deal with the
unpredictable. We do for fires and things like that but not for the
unpredictable things that are occurring.
So you mentioned for rural areas, one of the things that we have
been looking at, there are some direct loans under disaster avail-
able by SBA, but perhaps trying to find a niche for rural smaller
loans under an EIDL-type program might be a way where we can
start looking at a different way to handle the gap that you see.
Talk a little bit more about this gap.
Mr. LOEFFLER. Well, what typically happens is that when the
small business owner goes out to get a loan he is unable to get it
because of either his size or his capacity to be able to pay it back
in a short period of time. What we need is a place that we can go
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that says, ‘‘Okay, we know this is not the rocket science stuff. This
is down to earth. How do we make this happen for you?’’ And it
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might mean that we look at collateral a little bit differently for
them. It might say instead of saying it has got to be 110 or 150
percent collateralized maybe we have got to say we can live if only
75 percent of it is collateralized.
But it is the idea to make the money available to these addi-
tional people that typically are not going to be able to borrow
money from some of the other existing larger banks. Again, rural
communities, the banks treat people differently, but these new re-
quirements that have come out in the last number of years, how
much capital the banks have to have for the amount of loans they
are going to have, that has made it difficult for some of the smaller
banks to continue lending to our clients who are working in these
businesses developing.
It comes down to are we able to get it, it is going to be X amount
of time to do it, and then you are going to have a very short period
of time to pay it back. They need longer terms. They need the abil-
ity to just get some money. They do not have the cushion that the
other businesses, maybe that are large-scale businesses, have.
So one of the things that I personally ask our small business
owners to get, if they are going to be in business I say, ‘‘Get in
business, have your business going, but let’s also get a line of cred-
it.’’ I cannot tell you when something is going to happen, but I
know from meeting with businesses, from having been in my own
business for quite a number of years, if you do not have something
set aside when that whatever it is that is going to hit hits, you are
really scrambling. So let’s get some of this set up in advance, get
banks that are willing to work with these people, and let’s get some
of that money out to them so that the businesses can stay here and
grow.
Chairman CARDIN. Good advice. Ms. Vanhooser, you talked about
adapting because you are going to have to adapt to unforeseen
issues that are going to happen, as Mr. Loeffler was talking about.
How strong are our resource partners in helping small businesses
plan for the unexpected?
Ms. VANHOOSER. So it is sort of an individual case. You know,
individually I work with the Small Business Development Center.
I refer clients to them. And we work on those things where we lay
out the business plan and include that in the business plan. I do
not want to throw any partners under the bus, but I would say
that since COVID, grants and loans now require resiliency to be
addressed. They require that for government organizations, the
EDA requires it. So we are now beginning to really think of resil-
iency as something that you need to plan for. I think we are begin-
ning to do a better job at that.
I think what is really important for our community, for busi-
nesses like Nick, is that it continues to build on our seafood indus-
try. It gives our watermen additional work to do and helps our cul-
ture and it builds the fabric of the community. The more we can
help our businesses plan for unexpected things the stronger we are
in that and the better our communities are.
Chairman CARDIN. Thank you. Senator Van Hollen?
Senator VAN HOLLEN. Thank you, Mr. Chairman. I thank all of
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you for your testimony. I have learned a lot, and I appreciate all
of you bringing your experience to bear on these questions.
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And I have one set of questions, I think, for Ms. Vanhooser. We
are both CVH, as we discussed.
Ms. VANHOOSER. That is right.
Senator VAN HOLLEN. Ms. Wolf and Mr. Loeffler, and then I do
have a question for you, Mr. Hargrove.
Ms. Vanhooser, in terms of the array of Federal programs—you
have got the SBA program, loan program, as well as EIDL, you
have various programs under the Department of Commerce, mostly
grant programs like EDA programs. You have the Department of
Ag programs. All of them have certain focuses. I guess my question
to you is, here on the Eastern Shore, in your experience, what have
been the most useful Federal programs and do you have ideas, as
Mr. Loeffler suggested, as how we might sort of reshape them? I
am not talking right now about the array of COVID programs, al-
though there may be some lessons we can learn. In my talking to
people around the state, including the Eastern Shore, those pro-
grams were effective at accomplishing the goal. The PPP program,
several iterations we worked through, but these were very helpful
in helping bridge that terrible period.
But as you look to the future, which of those Federal programs
do you find most useful for your purposes, and would you change
them in any particular ways? I have the same question for Ms.
Wolf, and maybe Mr. Loeffler, you have answered with EIDL. But
if you have any other things I would appreciate it.
Ms. VANHOOSER. So I think our businesses are not looking for a
handout. They are looking for a hand up. So the programs that we
use the most are SBA loans and Rural Development for the energy
programs. We refer case by case. I think, programmatically, for us,
we could use some additional assistance in that. The EDA loans for
tourism, for example, under the ARPA funds, we were able to ac-
cess those through the state to have additional product develop-
ment and programming for tourism, and that was some flexibility
that we have never had before. So I think that if I were going to
change anything I would look at that.
Senator VAN HOLLEN. Okay. Thank you. Ms. Wolf.
Ms. WOLF. Well, for the folks I am dealing with with the poultry
houses, many of them are not in good standing. And as a matter
of fact, working with the TEDCO grant we had to go to another
farmer to work with this one because they were not in good stand-
ing. They want to keep their businesses, so how do we take particu-
larly contractual folks—my whole thing with, hey, if you are going
to lose your contract then the chicken industry, abating bacteria is
about $50,000. Somebody who is losing their contract cannot afford
that. So can we go back to the chicken folks and say, ‘‘Hey, you are
going to, but you have got to get rid of this because it is an envi-
ronmental issue afterwards.’’ So should they take on some of that?
Because some of the contract loss, there is a reason. It is very
easy to get out of a contract with the chicken and the nursery in-
dustry. So I think the thing is that also I know that when we do
the value-add, they have to have just a whole—send them to Cas-
sandra to how do we get this thing started.
But also, with the processing, to be able to say, hey, let the gov-
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ernment get involved with this invasive species, sustainable, wild-
cut invasive species, and be able to say we have a way of doing it
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down south with the farm, with the catfish farm, and they have
those and they are just cranking them out. We have got to start
taking a look at doing some of that up here for not only the blue
catfish but also dehydration, freeze drying.
Other countries are doing that. My husband is Japanese and I
am in Japan a lot. A lot of freeze-drying. A lot of dehydration so
that, therefore, you can just rehydrate because they do not have all
the freezing storage capacity. We can do it here, but we have to be
able to have it a seamless thing where a farmer is going right to
the processor, getting paid, and moving on. It cannot be all this
waiting for money and things like that.
So I think for me that is—we have to come up with a better net-
working systems approach.
Senator VAN HOLLEN. Thank you. Mr. Loeffler.
Mr. LOEFFLER. I would think as we move forward if we could do
something that was especially prepared for the rural areas, that
would help us tremendously. Again, we have got somebody, a mom-
and-pop shop in a rural area, and maybe they are going to employ
five or six people total over the span. When you go to the major
metropolitan area you are going to have a business that maybe is
coming in, because of transportation, numbers of people, they are
going to employ 200 people. What do we know today? How do you
find people? If you can find six in the rural community, maybe that
is a great way to do it. And you have got somebody here with six
people, it is going to be an ongoing business, it is going to act dif-
ferently, it is going to work differently.
If you can build a 200-person business and you can take, instead,
a 5- or 6-person business, yet they are still employing people, mak-
ing themselves money, they are moving this forward, you can make
some things happen, and that is what I think we are trying to
work for is get it to the people that need it, where it is not quite
as accessible as it is when you go into that mainstream community.
Senator VAN HOLLEN. Got it. Understood. Thank you.
Mr. Hargrove, thank you for all you are doing on the blue catfish
side. I think you described the situation as I understand it very
well. So you raised the question about the Department of Agri-
culture process, and how you are working with them. And I guess
one question is, vis-à-vis Department of Agriculture, and as I know
you know, FDA, is there a benefit into streamlining the review
process somehow, whether it is the way you are saying it, under
the Department of Ag, where you have a special provision for blue
catfish or whether you move it to FDA? To what extent does that
slow down the process compared to the lack of investment?
It sounds like you are like ‘‘the’’ guy right now, and as I under-
stand it you said that we are catching about 70,000 pounds of blue
catfish a day. Do I have that right? And that right now you have
the capacity of processing 10,000 pounds of catfish a day, so that
is 60,000 pounds of catfish that are not being processed. You men-
tioned these new machines that could do up to 6,000 pounds per
hour.
So my question is in terms of increasing the catch of blue catfish
and making them more available and taking more of the catfish
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out of the bay so that crabs can flourish more, what is the major
hang-up here? Because part of the story, at least as I understand
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it, it was the delay caused by the Department of Agriculture’s re-
view, and part of it is just the fact that we do not have all the cap-
ital machinery in here to process. Can you just talk about your vi-
sion for how we can really address this issue, because I think all
of us have come to the conclusion that we have to eat our way out
of this problem.
And I agree with you on the branding. It like whoever named the
snakefish, you know, we do not want to eat snakefish. But just in
terms of accelerating our catch of blue catfish, processing them on
time, getting them to market, what is our major bottleneck right
now?
Mr. HARGROVE. Yeah. So certainly I work with the FDA as well
as the USDA. The FDA does all my oysters and crab processing,
and I have all the faith in the world that they can obviously regu-
late the catfish processing safely enough. But what comes along
with it, I hemmed and hawed, and I believe Mr. Andy Harris prob-
ably heard from me in the beginning when I was pushing back, try-
ing to get my facility USDA approved. The regulations are so much
stricter with the USDA. I could not have a piece of rust in the
building the size of a pencil eraser. So it cost us hundreds of thou-
sands of dollars to convert the existing packing houses into some-
thing that meets the requirement of the USDA.
That is something that not everybody can do. It is definitely
going to limit the amount of people that can get into the processing
side of it.
There is no shortage of catfish. Like you said, I have had fisher-
men that catch 70,000, upwards of 100,000, one fisherman a day.
But he begged me, ‘‘Send two trucks. Send three trucks. Send four
trucks.’’ And I said, ‘‘Put 10,000 pounds on my truck and I will
come back tomorrow,’’ because you can only handle so much.
I am only one of two processors here on the Eastern Shore. I
think there is a small handful of ones over on the Western Shore,
larger companies, with more capital. We are not limited to where
we can sell this fish. This fish is processed and frozen, has months’
worth of shelf life on it, and quite frankly, it is a very popular fish
on almost every continent on the Earth except around here. People
want the fish.
I work with the USDA inspector. She is at my facility every
morning before I can process. They do a walk-through of the facil-
ity, make sure it is clean, and then they stay there while I am
processing the fish. And we talk all the time. She was out one time
and we had a poultry guy come from one of the chicken plants, and
he came down, and he said, ‘‘What are you guys doing? We need
to take temperature samples every hour from every fish-cleaning
station,’’ and we were like, if that is what we have to do, we will
do it, but we have not been told to do that up until now.
We got audited by the military, and they take a piece of the fish
and they do nutrient tests on it. They look for any kind of harmful
chemicals or something in it. And the inspector came back and
said, ‘‘What kind of catfish is this?’’ And of course, you know, the
company I sell to was like, ‘‘Well, it is wild-caught blue catfish.’’
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They said, ‘‘This is the best catfish we have ever tested.’’ And they
were used to buying fish from the farms down south.
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So we have a product that cannot be compared to a channel fish
that is grown in a pond with millions of his colleagues. [Laughter.]
Mr. HARGROVE. And so although it is labeled a catfish, it is cer-
tainly not a catfish that is raised in a pond. So really, after being
in the business now and going through all the hoops of the USDA,
I think it is important that we have that on it. For one, when you
are selling a fish overseas, the U.S. brand is very popular. People
consider the U.S. quality, products, and it gives them a sense of se-
curity, especially when it comes to a catfish, where people, in the
past, they have a fish over there that is very similar. It is called
swai. And, you know, who knows if the government ever tested any
of that fish what would come up because there are no regulations
on it, and quite frankly, they do not have the consumer confidence
that we have by putting the USDA label on it.
So I think really the key to it is—and I speak with my inspector
about it all the time—is maybe having a separate category within
the USDA that allows there to be some flexibility. We do not get
salmonella on the fish. We do not puncture the guts or the bellies
of the fish like is done at slaughterhouses. But as of right now the
only regulations that they have on catfish are coming from these
cessponds from the south, and we really think that we should be
in a category of our own.
And even the USDA inspector will agree. They take a sample of
my fish every week and send it off to get tested, and we have never
had it come back with any pollutants or antibiotics or E. coli. It is
a list of Latin names a mile long on there that they test for.
So I think that we really stand alone, and I think that we should
have our own category with the Department. And I think that the
Department does. It offers a lot of assistance that sometimes the
state cannot, you know, with the USDA. If you look at the loans
and the grants that are available through the USDA it is a lot
more. It is refrigeration, it is trucks, it is low-interest loans, and
a lot higher value on the loans.
So I think there is a middle line there that I think that we can
work with the USDA. And then I had another option, that maybe
it is not important that everybody is USDA. Maybe some facilities
can be USDA and some can be FDA. But I know for me personally
I would like to keep the USDA certification on my box because it
opens up the doors and the avenues that I need in order to sell that
much volume of fish to be produced.
Chairman CARDIN. Thank you. Thank you all. Congressman Har-
ris.
Mr. HARRIS. Thank you very much, and I do want to thank all
of you for testifying today, and again to Senator Cardin for calling
the hearing.
You know, Ms. Wolf, I think you hit it on the head. We have got
to brand things. Value-added is very important. Sure, look, we are
good. We are pretty efficient at raising commodity poultry, but that
is not the only thing of economic value on the shore. I think brand-
ing goes a long way toward that. But we do have Maryland crab-
meat. I mean, if you go to other parts, people who have been to
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Maryland or that part of the country they do look for things like
that.
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Ms. Vanhooser, let me just ask you a question. With the eco-
nomic development teams in various counties, they are important
because I think a lot of smaller businesses do not know how to deal
with, in this case, a Federal agency. So I was in Princess Anne last
week, met with a poultry processor, a new poultry processor on the
Shore. I did not really realize there was one. But their niche—talk
about branding—is halal processing. So they are doing about 7,000
pounds of chicken a day. They can do a whole lot more. The gen-
tleman came up to me and said, ‘‘You know, we had that program
in the ARP for small processing plants. We sent our paperwork in.
We have not heard back.’’
So how often does this happen that, in fact, what you are run-
ning up against is you have small businesses, and look, they do not
have—and I always joke about this with community banks. You go
to a big bank somewhere, they have a whole floor of people dealing
with regulators, like literally a whole floor. Fifth floor? Yeah, that
is our regulatory floor. You go to a small business or a small com-
munity bank they do not have anybody with expertise in that. Is
that what an organization like yours brings to the table, the ability
to help people interact with agencies that can help them?
Ms. VANHOOSER. Well, it is, that connection to resources. It is not
just money. That is people resources as well. So if we have a prob-
lem that we cannot solve we will call Kimberly Kratovil or Alyssa
Hastings or Mike Arentz or Keith Graffius, and we call your peo-
ple. And I would say the bulk of the calls that I get from a business
begin with a problem of some sort. So Nick needed help with some-
thing and he called me. Now we work together. I have him on
speed dial, and he has me on speed dial.
But as you say, the bulk of them begin with a problem, and so
I begin to work my network to see what we can find to resolve that
problem. And a lot of times it is an agency, either a state agency
or a Federal agency.
Mr. HARRIS. Yeah, and I hope we can do that better, because
again—and Mr. Loeffler, I think you would probably agree—small
businesses really have to deal differently and have very different
resources to deal with it.
Mr. Hargrove, obviously, blue catfish is a huge problem. Just a
question about the machines because I am curious about that be-
cause I heard about them. But my understanding is they work for
the farm-raised because they are all the same size, more or less.
But do the new machines—because when you have wild-caught you
know there is a range of sizes. Do the new machines actually proc-
ess a range of sizes as well?
Mr. HARGROVE. Well, sure. There are really two different size
groups that are an issue with the machines. The catfish is much
more of a horizontal fish, which means that the head is kind of hor-
izontal, where a lot of the processing machines are made for
vertical fish, and so it is a separate machine. There is a company
called Marel that makes the equipment, and they deal with a lot
of larger processors in the south.
So there are two separate machines. One machine can handle the
1- to 2-pound fish, and then the other one can handle 2- to about
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a 15-pound fish. And so there is a wide range. We have had fish
up to 60 pounds in our plants before. They would still need to be
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hand cut or used for other things. Like you said, all of our waste
goes to dog food processors. A lot of the heads will go down to the
south for the crab industry down there. There is even a company
in Florida that we are sending fish to, to make fertilizer. So it is
like a zero-waste plant really. Just the blood that goes down the
drains is the only bit of the product that is not being used.
But yes, there is equipment out there, to answer your question.
There are headers and gutters, there are filleters, and there are
skinning machines. And one of the most important ones is the por-
tion machine because a lot of these contracts will give you a two-
ounce variant in where they want on, say, 4- to 6-ounce, or 6- to
8-ounce, and you have to be within that measure. We are currently
doing it by eye right now, and it takes a special person to sit there
all day and decide where to cut a fish to get a 4-ounce and 6-ounce
portion out of it.
Obviously, there are some other pieces of machinery that you are
going to need to get into retail. There are skin packagers that put
a slim layer of plastic over the fish and makes it more appealing
to the eye. So there is definitely more equipment out there that can
also make different products for you as well.
Mr. HARRIS. Well, thank you. You know, part of resilience is ac-
tually to keep our companies viable, because you have got to be via-
ble to be resilient. Do you still process crabs?
Mr. HARGROVE. I do not process crabs.
Mr. HARRIS. You do not do it anymore. But you are familiar with
the people in your industry who have problems with getting H–2B
workers, right?
Mr. HARGROVE. Oh, every day.
Mr. HARRIS. And the disappointment during COVID was that it
was not COVID that caused those plants on Hooper Island to close
down. It was the lottery in H–2B, where a small business cannot
afford a year when they get no one, and the person across the
street gets everybody because they, quote, ‘‘won the lottery’’ which
the U.S. government ran.
How important are temporary workers to the economy—and you
all can answer this—the Eastern Shore economy, in terms of mak-
ing sure that we have the ability to get temporary farm workers
when we just do not have, because the labor supply and the work-
force is always an issue on the shore. How important is it that we
have access to temporary farm workers? Anyone of you?
Mr. HARGROVE. I am in the seafood industry, and a lot of my
friends do not get their pickers every year. And to me, it is insane
that we are allowing this to go on, and how can someone base a
business off of someone picking their name out of a hat in order
to make sure that they have people. And honestly, it really is
heartbreaking.
These people have been with them for dozens of years. They are
like family to you. When you spend more time with the people at
work than you do your own family sometimes in this industry you
make a very close bond with them. And I cannot imagine what it
is like for the people on the other end that are not allowed to come
here and work at the facility that provides for their livelihoods and,
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quite frankly, probably the families on either side of their house-
holds back in these countries.
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We are at the point where we do not even rely on the H–2B’s
anymore, unfortunately. It enables the growth of your company to
think that one day you are going to have your girls and then the
next year you are not. So we try to pick from the local help, which
obviously, as everybody knows, is getting tougher and tougher, es-
pecially the jobs that are required in the seafood industry. They are
not always the most glamorous jobs. You need real grit to get
through it sometimes. And without this problem getting solved, I
really wonder what is going to happen with the crab industry, es-
pecially.
Ms. VANHOOSER. And it is not just seafood. It also tourism. I
think we have come and seen Mr. Daniel in your office every year
and talk about this. The Inn at Perry Cabin, for example, has al-
ways counted on that type of labor. It is particularly prevalent in
Ocean City. So it is very helpful to the tourism industry for that
to be a reliable source. Also on a seasonal basis, it works well for
the seasonal workers. So it is important to tourism as well.
Mr. HARRIS. Thank you. And Nick, just one last question, which
I thought of as you were speaking. Wild-caught fish, in general, I
mean, the problem with the farm-raised is they do have issues with
quality. And one thing we did in the Agriculture Appropriations
Bill, it is suggested that wild-caught, invasive species might be
handled differently, but maybe wild-caught is the most important
part of that. And we will ask the USDA and perhaps the GAO to
look into whether or not the wild-caught, farm-raised distinction
might be one of the ways we might deal with some of those issues.
And I love the ‘‘sustainable, wild-caught.’’ It sounds so much bet-
ter than ‘‘invasive.’’
I yield back. Thank you.
Senator VAN HOLLEN. Well, let me thank all of you again, and
Ms. Vanhooser, thank you for mentioning Alyssa Hastings, who is
here, who is our eyes and ears on the Eastern Shore, mine when
I cannot be here, along with the representatives from Senator
Cardin and Congressman Harris.
Mr. Mayor, thank you and the council for allowing us to claim
the dais up here for a little while. It is very much appreciated.
Mr. TYNDALL. You are welcome every second and fourth Monday.
Senator VAN HOLLEN. Thank you. And this is bringing back some
memories during my college days. For two summers in a row I
went up and worked in Alaska in a fish processing plant on what
we call the ‘‘slime line,’’ slitting the fish. I worked my way up to
the iceman and forklift driver. But it is an industry that is essen-
tial to Maryland, and actually, speaking of Alaska, Senator Cardin
and I have teamed up with Senator Murkowski from Alaska and
Senator Sullivan from Alaska because when it comes to the H–2B
visa issue and seafood they have similar concerns and pressures.
So we are working as part of the farm bill, along with Congress-
man Harris, who has been working on this on the House side, on
the H–2B visa issue as well as the blue catfish issue. So we look
forward to continuing those efforts.
And let me finally thank, again, Ben Cardin, Senator Cardin, for
chairing this hearing and inviting us to participate. Thank you all.
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Mr. HARRIS. You may want to hire Senator Van Hollen. I think
he could cut the 4- to 6-ounces pretty easily. [Laughter.]
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Mr. HARRIS. Just from his prior experience.
Senator VAN HOLLEN. I will be there Monday with bells on.
Congressman Harris?
Mr. HARRIS. Again, thank you all for being here. Thank you all
for helping the economy of Maryland’s wonderful Eastern Shore,
and thanks to Senator Cardin for bringing this Senate Committee
hearing to Berlin.
Chairman CARDIN. Rural America represents about 97 percent of
the geography of our country, about 14 percent of our population,
and only 10 percent of our GDP. So Mr. Loeffler, your point about
targeting to rural communities is a very valid point and something
that we really need to do a better job in order to provide the eco-
nomic health. It has, by definition, been underserved, and we need
to target better our programs to help rural America. And I think
this hearing has helped us to understand that.
We are looking at legislation in the United States Congress. I
have already indicated that Senator Ernst and myself are looking
at a reauthorization of the SBA laws which would deal with many
of the subjects we are talking about here and could be a vehicle to
do some of the changes that we are talking about.
In addition, we have the farm bill that is coming up in this Con-
gress, and many of the issues that you have referred to are eligible
for consideration during the farm bill. Maryland is kind of unique.
We do not have a dominant part of the agricultural community
that is in the farm bill. Poultry, obviously, on the Eastern Shore,
is a major agricultural product. But we are in a position where we
have more smaller entities than most states do in the agricultural
field, so it gives us a chance to try to do what we can to help in
that regard.
I just want to put my other hat on for one moment on behalf of
the Maryland Federal Congressional Delegation because a lot of
the subjects we talked about today we have been united on. The
H–2B visa is a good example. Senator Van Hollen and Congress-
man Harris have already mentioned that. We recognize the des-
perate need for seasonal workers, and we recognize that also in re-
gard to the J visas. So we have been very much laser-focused on
trying to get some help. We were able to move the Biden adminis-
tration in some directions, not as much as we wanted to get done,
but part of the responsible is the United States Congress and pass-
ing laws to update our worker visa programs. So we are working
very much on that.
And then we are united in regard to small businesses. We recog-
nize that we have to do more. We cannot wait for the next unex-
pected challenge and say, ‘‘What can we do to respond?’’ We need
to have more permanent help to deal with what we know is going
to be coming down the road. And I think your testimonies today
help us to better understand that and targeting traditionally un-
derserved communities and the smaller small businesses. I love all
businesses. I love all small businesses. There is a difference be-
tween a small business that has 400 employees and a mom-and-
pop operation that is struggling and does not have the staff to deal
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with these challenges. And I think your testimony has helped us
in regard to dealing with those issues.
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45
Once again, I want to join my colleagues in thanking our four
star witnesses, the mayor, and for all of you being in attendance,
and with that the Committee will stand adjourned. Thank you all.
Mr. TYNDALL. Mr. Chairman, if you do not mind. Just before I
made an error. I missed and overlooked one of our attendees, Sec-
retary Riccio, former DNR Secretary. All the talk of fish, I would
be remiss if I did not thank her for her service as well, so thank
you.
And once we are done, if you do not mind, I would like to address
the crowd.
Chairman CARDIN. Sure. The Committee stands adjourned, but
I will recognize the mayor.
Mr. TYNDALL. Thank you, Mr. Chairman. Yes, a round of ap-
plause. [Applause.]
Mr. TYNDALL. Thank you for bringing this hearing to Berlin.
Thank you all for your stories today.
We also have out back, on your way out—this is the reason I
really wanted to get everybody’s attention—the Shore Gourmet bus
is downstairs. Take a look at that. They are doing a lot for Caroline
County Public Schools. I reached out to our superintendent, Lou
Taylor, and let him know it was out there as well. I think there
is a lot that can be done here locally, in Worcester, Wicomico, and
Somerset, bringing healthy foods to the children in the schools. So
take a look at that bus on the way out, and then thank you again
for bringing it. Thank you.
Chairman CARDIN. Thank you all. [Applause.]
[Whereupon, at 2:33 p.m., the hearing was adjourned.]
Æ
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