[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
                  AGRICULTURE, RURAL DEVELOPMENT, FOOD
                  AND DRUG ADMINISTRATION, AND RELATED
                    AGENCIES APPROPRIATIONS FOR 1998

========================================================================

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                              FIRST SESSION
                                ________

     SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG 
                  ADMINISTRATION, AND RELATED AGENCIES

                     JOE SKEEN, New Mexico, Chairman

JAMES T. WALSH, New York               MARCY KAPTUR, Ohio
JAY DICKEY, Arkansas                   VIC FAZIO, California
JACK KINGSTON, Georgia                 JOSE E. SERRANO, New York
GEORGE R. NETHERCUTT, Jr., Washington  ROSA L. DeLAURO, Connecticut
HENRY BONILLA, Texas                   
TOM LATHAM, Iowa                       

 NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

  Timothy K. Sanders, Carol Murphy, John J. Ziolkowski, and Joanne L. 
                       Orndorff, Staff Assistants
                                ________

                                 PART 3

                    MARKETING AND REGULATORY PROGRAMS
                        AND CONSERVATION PROGRAMS

                                                                   Page
Marketing and Regulatory Programs................................    1
   Animal and Plant Health Inspection Service Agriculture 
   Marketing Service
   Grain Inspection, Packers and Stockyards Administration
Natural Resources Conservation Service...........................  493

                              

                                ________

         Printed for the use of the Committee on Appropriations
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                       COMMITTEE ON APPROPRIATIONS                      

                   BOB LIVINGSTON, Louisiana, Chairman                  

JOSEPH M. McDADE, Pennsylvania         DAVID R. OBEY, Wisconsin            
C. W. BILL YOUNG, Florida              SIDNEY R. YATES, Illinois           
RALPH REGULA, Ohio                     LOUIS STOKES, Ohio                  
JERRY LEWIS, California                JOHN P. MURTHA, Pennsylvania        
JOHN EDWARD PORTER, Illinois           NORMAN D. DICKS, Washington         
HAROLD ROGERS, Kentucky                MARTIN OLAV SABO, Minnesota         
JOE SKEEN, New Mexico                  JULIAN C. DIXON, California         
FRANK R. WOLF, Virginia                VIC FAZIO, California               
TOM DeLAY, Texas                       W. G. (BILL) HEFNER, North Carolina 
JIM KOLBE, Arizona                     STENY H. HOYER, Maryland            
RON PACKARD, California                ALAN B. MOLLOHAN, West Virginia     
SONNY CALLAHAN, Alabama                MARCY KAPTUR, Ohio                  
JAMES T. WALSH, New York               DAVID E. SKAGGS, Colorado           
CHARLES H. TAYLOR, North Carolina      NANCY PELOSI, California            
DAVID L. HOBSON, Ohio                  PETER J. VISCLOSKY, Indiana         
ERNEST J. ISTOOK, Jr., Oklahoma        THOMAS M. FOGLIETTA, Pennsylvania   
HENRY BONILLA, Texas                   ESTEBAN EDWARD TORRES, California   
JOE KNOLLENBERG, Michigan              NITA M. LOWEY, New York             
DAN MILLER, Florida                    JOSE E. SERRANO, New York           
JAY DICKEY, Arkansas                   ROSA L. DeLAURO, Connecticut        
JACK KINGSTON, Georgia                 JAMES P. MORAN, Virginia            
MIKE PARKER, Mississippi               JOHN W. OLVER, Massachusetts        
RODNEY P. FRELINGHUYSEN, New Jersey    ED PASTOR, Arizona                  
ROGER F. WICKER, Mississippi           CARRIE P. MEEK, Florida             
MICHAEL P. FORBES, New York            DAVID E. PRICE, North Carolina      
GEORGE R. NETHERCUTT, Jr., Washington  CHET EDWARDS, Texas                 
MARK W. NEUMANN, Wisconsin             
RANDY ``DUKE'' CUNNINGHAM, California  
TODD TIAHRT, Kansas                    
ZACH WAMP, Tennessee                   
TOM LATHAM, Iowa                       
ANNE M. NORTHUP, Kentucky              
ROBERT B. ADERHOLT, Alabama            

                 James W. Dyer, Clerk and Staff Director






   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 1998

                              ----------                              

                                           Tuesday, March 11, 1997.

                   MARKETING AND REGULATORY PROGRAMS

                               WITNESSES

MICHAEL DUNN, ASSISTANT SECRETARY, MARKETING AND REGULATORY PROGRAMS
TERRY MEDLEY, ADMINISTRATOR, ANIMAL AND PLANT HEALTH INSPECTION SERVICE
LON HATAMIYA, ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE
JAMES R. BAKER, ADMINISTRATOR, GRAIN INSPECTION PACKERS AND STOCKYARDS 
    ADMINISTRATION
STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

                            Opening Remarks

    Mr. Skeen. The committee will come to order.
    The people who are here today start off our fourth week of 
budget hearings. If you'd be brief in your testimony, we would 
appreciate it. You usually are; and we appreciate that too. Of 
course, all statements will be included in full in the record.
    Mike, it's all yours.
    Mr. Dunn.  Thank you, Mr. Chairman. I appreciate the 
opportunity to address you today. I'm pleased to appear here 
before you and to discuss the activities for Marketing and 
Regulatory Programs for the U.S. Department of Agriculture and 
to present its fiscal year 1998 budget.
    I've prepared statements and I'd like to make that a part 
of the record. With me today are Terry Medley, the 
Administrator of APHIS; Lon Hatamiya, the Administrator of 
Agricultural Marketing Service; and Jim Baker, Administrator of 
Grain Inspection, Packers and Stockyards Administration; and 
Stephen Dewhurst from OPBA.
    They have written statements and we'd also like those to be 
a part of the record.
    Mr. Skeen.  That will be so done.
    Mr. Dunn.  The Marketing Regulatory Program activities are 
funded by both taxpayers and beneficiaries of program services. 
Programs are proposed to carry out $789 million of activities. 
Over $396 million will be funded through user fees from 
beneficiaries of these services.
    Currently, over 58 percent of the Department's user fee 
programs are administered by the Marketing and Regulatory 
Programs. These programs have been marketed, tested, and should 
be high performers under the Government Performance Results 
Act.

                        fiscal year 1998 budget

    For fiscal year 1998 budget, on the discretionary side, we 
request a current law appropriation of $431.7 million for 
APHIS; $51 million for the Agricultural Marketing Service; and 
$25.7 million for Grain Inspection, Packers and Stockyards.
    Legislation will be submitted to recover $28 million more 
under user fees. That budget proposes new fees to recover the 
cost of administering programs in all three agencies. APHIS 
provides leadership in anticipating and responding to issues 
involving animal and plant health, conflicts with wildlife, 
environmental stewardship, and animal well-being.

                         aphis--budget request

    APHIS' 1998 budget request proposes, under current law, is 
for $124 million for salaries and expenses. This compares to a 
fiscal year 1997 appropriation of $35 million. The budget 
request contains an increase of $1.3 million for Agricultural 
Quarantine Inspection Programs to handle the increased workload 
along the Mexican and Canadian borders and from Hawaii and 
Puerto Rico.
    Approximately, $9 million is requested for increased pest 
detection activities and will largely be devoted to the Karnal 
Bunt Program. The budget proposes a decrease of $3.3 million 
for animal damage control operations. It seeks supports from 
states for at least 50 percent of their total program. APHIS 
will use carry over funds to conduct architectural and 
engineering work for sterile screwworm rearing facilities to be 
built in Panama.
    Legislation will be proposed to recover the cost of 
providing certain activities in animal welfare, veterinary 
biologic, pink bollworm, biotechnology and the Swine Health 
Protection Act. We believe that the definable beneficiaries of 
these programs, rather than the general taxpayer, should pay 
for the services they receive.
    An appropriation of $7.2 million is proposed of which $3.2 
coincides with the Agricultural Research Services' request to 
continue modernization of the Plum Island Animal Disease 
Center.

                          ams--budget request

    Agricultural Marketing Service's fundamental mission is to 
facilitate the strategic marketing of agricultural products in 
domestic and international markets, while ensuring fair-trading 
practices, and promoting a competitive and efficient 
marketplace to the benefit of consumers of U.S. food and fiber 
products.
    In response to the changing needs of its customers, AMS has 
improved program deliveries and broadened the focus of its 
programs to incorporate a global approach service. Market news 
has nearly 700 reports on a daily basis available on the 
Internet.
    In response to recommendations made by the Advisory 
Committee on Agricultural Conservation, AMS broadened its scope 
of market news to include more information about cattle traded 
under formula, value based pricing, and regional market forces.
    These actions have given farmers and ranchers more tools to 
compete in today's marketplace which relies on timely and 
accurate market information. AMS continues to work closely with 
state programs to enhance marketing of agricultural products.
    AMS' 1998 budget request, under current law, is $49.8 
million for the Marketing Service Program; and $1.2 million for 
the Federal-State Marketing Improvement Program. We are 
requesting an increase of $320,000 to begin market news 
collections in South and Central America, and Pacific Rim 
countries.
    Market surveys conducted by AMS from these areas are needed 
as international competition increased in the post-GATT and 
NAFTA economy. We are also requesting an increase of $500,000 
to expand domestic market news reporting in accordance with the 
recommendations of the Secretary's Advisory Committee on 
Agricultural Concentration.
    We are working diligently to publish a rule on theNational 
Organic Standards and to implement a national program. In order to meet 
the increased responsibility for accrediting organic certifiers and in 
administering the program, the AMS budget includes an increase of 
$505,000. We will seek to recover the cost of the program through user 
fees that will be deposited into the Treasury.
    The budget also proposed to return program funding of the 
pest site data program to AMS from the Environmental Protection 
Agency. With the implementation of the Food Quality Protection 
Act, the Pesticide Residue Program will play a more critical 
role for conducting risk assessments with the registration of 
pesticides.

                         gipsa--budget request

    Grain Inspection, Packers and Stockyards; its mission is to 
facilitate the marketing of livestock, poultry, meat, cereals, 
oil seed, and related agricultural products, and to promote 
fair and competitive trading practices for the overall benefit 
of consumers in American agriculture.
    Federal grain personnel work with 2,000 state and private 
inspectors to provide high quality inspection and weighing 
services on a user fee basis. In 1996 this unique mix of 
federal, state, and private inspection agencies provided 2.3 
million inspections on an estimated 250 million metric tons of 
oil seed, issued over 118,000 official weight certificates, 
weighed over 114 million metric tons of grain, and met with 
trade teams representing 41 countries around the world to teach 
them about GIPSA and the U.S. grain marketing system.
    Grain Inspection, Packers and Stockyards Packers and 
Stockyards Program is located in 11 offices throughout the 
United States to monitor compliance with the P&S Act for 
approximately $95 billion of livestock, meat and poultry 
products.
    During fiscal year 1996 GIPSA targeted resources at 
providing financial protection, promoting fair business 
practices in enabling a competitive marketing environment for 
livestock, meat, and poultry. GIPSA's 1998 budget request, 
under current law, is $68.8 million, of which $25.7 million 
represents an appropriated funding. The remaining $43.1 million 
represents user fees authorities for grain inspection and 
weighing services.
    The fiscal year 1998 budget proposes legislation to 
authorize, subject to appropriations, the collection of $3.6 
million in additional user fees to cover the cost of grain 
standardization activities. The grain industry is the primary 
beneficiary of the grain standards and should pay for these 
services.
    For P&S programs, the budget proposes $14.8 million, which 
includes increases of $225,000 to allow GIPSA to establish 
electronic filing procedures for annual reports; $1.6 million 
for activities in the packer competition and industry structure 
areas; and $750,000 for poultry compliance activities.
    Increasing concentration, structural change, declining 
market performance, and the increased use of complex formulas 
on the value based marketing system by packers continues to 
raise questions of regulatory and policy significance. 
Additional resources will allow GIPSA to expand its monitoring 
and investigating regarding the anti-competitive implications 
of structural change and behavioral practices in the meat 
packing industry. It will afford us an increased capability to 
support legal actions that require complex, economic, and 
statistical analysis.
    The fiscal year 1998 budget proposes legislation to 
authorize the collection of license fees, to administer all 
activities under the Packers and Stockyards Act. All meat 
packers, live poultry dealers, stockyard owners, market 
agencies, and dealers as defined in the P&S Act would be 
subjected to license fees.
    Also included in the legislative proposal regarding a 
statutory dealer's trust to require livestock inventories and 
accounts receivable due from sale of livestock to be held in 
trust for unpaid cash sellers when a dealer fails to pay for 
livestock.
    I appreciate the opportunity to present the budget of the 
Marketing and Regulatory Programs. We believe the proposed 
funding amounts and sources of funding will provide a level of 
service wanted by our customers, the agricultural producing and 
marketing industry, consumers, and the general public.
    We are happy, Mr. Chairman, to answer any questions that 
you might have.
    [Clerk's note.--Mr Dunn's written testimony appears on 
pages 178 through 198. Mr. Hatamiya's written testimony appears 
on pages 199 through 210. Mr. Medley's written testmony appears 
an pages 211 through 240. Mr. Baker's written testimony appears 
on pages 241 through 256. The witnesses biographical sketches 
appear on pages 174 through 177. The Animal and Plant Health 
Inspection Service budget justifications appear an pages 257 
through 372. The Agricultural Marketing Service budget 
justifications appear on pages 373 through 448. The Grain 
Inspection, Packers and Stockyards Administration budget 
justifications appear on pages 449 through 492.]

                               screwworm

    Mr. Skeen.  Thank you, Mr. Dunn, on a good presentation. 
Now, let's start with APHIS. As many of you know, APHIS carries 
out a number of programs that I am particularly familiar with. 
Being in the livestock business, I've supported and used these 
programs many times.
    I appreciate the fact that we do have that kind of quality 
of representation amongst you folks. You do a great job. I was 
recently in Panama looking at some agriculture and interior 
programs. I met with Ambassador Bill Hughes, by the way, who is 
a former Member of Congress. I think most of you knew Bill.
    We discussed at great length the Screwworm Program and the 
plans to move both the personnel and rearing facility from 
Tuxtla Gutierrez, Mexico to Panama City. I received the 
Secretary's letter last week informing me that APHIS plans to 
initiate a privatization study this month. I think that was one 
of the conditions we agreed to when we visited with the 
Ambassador relative to this move.
    The questions I'd like to ask you are, has the scope of the 
study been worked out with the State Department and others so 
that everyone's concerns are addressed, number one? And number 
two, how long do you anticipate the study will take?
    While we were in Panama, Ambassador Hughes gave me the 
assurance that the State Department would not stand in the way 
of transferring personnel to Panama to keep this eradication 
effort going because it's been pre-eminently successful. When 
do you expect to have your people on the ground in Panama and 
doing the study?
    Mr. Dunn. Mr. Chairman, we appreciate your keen interest in 
our programs. And we especially appreciate you being our 
Ambassador to the Ambassador. We feel that you did us a great 
world of good in your visit down there.
    Mr. Skeen. Well, I thank you. It was nothing like the 
Lincoln Room, but the Ambassador's place was really very nice. 
He is such a hospitable guy. It was just a real pleasure 
visiting with him. We've got a great Ambassador.
    Mr. Dunn. Again, Mr. Chairman, we thank you. I'm going to 
ask Mr. Medley, our Administrator for APHIS, to answer the 
specific questions that you had asked.
    Mr. Medley. Thank you. Again, thank you, Mr. Chairman, for 
your assistance in this area. We have completed the scope of 
work. The privatization study is anticipated to be completed 
around the middle of June. We have requested that five 
personnel be immediately available to go to Panama. That's in 
the process of being responded to. We anticipate that those 
people will be in Panama very soon. We believe the study will 
resolve the issue that was raised about the construction of the 
facility.
    Mr. Skeen. Well, I appreciate that response. I appreciate 
the efforts that you've made in getting those people down 
there, and getting the study commenced. I appreciate that very 
much. We've got a few problems, as you know in Tuxtla.
    Mr. Medley. Yes.
    Mr. Skeen. I've been with this program since 1955, and I 
can't tell you of any other program I've ever known that we've 
initiated that's been as eminently successful as this one has 
been because it has saved us millions and millions of dollars 
in the livestock business. And also millions and millions of 
hours of time that it used to take to respond to the effort.
    I hope it was the logical conclusion when we initiated the 
program that eventually this facility would be opened in Panama 
so that we could control the screwworm infestation in both the 
Southern and Northern Hemispheres. So, I commend you for it.

                         animal damage control

    Let's switch to ADC. I'm concerned about the budget 
proposal we have here today because you're proposing to save 
money on a 50/50 cost sharing with the States. As you know many 
States have cooperator funds that exceed APHIS funding. The 
first question I have is, does your proposal take into account 
States that currently provide amounts above what they get from 
APHIS?
    Mr. Medley. Mr. Chairman, you're absolutely correct that 
there are a number of states that do exceed the desirable 50/50 
cost share. The current proposal does not take that into 
account. It's seeking only to reduce Federal contributions in 
those States where they're not contributing the 50 percent to 
increase the State cost share to 50 percent.
    Mr. Skeen. To bring them up to the 50 percent.
    Mr. Medley. The budget request is reduced by $3.2 million 
so that each State's cost share would be at least 50 percent of 
the total program.
    Mr. Skeen. So, you're talking about $3 million.
    Mr. Medley. Yes.
    [Clerk's note.--Subsequent to the hearing, the agency 
submitted the following additional information for the record.]

    States would have to increase their contribution totalling 
$3.2 million, or as we proposed, to reduce Federal 
contributions by $3.2 million to achieve each State's funding 
at least 50 percent of the programs.

    Mr. Skeen. Congress has provided ADC with $100,000 this 
year to help with the increased workload and the Wolf Re-
Introduction Program. Are these funds going to be adequate to 
respond to the wolf damage complaints? I understand that's a 
part of the program.
    Mr. Medley. Mr. Chairman, those funds were specifically 
targeted for Montana and the inter-mountain West. Wolf 
populations are increasing, And the number of complaints about 
wolf depredation are increasing as well.
    Mr. Skeen. The people or wolves?
    Mr. Medley. I would think both.
    Mr. Skeen. I hope that those correlate.
    Mr. Medley. We will have to respond to that growing area of 
concern and additional funds that may be required.
    Mr. Skeen. Well, the reason I asked the question is because 
it's imminent that we're going to have an introduction of the 
gray wolf in New Mexico and in Arizona. Do you support that 
initiative? I hate to put you up against the wall like that.
    Mr. Medley. Mr. Chairman, we support having our wildlife 
biologists with their expertise involved in this effort.
    Mr. Skeen. To do the studies and other things?
    Mr. Medley. Yes.
    Mr. Skeen. Well, let's hope we can confine it this time; 
the studies. We've got enough predators working on us now. Do 
you have funding now that's sufficient to initiate this 
program?
    Mr. Medley. At this particular point with the activities 
that we would be called upon, yes.
    Mr. Skeen. It's been proven through other wolf re-
introduction programs that your workload is going to increase. 
How do you propose to reduce the ADC funds for its ongoing 
services while at the same time support aprogram that will 
increase your workload?
    Mr. Medley. Mr. Chairman, in ADC, we see the activities as 
expanding on a number of fronts, not just with wolf re-
introduction. We're providing assistance to reduce bird studies 
for increased aviation safety and the increased amount of 
predator damage in aquaculture.
    This is an area where our needs are definitely on the 
increase. In all these areas, we're looking at how we can 
maximize providing technical assistance to the States and to 
the industries to meet the expanding needs.
    Mr. Skeen. And support your extension of the program.
    Mr. Medley. Yes.
    Mr. Skeen. Let us know how you're doing with that.
    Mr. Medley. Yes, sir. We will.
    Mr. Skeen. Mr. Fazio.

                         regional consolidation

    Mr. Fazio. Thank you, Mr. Chairman. It's good to see all of 
you Gentlemen; particularly, a friend from California, Lon 
Hatamiya; a friend of long-standing.
    There are several things I'd like to get into. But since 
the Chairman began with APHIS, let me ask, if I could of you 
Mr. Dunn, if you could outline for us the rationale for the 
consolidation of the APHIS administrative sites to Raleigh and 
Ft. Collins, Colorado. Indicate if you could what you think 
might be the impact on the ground on agriculture in those 
regions of the country where these closures, the other I guess 
13 closures, are likely to take place.
    Mr. Dunn. Mr. Fazio, I'll begin and then I'm going to hand 
the ball off to Administrator Medley.
    Mr. Fazio. I'm going to have him in just a few seconds 
propose some response.
    Mr. Dunn. Mr. Fazio, this is not something that we took 
very lightly. We in fact did a long study on how to go about 
the consolidation. We had submitted a proposal to the 
Secretary. In fact, the first time we sent it to the Secretary 
he sent it back and said please re-evaluate. So, that we did.
    What we propose through the consolidation is in fact a 
better utilization of the resources, the human and fiscal 
resources, that we have. And we do feel that by having the 
consolidation that we will be able to provide a better level of 
services to our field units because we are not doing away with 
those field units.
    They will still be there, but they will have the 
availability of increased and better resources at that 
consolidated level. And then I will turn it over to Mr. Medley.
    Mr. Medley. Thank you. Mr. Fazio, one of the reasons that 
we're proceeding with regional consolidation is to increase our 
service, our program delivery. We believe that the hubs will 
have a strong science support infrastructure that will assist 
us as we deal with today's emerging plant pests and animal 
diseases.
    Also, we have structured our cooperative programs so that 
we have a very strong State presence, our State plant health 
director. These positions will remain very strong within each 
State working with their State counterparts.
    So, we don't believe that this consolidation will adversely 
impact program delivery. We feel it will enhance it and allow 
us to better cross-utilize our resources.
    Mr. Fazio. Mr. Medley, I assume there is a savings attached 
to this in the administrative overhead. Can you identify how 
much we'll be saving as a result of these consolidations?
    Mr. Medley. From our preliminary figures, we're looking at 
a savings of approximately 60 administrative positions from the 
consolidation. But what's really not possible to exactly 
measure is the savings and enhancement from having our people 
co-locate with the benefits of synergism by working on issues 
together; having our animal damage control, wildlife biologists 
working with Veterinary Services on animal wildlife diseases. 
We believe that's a tremendous benefit.
    Mr. Fazio. Are these personnel going to be attrited? Are we 
having any RIFs?
    Mr. Medley. No. We will be offering everyone a job. Also, 
we will be providing out placement services; placing people in 
other offices in the state, or in the region. We believe that 
by doing this we'll be able to accomplish consolidation over a 
two- to four-year period without a RIF occurring.
    Mr. Fazio. And you really anticipate putting more resources 
in the field in these co-located facilities with the state 
programs. Is that going to be something that we can see in 
measurable budget terms or is that just something we hope to 
do?
    Mr. Medley. I think you will be able to measure benefits 
both in budget terms, and in the program terms of service 
delivery at the lowest possible level.
    Mr. Fazio. Well, if for the record, you could provide some 
information about how that might affect California, I'd 
appreciate it.
    [The information follows:]

    APHIS will be consolidating support services to permit 
greater sharing of resources, expertise, and perspectives 
across program lines. Program delivery, however, at the State 
and local level will remain intact, with no change in 
management or field delivery personnel. This includes our 
California Plant Health Director's office in Sacramento. We 
believe the consolidation of our Regional Offices will enhance 
service delivery at the local level and provide stakeholders 
central locations from which to address a broad range of 
agricultural health and animal care issues.

    Mr. Fazio.  I'm not being parochial enough to simply oppose 
this because the Sacramento Office is closed. I share your 
desire frankly, to get the program out into the field where it 
can do more good. And the one particular interest I have is the 
effort to co-locate a lot of USDA offices in Davis. I'm 
interested to know what perhaps remnants of that administrative 
office may gravitate across the Sacramento River.
    Mr. Medley.  Okay.
    [The information follows:]

    APHIS has not been involved in the collocation of USDA 
offices at Davis, California. However, we are committed to 
treating our employees fairly and honestly throughout this 
entire process. Our outplacement efforts for those employees 
who choose not to transfer to a new regional hub include the 
identification of other Federal positions, including those that 
may be available at Davis, where our employees could compete 
for jobs.
    The DAVIS Collocation project affects eight USDA agencies 
that would be in a building to be built on land adjacent to the 
University of California (DAVIS) campus. The building would be 
built by a private developer on city of DAVIS land, and the 
General Services Administration (GSA) would sign a 15-year 
lease. The primary USDA agencies involved in the consideration 
are NRCS and FSA.

    Mr. Fazio.  And to see whether or not we can, as the 
Secretary says, do away with some of the stovepipe structure of 
the Department. I think he said that several times.
    Mr. Skeen.  Would the Gentleman yield?
    Mr. Fazio.  I'd be happy to yield.
    Mr. Skeen.  In connection with this same discussion that 
we're undergoing here, at any time when you consolidate, it 
costs you money up-front.
    Mr. Medley.  Yes, there are up front costs.
    Mr. Skeen.  Do you have enough money to achieve this goal 
and get it initiated with present funds?
    Mr. Medley.  Mr. Chairman, we would pay for the regional 
consolidations over two to four years through cost savings. Of 
course, we're targeting program overhead as an area and looking 
at what we will need over the two- to four-year period. We're 
looking to fund consolidation from cost savings and program 
overhead.
    Mr. Skeen.  And, that's the source of funding?
    Mr. Medley.  That's the initial source.
    Mr. Skeen.  In cost savings.
    Mr. Medley.  Yes.
    Mr. Skeen.  I thank you for your response. Mr. Fazio.

                            organic farming

    Mr. Fazio.  Thank you, Mr. Chairman. The issue of organic 
farming is of increasing interest in my state. I think we've 
got something like $85 million worth of organic farming going 
on, on 50,000 acres. And I know that this is not a local 
phenomenon. It's a national activity. And there is an 
increasing market apparently in retail establishments for 
organic food.
    Normally, when we ask for implementation of the last farm 
bill everybody assumes we're talking about the last farm bill. 
But apparently, in 1990 the responsibility in that farm bill 
was given to the Department to come up with some national 
standards so we could get some of the, I don't want to say 
charlatans out of the industry, but to establish something for 
consumer purposes and for agricultural production purposes that 
we can all call the same name.
    I'm told that we've created a 1992 Board, the National 
Organics Standard Board. And we're in 1997 and apparently we 
still don't have any standards. I wondered if you could give me 
some background as to what's the hold-up here? Why are we 
finding it so difficult? What are the interplay of interests 
that prevent the Department from getting its act together on 
this issue?
    Mr. Dunn.  Mr. Fazio, I think you very accurately pointed 
out one of the responsibilities of the Marketing and Regulatory 
Programs. And that's to provide integrity to the marketplace. 
And that is in fact what we are looking at with the Organic 
Standards Board. As you had indicated in 1992 we began the 
establishment of the National Organic Standards Board.
    They have been working with us. Quite frankly, they didn't 
always agree on things as you are well-aware. There are a lot 
of different connotations. There are a lot of, I think, honest 
differences about how organic standards ought to be; how they 
should be implemented; who should be doing the certifying; who 
should be doing the certifiers.
    All of that notwithstanding, I have to assume the 
responsibility of not having those out. I'm the Assistant 
Secretary for Marketing and Regulatory Programs. My desire was 
to have those out a year ago. Frankly, we just did not meet 
that goal.
    We have at this time completed our in-house completion of 
those organic standards. We are fetching them from the 
Agricultural Marketing Service to the rest of the Department. I 
am hopeful that we will have those standards out by late spring 
so that they will be in place for the upcoming crop year. I 
will defer to Administrator Hatamiya to speak of the specifics.
    Mr. Hatamiya.  First of all, Mr. Fazio, thank you for your 
kind words of welcome.
    Mr. Fazio.  I'll throw you a hot potato.
    Mr. Hatamiya.  That's quite all right. This is an area 
that's been equally frustrating to us at the Department in 
terms of final implementation. I have just a couple of notes of 
information.
    Funding for the program wasn't available until fiscal year 
1994.
    [Clerk's note.--Funding was provided to the National 
Organic Standards Board in fiscal years 1992 and 1993 through 
the advisory committee's appropriation.]
    Mr. Hatamiya. During the time of this Administration we 
have been actively working to implement that program. Very 
frankly, I think we were overly optimistic about what we had to 
do to get it in place.
    We're used to implementing standards for single 
commodities. This is a standard for a growing process, so it's 
much more complex than we had anticipated initially. As 
Assistant Secretary Dunn has said, we're now in the final 
stages of review in the Department and hope to have the 
proposed rule out on the street this spring. We've worked very 
closely with the Board and the Department.
    I want to add that the National Organic Standards Board has 
been kind of a model--kind of a unique program where the 
industry has worked directly on making recommendations to the 
Secretary and to the Department for final implementation of 
these standards.
    As you've stated, this is a growing industry. It's one that 
will continue to grow. Not only are there domestic organic 
communities awaiting these standards, but the international 
community is as well. We believe that we will be the first 
country, once these are implemented, to have a standard that 
applies from California to Maine. Anywhere you go, you will 
know what organic means. We're almost there, and we're working 
very diligently to make that happen.
    Mr. Fazio.  Is the Office of General Counsel as diligently 
working as the rest of you? Are we getting hung up on legal 
technicalities that have slowed down an already difficult 
process?
    Mr. Hatamiya.  There is a process in place, obviously. I 
never claim in this position to be a lawyer, but unfortunately 
I am. We have worked very closely with the Office of General 
Counsel to ensure that we have a system of review in place. I 
think they have been very helpful in this process. So, it is 
one that we're trying to work through. It's one that, as I've 
said before, has been frustrating, but I think we're almost 
there.
    Mr. Fazio.  So, time spent now will keep you out of court 
later. Is that the idea?
    Mr. Hatamiya.  That's exactly right.
    Mr. Fazio.  Well, we'll be interested to see how well you 
do.
    Mr. Hatamiya.  Well, we're hopeful that will be the case as 
well.

                         pesticide data program

    Mr. Fazio.  I know Mr. Serrano has joined us. Let me ask 
one other question and then I'll wait on the second round. 
We've had some controversy within this committee about the 
Pesticide Data Program and its future role, both within USDA 
and perhaps EPA.
    Obviously, I would appreciate it if you could put on the 
record, how do you review this material? What value do you 
think this Pesticide Data Program provides to agriculture, to 
the consumer? There are real questions about how we're going to 
implement the Food Quality Protection Act; frankly, what role 
State government and county agricultural commissioners should 
play.
    I mean, this is an evolving area and one that's very 
important to my agricultural constituents. I'm troubled, I 
might say, by the reduction of even $2.5 million in the budget 
for this purpose. But I'm even more concerned that we haven't 
yet figured out why we need this material. And who is 
responsible for putting this program to work?
    Mr. Dunn.  Mr. Fazio, we received what you might call a 
mixed signal from Congress as appropriators said we were no 
longer going to have the Pesticide Data Program. Then again in 
the Food Quality Protection Act we were mandated to in fact 
have the program. That did cause us a bit of stumbling. It 
forced us to work with one of our sister agencies.
    Mr. Fazio.  That's never a bad thing.
    Mr. Dunn.  It is not. And I think we learned a lot by doing 
that. I will let Lon, again, speak of the specifics. But I must 
tell you, Mr. Fazio, I have been to Sacramento and met with the 
folks in the State there who operate this program. And I'm most 
impressed on the caliber of the personnel, the equipment, and 
what they're able to do with the Pesticide Data Program in the 
State of California.
    Mr. Fazio.  I appreciate that.
    Mr. Hatamiya.  Mr. Fazio, in the Pesticide Data Program we 
think it has been clear from the beginning what the roles have 
been for the EPA, the Department of Agriculture, and other 
sister agencies at the Department of Agriculture. We believe 
that the continuance of this program is even more important now 
with the passage of the Food Quality Protection Act.
    It mandates that the Secretary determine what pesticide 
residues are out there. It gives us that sole responsibility. I 
will say the Pesticide Data Program is the only program with 
objective, reliable results concerning pesticide residue on our 
fruits and vegetables and the other commodities that are 
tested.
    I will also point to the fact that it's been a model 
program. We've worked with ten States across the country. It's 
been a model program of a partnership in terms of our continued 
reliability, and our continued partnering with those State 
departments of agriculture. It's also a model program for our 
partnership with our sister Federal agencies.
    We've worked very closely with the Environmental Protection 
Agency. They see the Pesticide Data Program data as the only 
source for determining dietary risk assessments, as well as the 
use and re-registration of minor usepesticides which is 
critical, obviously, to the area that we're both from.
    Again, we believe the Department of Agriculture is the 
appropriate place for the program. We already have the system 
in place. The economies of scale are already there. But, more 
importantly, it's because of the fact that we're non-regulatory 
over these food issues, that we can get voluntary involvement 
with this program.
    We have over 900 sites where we take test samples, and 
those samples are tested in the various state labs. So, we've 
gotten great cooperation from the people in the retail and the 
wholesale industries to ensure the integrity of this program.
    Mr. Fazio.  Mr. Dunn mentioned what he saw at the state 
level in California. Not all states are engaged in this 
program. Certainly, we're engaged at different levels. What are 
you doing to try to bring about a higher sense of urgency and 
perhaps standard of excellence in the various state programs? I 
don't think this program is going to sustain itself if it's 
known as a California program, with all due respect to the fact 
that I finally got on this subcommittee.
    Mr. Hatamiya.  We work very closely with nine other states 
besides California, in all parts of the country, which 
represent over 50 percent of the consumable commodities that 
are tested. We're working the State of New York, the State of 
Texas, Florida, Maryland, Ohio, and on and on. So, the program 
covers all regions of the country. We believe that they have 
been strong proponents of this program.
    Again, we look at it as a prime example of how the federal 
and state governments can work together; and not only one 
federal agency, but a number of federal agencies. My sister 
agencies here, APHIS and GIPSA, are also involved in that 
program, as well as NASS and ARS at the Department, as well as 
EPA. So, we think that it's a program that covers a lot of 
different bases.
    Mr. Fazio.  Are we getting a lot of support from grower 
organizations, from pest control advisors, and others in the 
industry? My sense is they were the ones who were most 
sensitive to the program. I don't think we've heard much input 
from them.
    Mr. Hatamiya.  I think people went along and relied upon 
the data that came along. The situation that existed in the 
last appropriations cycle probably threw a scare into many of 
these people. They realized this is the only source of 
information for pesticide data residue. There has been strong 
support generated among the groups you mentioned.
    Mr. Fazio.  Let me just wrap-up by asking where are you and 
EPA on implementing the Food Quality Protection Act in terms of 
regulations that are emerging? I've had some concerns expressed 
to me. I mentioned them several times. I won't bore my 
colleagues any further.
    But getting into plant breeding at EPA is troublesome to a 
lot of people. Where is this constant struggle between these 
agencies with different orientations and different purposes 
going to be sorted out in regard to this very important law?
    Mr. Hatamiya.  I think by----
    Mr. Fazio.  You may want to go back to Mr. Dunn at some 
point.
    Mr. Hatamiya.  I'll turn it back over to Mike after I 
respond on my behalf. Because of the responsibility I have for 
the Pesticide Data Program, the Secretary and the Deputy have 
given me some ability to work closely with EPA to ensure that 
the Food Quality Protection Act is fulfilled.
    We have met a number of times since the passage of the 
legislation to ensure that the cooperation continues. We have 
just last week, as a matter of fact, had a joint meeting with 
EPA. We've been invited to their Advisory Committee meetings, 
and we will continue to give input.
    The Department is also emphasizing having a central 
clearinghouse for this. I don't believe it's appropriate in the 
Agricultural Marketing Service, but it may be more appropriate 
in other places. I know that's the direction we're going to. 
But our part in this Food Quality Protection Act is very 
important; the delivery of the pesticide residue data. So, 
we're working very closely to ensure that happens.
    Mr. Dunn.  I think as Congress and the Administration 
struggle to establish a balanced budget, it becomes imperative 
and it becomes clear to all of us in the Administration 
administering the programs that we don't have the luxury of 
having individual programs and going off on our own as we may 
have in the past.
    And it's imperative that we work very closely with all 
agencies to carry out the letter of the law that Congress has 
asked us to do. And we will see more and more of this. The 
Government Performance Results Act will in fact grade us on how 
well we're doing on this.
    Your earlier question of how are we working with states; 
we've forged an alliance with the National Association of State 
Directors of Agriculture. And we are working with them on 
government and federal programs, in areas that we can assist 
them. Where they can do a better job, we'll get out of the way 
and let them do that.
    If they think we have to do the better job, then we will do 
it. But we no longer have the luxury of overlapping and 
duplication. I think Congress has been extremely clear on this. 
And the President and the Vice President have been as well.
    Mr. Fazio.  I'll back-off right now, Mr. Chairman.
    Mr. Skeen.  Thank you. I'll take advantage, since we're on 
that particular topic, to ask a couple more questions. How many 
pesticides have been re-registered by EPA using the data that's 
been gathered in this program?
    Mr. Hatamiya.  There have been approximately 20 pesticides 
re-registered using the data from the program.
    Mr. Skeen.  Can you name some of them?
    Mr. Hatamiya.  We'll provide that for you for the record. I 
don't have that information in front of me right now.
    [The information follows:]

     Reregistration Activities by EPA for Major Pesticides in U.S. 
                Agriculture for Multiple Commodity Uses

    aldicarb
    captan
    chlorpropham
    dicofol
    fenamiphos
    mevinphos
    propargite
    trifluralin
    pentachloronitrobenzene or quintozene
    benomyl
    chlorothalonil
    DCPA or dacthal
    ethion
    iprodione
    permethrin
    thiabendazole

                       Special Review Activities

    2,4-D
    disulfoton
    diazinon
    methyl parathion

                      international trade barriers

    Mr. Skeen.  How about international trade barriers? Have we 
had any barriers dropped because of this data?
    Mr. Hatamiya.  Mr. Chairman, I'm glad you also brought that 
issue up. The Foreign Agricultural Service uses the data from 
the Pesticide Data Program to use with our trading partners to 
lower barriers. It has been a tremendous aid in providing 
assurance to our trading partners that pesticides are low in 
the commodities that we're trying to sell into those areas.
    Mr. Skeen.  Thank you for your response. Mr. Serrano.

                          hunt's point market

    Mr. Serrano.  Thank you, Mr. Chairman. I just have two 
questions. I'm new to this committee, and I've come to the 
conclusion that this is a pretty large agency. I'm sometimes 
wondering if I'm asking the right people the right questions. 
If I'm not, I'm sure you'll direct me.
    I represent the Bronx. And we have the Hunt's Point Market, 
which I know you are all familiar with. What we hear locally is 
always what the local issues are. You know, whether they need 
more parking or not; how safe the area is; whether they're 
moving out eventually or not, along with the Yankees; or 
whether they move into Yankee Stadium when the Yankees move 
out, you know, these kinds of discussions.
    But no one ever discusses the health of the facility. How 
is it looked at by USDA; what is its future or what should it 
be. In other words, how's my market doing?
    Mr. Dunn.  Thank you, Mr. Serrano, for that question. I'm 
going to quickly turn that over to Lon Hatamiya. But I must 
also add that many folks have the mistaken thought that we 
don't work in urban areas. In fact, we have approximately I 
believe 30 employees at the Hunt's Point Marketplace. It is a 
very valuable and viable role to ensure that we have fresh 
produce for the entire city. So, Mr. Hatamiya, if you could 
address the conditions of the facility.
    Mr. Hatamiya.  Mr. Serrano, judging by the volume of fruits 
and vegetables--all the commodities that go through Hunt's 
Point--it is the largest terminal market, I believe, in the 
United States. That's probably one indication of the health of 
Hunt's Point. As Assistant Secretary Dunn mentioned, we have 
over 30 employees just working at that facility alone.
    We have over 20 graders that grade the commodities that go 
through there on a given day, as well as the fact that we have 
ten market news reporters who report price and supply and other 
data that comes through Hunt's Point because of its critical 
location in terms of the fruit and vegetable trade.
    So, in that sense, we believe Hunt's Point is very healthy. 
In terms of the actual facility, we believe that it continues 
to--I know in your area it's a concern because of where it's 
located and the growing urbanization around it--but it 
continues to be a viable location for the trade of fruits and 
vegetables.
    Also, under the Agricultural Marketing Service I have the 
responsibility for reviewing wholesale market and distribution 
points. At some point, we may be able to go in and take a look 
at Hunt's Point to do a study as to the long-term viability. 
And that's something we will take under consideration.
    Mr. Serrano.  Obviously it's one of those areas in New York 
City where everyone is very much concerned with keeping the 
facility. And as you said, I believe it doesn't supply just the 
local metropolitan area, it supplies the whole Northeast.
    Mr. Hatamiya.  That's right.
    Mr. Serrano.  It's really quite a market. I thank you in 
advance for any further information you could give us as time 
goes on in terms of what is happening with the market, what new 
things are happening, what role you're playing on a regular 
basis.
    Mr. Hatamiya.  Mr. Serrano, we'll try to put together more 
information. I'll provide that for the record and for your 
information.
    [The information follows:]

    AMS has regular activities at the Hunts Point Market in Fresh 
Products Grading, Market News Reporting, Perishable Agricultural 
Commodities Act--PACA--Services, and Pesticide Data collection.
    The fresh fruit and vegetable products inspection office at the 
Hunts Point Market is one of the largest in the United States. There 
are currently 20 Federal employees located at the Hunts Point office. 
The grading service for fresh fruits, vegetables, and other special 
products provides for unbiased certification of products in domestic 
and international marketing systems. Official inspection, grading, and 
certification services provide factual evidence as to the quality and 
condition of product moving in commerce throughout the U.S. and the 
world.
    AMS' Fruit and Vegetable Market News office in the Hunts Point 
Market collects price and supply data on a daily basis. That 
information is compiled and published daily in the New York City 
Wholesale Fruit and Vegetable Report. This market report is mailed and 
faxed upon request, plus the information that makes up the report is 
distributed to the rest of the Market News Program and to direct 
subscribers via the AMS Market News Telecommunication System, to 
secondary subscribers and disseminators that further facilitate the 
broad distribution of this information to thousands of users, and now 
the information is available on the AMS Internet site. This information 
is also loaded into the agency database to ensure that it is available 
for later retrieval, special reports, and analysis.
    PACA services are provided mainly by the program's Northeast 
Regional Office located in North Brunswick, NJ. Most businesses located 
on the Hunts Point Market are required to be licensed under the PACA. 
Licensees located on the Hunts Point Market include wholesalers, 
commission merchants, brokers, jobbers, and food service 
establishments. By establishing a code of trading practices covering 
the marketing of fruits and vegetables in interstate and foreign 
commerce, the PACA helps to protect produce businesses located on the 
Hunts Point Market from unfair and fraudulent business practices. The 
firms benefit from the PACA's enforcement of fair trading practices by 
requiring that suppliers, in a timely manner, deliver contracted 
perishable commodities at the price and quality level specified in the 
purchase agreement. The misrepresentation and misbranding provisions of 
the PACA require that shippers ensure that the grade, weight, size, 
count, and origin of the produce reflected on the shipping container is 
accurate. The PACA also provides Hunts Point firms with a forum for 
resolving contract disputes with their suppliers and many of their 
customers.
    The Hunts Point Terminal Market also participates in USDA's 
Pesticide Data Program--PDP. The Market is sampled weekly by the New 
York Department of Agriculture and Markets for fresh produce, a major 
commodity component in our program. Of the 180 sampling sites in New 
York State, which voluntarily participate in PDP, 60 are in the Hunts 
Point Market. AMS has provided these sites with letters of appreciation 
and certificates for their participation in our program, which many 
sites proudly display. PDP's pesticide residue data forms an important 
cornerstone for dietary risk assessment activities conducted by the 
Environmental Protection Agency in the reregistration of pesticides. 
PDP is also a critical component of the Food Quality Protection Act of 
1996, with emphasis on protecting the health of infants and children.

                   agricultural quarantine inspection

    Mr. Serrano.  I have one last question, Mr. Chairman. This 
is one that has always kind of intrigued me. I know that USDA 
oversees the 50 states and I also know that it oversees the 
territories. Yet I notice that for instance, if you go to 
Florida and you buy oranges and you put the oranges in the 
trunk of your car, you can travel the whole nation with the 
oranges in the trunk of your car. And you are obviously not 
stopped in any state to see if you have Florida oranges. In 
California they probably just won't stop you. They'll do more 
than that. They're all ex-New Yorkers anyway. So are the people 
in Florida, actually.
    But when you travel, say, from Puerto Rico, specifically 
from Puerto Rico to the U.S., if you bring any fruits or 
vegetables, you're stopped at the airport and treated like 
you're coming in from a foreign country.
    You have famous stories in the Puerto Rican community and 
in our family of who was able to sneak in how many mangos in 
1969 or 1985 or whatever. Why is that? Why are those fruits and 
vegetables treated as foreign delicacies that should not be 
allowed in the country?
    Mr. Dunn.  Mr. Serrano, you raised a question that I'm glad 
to answer. It's because of what pests there may be located in 
other parts of the nation, other trust territories that we 
might have, and certainly in other countries. We have a program 
called Don't Pack a Pest in which when people come in, we tell 
them----
    Mr. Serrano.  We do. We could feed them in an election 
usually.
    Mr. Dunn.  What you can bring in and what you cannot bring 
in. And as you go through the airport, you will see our little 
Beagle Brigades in their green outfits. They are sniffing out 
to find out. Very often folks unknowingly bring in something 
that is of grave consequences to our agricultural sector.
    Right now in New York we're going through a program where 
we're cutting down a number of the maple trees and elm trees in 
the city. And people are very concerned about that. But the 
reason why we have to do that is because someone did bring in a 
pest; the Asian Longhorn Beetle.
    And that pest has the potential to wipe out the entire 
maple tree population in the Northeast. Obviously what would 
happen to the maple syrup industry, what would happen to the 
tourism industry if we had that type of devastation would be 
tragic.
    So, we have to be constantly vigilant to ensure that those 
pests do not come in. I'm going to ask Mr. Medley then to 
address specifically what we find in Puerto Rico.
    Mr. Serrano.  But before you go on, you've given me a 
question much more provocative in nature than what I expected 
because of the phrasing of your answer, ``bringing into the 
country''. Well, that's just one part of the country to the 
other, whether it's a state or not. Southern Florida is as 
tropical as you can get, yet you can bring tropical fruits from 
Southern Florida to New York.
    We grow mangos in this country. We grow sugar. We grow 
pineapples. We grow avocados and guava. Now, do the ones that 
we grow in one part of the nation have fewer pests than the 
ones we grow in another part? What I'm getting at is I know 
what you guys are saying. And I know where it came from.
    But I think in 1997 that policy may not hold any more. 
There may not be a reason for it any longer, unless Puerto Rico 
stands out with the Virgin Islands and Guam somewhere 
physically and in such a condition that it does present a 
danger to the rest of the nation that it doesn't present to 
itself.
    Mr. Dunn.  The answer, sir, is yes. There is a difference 
because in those parts of Florida, those pests are not present. 
What we're trying to do is ensure that we don't have a presence 
of those pests come in. I will turn it over to Mr. Medley to 
answer specifics.
    Mr. Medley.  To give an illustration, there is one area in 
Florida, Dade County, where you would not be able to bring 
citrus out and take it into New York or the Northeast. In Dade 
County, Florida, we have a citrus canker quarantine with 
collection points to prevent the movement of citrus.
    This illustrates our efforts in identifying particular 
economically or quarantine significant pests, wherever they 
might be located, and putting into place appropriate safeguards 
to prevent further dissemination or movement.
    When you have an island environment, for instance, like the 
State of Hawaii which has fruit flies, we must place certain 
restrictions on certain commodities coming from that area.
    There are a number of regulations that prohibit or restrict 
certain agricultural products in moving from one state or 
region to another. It's all part of our overall safeguard 
system to try to prevent the widespread dissemination of 
quarantine significant pest.
    For instance, right now in Puerto Rico, there is a concern 
about sorghum.
    Mr. Serrano.  What?
    Mr. Medley.  Sorghum. There is a particular fungus, an 
ergot, that has been documented on the sorghum seeds in Puerto 
Rico. At this point we're working with industry and with ARS to 
make sure that seed coming from Puerto Rico does not introduce 
the fungus into Texas, Kansas, and other major sorghum 
producing areas. When quarantine significant pests are 
identified, we restrict certain movements.
    Mr. Dunn.  Mr. Serrano, let me also make it perfectly clear 
that we don't just work with those protectorates or those other 
countries in saying you're quarantined. We also assist them in 
setting up protocols in which they can help eradicate the 
problems that they have so that we do have an open and free 
trade. That is an extremely important part I think of our 
program.
    Mr. Serrano.  I'm sorry I got on the subject. With all due 
respect, sir, when you say that we're going to help ``them'' so 
that we can have free trade with ``them'', they're not 
``them''. They're a part of the United States. You would not 
use the same wording if you were talking about California or 
New York. You don't help New York solve a problem so they can 
trade with California because New York and California are the 
same.
    I'm suggesting that this policy is antiquated. I'm 
suggesting that this policy is general, global in nature. It 
says anything that comes out of Puerto Rico has to be treated 
like it's coming from Peru. Well, we who come from Puerto Rico 
originally paid a price for being different than Peru or 
Columbia. And that's the association we have with this country.
    And just consider your wording. I'm not trying to hang you 
on it, but if you analyze it later on, you will realize that 
you said, you know, we will help ``them'' solve their problems. 
We can trade with ``them''. There is no trade. It is just 
movement. And it's not help. You are the Agriculture Department 
in Puerto Rico. There is no other national Agriculture 
Department.
    You are it. What you say goes. So, why for years have we 
been saying nothing comes in from Puerto Rico, but everything 
can move among the 50 states? It just seems to me that there 
might be policies that need to be looked at because they might 
still be stuck in 1917, when it was not called Puerto Rico, but 
when we changed its name for a while to Porta Rico.
    Mr. Fazio.  Would you yield for a minute.
    Mr. Serrano.  Sure.

                             pest detection

    Mr. Fazio.  I just was interested in following up on a 
couple of points. First, anything you could tell us or put on 
the record eventually about the relationship with Hawaii in 
this regard might be of interest because I think we're talking 
about the Continental U.S.
    There may be some similarities in our relationship with 
Hawaii even though they are a state. But I'm particularly 
interested also in really getting some information, and maybe 
for the record as well, about what we're doing in Puerto Rico 
to deal with the problem, other than to keep it from coming 
here.
    I think that may be where I would be most supportive of Mr. 
Serrano's concerns; not wanting to import a problem, but not 
wanting to simply treat Puerto Rico as a lesser part of our 
country. Are we making the same kind of emphasis on ridding 
pests in Puerto Rico that we might be, say, in the Los Angeles 
Basin?
    Mr. Dunn.  I think that's an excellent point. For instance, 
with Karnal bunt right now, we do not let wheat come out of the 
State of Arizona, and New Mexico, and a part of Southern 
California. What we can do is provide you with a list of what 
we are doing throughout the nation in assisting producers 
throughout to ensure that we are ridding the nation of the 
pests that we find in certain areas in certain regions.
    We do have regionalization that is enforced throughout the 
nation, not merely because an area is an island or 
geographically removed. It is a very, very serious job that we 
have to do to protect the integrity of the rest of the nation 
from diseases. I'll turn it back to Terry again.
    Mr. Medley.  You make an excellent point in that for any of 
the restrictions that we're imposing, there should in fact be a 
very sound scientific basis, as well as a course of action that 
we're developing to respond to the pest or disease.
    Right now we're looking at how we can better utilize pest 
risk analysis in setting up free zones and in identifying 
systems under which you can also export, or move interstate 
different commodities. We're committed to this approach. You 
will see in this year's budget request, that there is an 
increase in pest detection which is a general area which deals 
with specific quarantine significant pests.
    Karnal bunt activities have been identified for some of the 
increase because of the current problem. But we are, 
Congressman, committed to assuring that, whether it's the 
Continental U.S., Puerto Rico, Hawaii, or one of our 
territorial possessions, the rules being developed are uniform 
and equally applied.
    We have to do this domestically because we're expecting the 
same thing of our international trading partners. We're 
committed to a level playing field.
    Mr. Serrano.  I appreciate that. I certainly don't envy the 
work that you gentlemen and your agency have to undertake on a 
daily basis. My comments were more directed at my desire that 
we review this overall policy, and to understand that, you 
know, as strange as this may seem, there is no agency that 
reminds Puerto Ricans that we're not a state or an independent 
nation more than USDA because of the way it treats people the 
minute they leave the island.
    You can leave from here to go to Puerto Rico and bring all 
the fruits and vegetables you want. But the minute you're 
coming back, you're treated at the airport like you're leaving 
a foreign country to enter into the United States. And I 
understand what you're telling me. There might be problems. 
Well, you are the Agency down there. You can take care of those 
problems and not keep sending that message that you send every 
time we try to board a plane. Thank you.
    Mr. Skeen.  Mr. Latham.
    Mr. Latham.  Thank you, Mr. Chairman. I'm going to have to 
leave.
    Mr. Skeen.  Mr. Kingston.

                               user fees

    Mr. Kingston.  Thank you, Mr. Chairman. What are the five 
fees that you're proposing?
    Mr. Medley.  Three of those; for animal welfare, veterinary 
biologics, the biotechnology were proposed in the last two 
budget requests. The swine and the pink bollworm user fees are 
being proposed this year for the first time.
    Mr. Kingston.  And the animal control----
    Mr. Medley.  No, sir. The Animal Welfare Act (AWA) is where 
we're asking for the user fees. And that would be for those 
facilities that receive licenses and services. In terms of our 
animal welfare program, they would have to pay user fees.
    [Clerk's note.--Subsequent to the hearing, the agency 
submitted the following additional information:]

    The proposal would be to collect fees from entities and 
individuals licensed under the AWA as well as from facilities 
required to register. Under this proposal, these licenses and 
registrants would have to pay user fees.

    Mr. Kingston.  And how does it work------
    Mr. Medley.  It would work the same way. It would be 
assessing a fee to pay for the service that is rendered by the 
Agency for the benefit of the recipient; be it, a license for a 
particular product in biologics or a certification in 
biotechnology. It would be a service fee. We're anticipating 
that collectively it's almost $10 million.
    Mr. Kingston. On health and welfare do you get involved----
    Mr. Medley. No, sir. We do not.

                             internet page

    Mr. Kingston. On your Internet page, does that save any 
money. Is there a possibility that kind of technology can put 
us into saving money? You have producers who can get to the 
information so much easier.
    Mr. Dunn. We think it's probably saved us a lot of money 
just in mailing already because people are able to download, 
and sometimes large volumes of information. The real savings in 
that is that we get information out to producers, processors 
and end users so that everyone is available; the same type of 
information almost on a real time basis. And it levels the 
playing field.
    Mr. Kingston. On that scale, how many people have them; 75 
percent, 30 percent? How many are the producers that you work 
with? Do you know yet?
    Mr. Dunn. I'm not sure how many producers have computers. 
I've heard that it's as high as 75 percent. But I'm not privy 
to any of that type of information. Perhaps our ERS people can 
give us a better insight into that.
    Mr. Kingston. Once they get on-line can you discontinue the 
mailing?
    Ms. Medley. On many of the things that they may be pulling 
off line or things that are proposed rules that would be in the 
Federal Register. What they would have done in the past is call 
us and ask us to send them a copy, or fax them a copy. They no 
longer need to do that.

                             animal welfare

    Mr. Kingston. We had the Inspector General about two weeks 
ago testify before the subcommittee. He said that he had talked 
to APHIS about coming up with new regulations for domestic 
owners of animals; individuals that would comply with the same 
regulations that pet stores or zoos do. Does that ring a bell 
to you?
    Mr. Medley. We recently issued a policy on pocket pets. We 
also held three public hearings where we looked at a number of 
animal welfare issues.
    We have had inquiries in terms of regulations for trying to 
control dogs that are used for hunting, breeding, and security. 
So, there are a number of issues, Congressman, that have been 
raised over the last year. It wouldn't surprise me if that was 
also included.
    I would like to add on your question about the use of our 
web page on the Internet. There are three major benefits that 
we see. One, in addition to just informing and educating, we 
are making information readily available for people to use. But 
we're also using the Internet as a way to move to electronic 
submission for certain activities that we oversee.
    Again, this would have the advantage of not only reducing 
the time, but it would be more responsive to the customer. And 
we see this as a way that we can help to provide additional 
information, expedite our service, and lower costs all 
together.

                              regulations

    Mr. Kingston. Well, thank you. Let me just express my 
concern about some of the regulations that government agencies 
come out with. I think often it over steps the boundary of a 
regulatory agency. It should be more the prerogative of a 
legislative body.
    I think you should recommend things. I am very perturbed at 
the FDA's tobacco regulations. I think it is an overreach of a 
bureaucracy. And whether I would have voted for such a proposal 
or not, it's a different issue. To have an agency go out on 
such a power play I think it's really a very bold step in terms 
of just ramming up to the side of the Constitutional authority 
of an agency. So, I hope that you're careful about this one.
    Mr. Medley. Congressman, we have issued an internal agency 
directive; it was very clear that the use of our web page or 
Internet is not in any way a substitute for fully complying 
with the requirements of the Administrative Procedure Act to go 
through substantive rulemaking.
    Mr. Kingston. Also, you had mentioned in one of your 
testimonies about using sound science on the biotech.
    Mr. Medley. Yes.
    Mr. Kingston. I'm very proud to see that statement in 
there. I hope you do that on all your regulations.
    Mr. Medley. Thank you.
    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Skeen. Thank you, Mr. Kingston. Let's go back to the 
port of entry situation with fruits and vegetables. On a recent 
trip through Hawaii, we visited the research station there for 
the fruit fly relative to the papaya production.
    What an enormous affect this had on eradicating the problem 
with the fruit flies, as well as developing a strain of 
papaya's that are much more resistant to them. It was a totally 
absorbing experience. But that's exactly what Mr. Serrano has 
been talking about. That's what's been going on in Puerto Rico 
and in places like Hawaii because of the island atmosphere.
    I think it illustrates exactly what your Department does in 
that connection. The research has been tremendously valuable.
    I would like to move on to GIPSA at this point. Mr. Baker, 
Jim, excuse me, this is a formal hearing. Jim, it's good to see 
you again and I enjoyed the visit we had and appreciated 
reading the articles you left with me. None of them were valued 
over $5.
    We've been hearing for quite sometime now about the 
concentration of the meat packing industry. Would you give us a 
rundown on what that situation is and what affect it's having 
on the meat production and processing?

                         meat packing industry

    Mr. Baker. In the last few years, Mr. Chairman, the meat 
packing industry has become more concentrated; quite a bit 
more, especially in the fat cattle production and in beef 
cattle production. But we also see it in hogs, pork production, 
and poultry where the companies that are surviving are the ones 
that merge, become larger and more complex.
    It is perceived, and maybe rightly so, that it puts the 
producers at an unfair disadvantage to deal when so few 
peoplehave control of such a large share. So, we're tasked with the 
responsibility to make sure that there is an open marketplace out there 
and that no manipulation or deceptive practices are being used that 
would cause the producer to get an unfair price.
    We take that responsibility very seriously. We're asking 
for additional money in our budget to channel more resources to 
tackle this problem, both in poultry and in livestock.
    Mr. Skeen. We appreciate your effort because it's had a 
tremendous affect on beef prices for one. Along that line too, 
I'd like to ask you if there is any prohibition or control over 
the packers, major packers, in this particular group of three 
or four major packers.
    We've got them feeding their own livestock so they'd have a 
fall-back. If the prices are high, they can fall-back on the 
stuff they've got in their yards and so forth. That charge has 
been made time and time again. I don't know what the validity 
of it is, but could you tell us?
    Mr. Baker. The law does not prohibit a packer from feeding 
cattle. Our statistics show that the packers own about four 
percent of the production in this country; four percent are 
packer-fed, packer-owned.
    Mr. Skeen. That's not believed to be a significant role, 
but 4 percent of a fatty market is a big chunk.
    Mr. Baker. Well, that's what our statistics show at this 
time. But it's perceived that that's a highly leverageable 
position to be in, in a depressed market, or that such 
arrangements can control the market. Our evidence doesn't 
support that at this time. But there is no law against a packer 
feeding their cattle.
    Mr. Skeen. But it's a common practice even amongst the 
largest packing interests.
    Mr. Baker. It truly is in the poultry industry. In the pork 
industry it truly is. It's 4 percent in the beef industry. My 
question to people in this area is where do they buy that 
production at? Who do they buy it from?
    Mr. Skeen. It had to come from a primary producer 
somewhere.
    Mr. Baker. That's right. They buy in the same market that 
Jim Baker buys in. And you talk to market operators where these 
people buy livestock, they're proud to have them there. It 
creates a good competitive market procuring those cattle.
    Mr. Skeen. But the fact is market prices also have an 
affect on the primary producer as well. If you can control the 
fat market over there, you can have a hell of an affect on the 
feeder market along with a primary producer.
    Mr. Baker. That's true. The end value of the product on the 
fat cattle end of it is a pretty well ripple effect back to the 
price of other animals.
    Mr. Skeen. Well, there's been a lot of criticism about that 
situation. Of course there are fewer and fewer primary 
producers these days because of the drop in the market.
    Mr. Baker. This is true. It reminds us that it is a 
cyclical business. There will be ups and downs in it. I dare 
say that there is probably manipulation in areas that we 
haven't discovered, but we have a presence there. I believe 
we've had a valid presence there.
    Mr. Skeen. Well, I appreciate your response. Mr. Fazio.

                 bovine spongiform encephalopathy (bse)

    Mr. Fazio. Thank you, Mr. Chairman. Many of us in the 
Washington area read the mad cow feature in the Washington Post 
over the weekend.
    And I just wanted to ask Mr. Dunn, or anyone else at the 
table, to discuss with us some of the debate within the 
Department on whether or not we're doing an adequate job in 
this area or whether or not, as some would advise, we try to go 
further in standards and regulation that might prevent the kind 
of infection we have within the wool industry, the scrapie 
problem, crossing over into impacting on the cattle industry in 
a way that would not only obviously damage them for domestic 
consumption, but would limit their export potential.
    Mr. Dunn. We've long had a voluntary scrapie program here 
at the Department of Agriculture and have helped folks to 
reduce the occurrence of scrapie in their herds. In the late 
1980s when we became aware of the problem of the Bovine 
Spongiform Encephalopathy in the UK and its potential link to 
the Creutzfeldt-Jakob disease, the USDA quarantined cattle 
coming in from the UK. We had a herd of around 490. We were 
able to follow that herd. We kept track of where they were. 
Last year we assisted the State Departments of Agriculture and 
others in acquiring those animals and euthanizing them and 
ensuring that they would not get into the food chain of either 
humans or animals.
    But the specifics of the ruminant-to-ruminant feed and 
where we are on that, I'm going to ask Mr. Medley to address. 
Just about a year ago we had a meeting, USDA-sponsored, and had 
about 150 scientists and regulators from the nation to take a 
look at this potential because we saw this as a real and a 
perceived crisis here in the United States. And we did not want 
to have the hysteria that we saw in the UK take place.
    Mr. Fazio. We all know that perception can be reality in 
food production as well as politics.
    Mr. Dunn. Yes.
    Mr. Fazio. Okay.
    Mr. Medley. Congressman, in this area of Bovine Spongiform 
Encephalopathy (BSE) and the activities that we've conducted at 
APHIS with our sister agencies, Food Safety Inspection Service, 
the Food and Drug Administration, as well as the Centers For 
Disease Control, we can say that it has not been detected in 
the U.S.
    We feel that with these measures that we will prevent BSE 
from occurring. We are, however, very concerned about making 
sure that we continue to re-evaluate, to re-assess, and to 
assure that our policies are the best policies possible for 
preventing BSE from occurring.
    With regard to scrapie, you might be aware that recently 
because of the situations raised, we did suspend the 
importation on sheep and goat and certain embryos. We have sent 
out a survey to a number of countries to look at what systems 
they have in place for attesting to the disease status of their 
livestock population.
    We will continue to monitor this situation. We will 
continue to participate in international discussions and forums 
and make those adjustments that are necessary. We do support 
and we have provided comments on the FDA ruminant-to-ruminant 
ban.
    We feel that collectively all of the agencies are 
takingthose steps that are necessary to protect our U.S. livestock 
population. The article discussed the measures that we are taking and 
it talked about whether or not there were more. It did evaluate BSE 
measures as being adequate.
    Mr. Fazio.  At the moment the Department does not feel that 
the FDA's ruminant-to-ruminant ban recommendation is required? 
It essentially agrees with people in the industry, people 
representing the feed industries and the rendering industries 
that we may well have a disposal problem; carcass, solid waste 
disposal problem and other impacts, including severe financial 
effects? It would make it prohibitive to take a ban approach 
here?
    Mr. Medley.  No. The Department, both APHIS and the Food 
Safety Inspection Service, did provide our comments to FDA in 
support of the ruminant-to-ruminant ban that they were 
proposing. We do acknowledge the issues that you've raised 
about disposal and waste. FDA had three specific options. One 
they proposed. A second option was a tissue specific ban and a 
third option which was a mammalian-to-mammalian ban. We support 
their recommended option of the ruminant-to-ruminant ban.
    Mr. Fazio.  So, the Department and all its agencies are 
together on this.
    Mr. Medley.  Yes.
    Mr. Fazio.  Implementation?
    Mr. Medley.  There are a lot of questions that will be 
raised if FDA adopts the recommendation as a final rule, e.g. 
what would be the implementation requirements?
    Mr. Fazio.  That's suddenly come back to you?
    Mr. Medley.  No.
    Mr. Fazio.  Who will actually implement the ban?
    Mr. Medley.  Because we're talking about animal feed, that 
will involve FDA, as well as FSIS as it relates to humans, but 
it involves States because States collect a lot of these 
records and perform many related activities.

                    Sanitary/phytosanitary standards

    Mr. Fazio.  One more question, Mr. Chairman. And this 
really goes to, I think, APHIS again. And that is the whole 
question of phytosanitary restrictions that are now a major 
issue in international trade. Lon mentioned earlier some 
allusion to this, but how much of your agency's time and 
resources are being spent to assist the elimination of what I 
think are often unfair trade standards that are being imposed 
for pseudo-scientific reasons?
    And on the other hand, are you engaged much in a 
countervailing question and that is the degree to which others 
want to import to this country? Who may or may not have reached 
standards that are acceptable to our consumers?
    Mr. Medley. More of our resources are spent addressing 
legitimate sanitary, phytosanitary restrictions than on our own 
import requirements. We find this is one of the new paradigms 
today as it relates to trade; we used to have a ``don't look, 
don't find, don't have'' response that occurred.
    Because of our unique systems and our good university 
structures, we are constantly documenting the health status of 
our plant and animal resources. Today, we have more of a 
requirement to have active surveillance and certification 
programs to prove that plant and animal resources are free of 
pests and diseases.
    We feel that in this new environment, because of our 
infrastructures, we will fare exceptionally well. It does 
require a large amount of resources to respond to the constant 
threat of pests or diseases and the economic impact on trade. 
The only ``legitimate'' issues that should be raised are the 
sanitary, phytosanitary ones.
    Mr. Fazio.  How much shift in resources has occurred in 
your budget for the purposes of meeting this kind of challenge 
in recent years. I know these burdens keep piling up. But what 
are you doing differently to absorb this workload? Are you 
getting increases? Are you re-orienting your current staffing?
    Mr. Medley.  Yes.
    Mr. Fazio.  What's being done that really prepares you to 
handle the burden?
    Mr. Medley.  Congressman, fortunately a large part of our 
resources are provided under our Agricultural Quarantine 
Inspection programs which is under user fees. A number of our 
activities relate to doing pest risk analysis, both on the 
animal and plant side. We received a funding increase in our 
international services area this year.
    And we've pointed out the increased workload in this area. 
In fact in this current budget, there is an increase in that 
line item and recognition of the increased resources that we 
will need.
    Mr. Fazio.  And you can obtain a fee under the manner in 
which you're conducting the work at the moment? Or are you, in 
dealing with generic problems, calling on general fund 
resources that you must mix into your budget?
    Mr. Medley.  Some general fund resources are allocated for 
the pest risk analysis that we perform. We have sought and 
received increases in some line items to cover those.
    Also, we must better utilize our resources in terms of 
cross-utilization. And that is some of what we're doing in our 
regional consolidations. Having these science hubs gives usthe 
infrastructure that would better support these types of new 
responsibilities.
    Mr. Fazio.  If you could supply some information on those 
points for the record, I'd appreciate it.
    Mr. Medley.  Yes.
    [The information follows:]

    The new regional hubs are located in areas that are near 
important science and technical centers for APHIS and provide a 
wealth of research resources for the Agency to draw upon. Both 
locations offer opportunities for APHIS to build upon its role 
as a science-based organization that leads the way in 
anticipating and responding to animal and plant health related 
issues, risk analysis, environmental stewardship and animal 
well-being.

    Mr. Fazio.  Thank you, Mr. Chairman.
    Mr. Skeen.  Mr. Serrano.
    Mr. Serrano.  I have no questions.
    Mr. Skeen.  Well, I think that brings us to the culmination 
of this wonderful exercise. We appreciate very much the 
information you've been forthcoming with, the presentation 
you've made, and the work you do.
    Mr. Dunn.  Thank you, Mr. Chairman.
    Mr. Skeen.  That will also hold open the possibility of 
asking you for written responses to some questions that we may 
ask.
    Mr. Dunn.  We pledge to promptly respond, Mr. Chairman.
    Mr. Skeen.  Thank you very much. We're adjourned.
    [The Animal and Plant Health Inspection Service written 
questions and responses appear on pages 27 through 96. The 
Agricultural Marketing Service written questions and responses 
appear on pages 97 through 144. The Grain Inspection Packers 
and Stockyards Administration written questions and responses 
appear on pages 144 through 173.
               Animal and Plant Health Inspection Service

                       animal welfare enforcement
    Mr. Skeen. Please provide a table showing, by state, the number of 
staff years assigned to the animal welfare program, as well as the 
number of animal care facilities, in each state for fiscal year 1996.
    [The information follows:]

------------------------------------------------------------------------
                                                                No. of  
                     State                      Staff years  animal care
                                                              facilities
------------------------------------------------------------------------
Alaska........................................  ...........           20
Alabama.......................................  ...........           61
Arkansas......................................            1           70
Arizona.......................................            1          195
California....................................           13          464
Colorado......................................            1           79
Connecticut...................................            1           66
Delaware......................................  ...........           13
District of Columbia..........................  ...........            6
Florida.......................................            6          382
Georgia.......................................            2          117
Hawaii........................................            1           46
Iowa..........................................            3          412
Idaho.........................................            1           19
Illinois......................................            4          265
Indiana.......................................            1          165
Kansas........................................            4          488
Kentucky......................................            1           47
Louisiana.....................................            1           51
Massachusetts.................................  ...........          145
Maryland......................................           34           70
Maine.........................................  ...........           27
Michigan......................................            1          165
Minnesota.....................................            1          186
Missouri......................................            8        1,153
Mississippi...................................  ...........           26
Montana.......................................  ...........           34
North Carolina................................            1           96
North Dakota..................................            1           45
Nebraska......................................            2          192
New Hampshire.................................            1           24
New Jersey....................................            1          119
New Mexico....................................            1           36
Nevada........................................            1           67
New York......................................            2          295
Ohio..........................................            3          190
Oklahoma......................................            4          421
Oregon........................................            2          106
Pennsylvania..................................            3          332
Puerto Rico...................................  ...........           28
Rhode Island..................................  ...........           18
South Carolina................................  ...........           36
South Dakota..................................            1          114
Tennessee.....................................            1           69
Texas.........................................           14          483
Utah..........................................            1           27
Virginia......................................            1           80
Vermont.......................................            1           11
Washington....................................            1           86
Wisconsin.....................................            2          151
West Virginia.................................  ...........           33
Wyoming.......................................  ...........            4
Guam..........................................  ...........            2
                                               -------------------------
      Total...................................          129        7,837
------------------------------------------------------------------------

                              stolen dogs
    Mr. Skeen. As a result of an Office of the Inspector General 
review, APHIS was developing legislation to strengthen and improve the 
agency's authority regarding stolen dogs. What is the status of this 
legislation?
    Response. Legislation is currently at the Department which would, 
if passed, make it illegal to sell random source animals. The Class B, 
random source dealers, a suspected area of outlet of the stolen pet 
trade, would be significantly impacted and eliminated.
                              animal care
    Mr. Skeen. A training manual to increase the quality, uniformity, 
and standardization of inspections and reports of the Animal Care 
program is being developed at the agency. When can we expect this 
manual to be distributed and used by all animal care personnel?
    Response. We have been developing the manual for over 3 years. The 
first section of the manual, relating to Animal Care Policies, will be 
released in the spring of 1997. The remainder of the manual will be 
finalized in late 1997 or early 1998.
    Mr. Skeen. Provide a table similar to the one that appears on pages 
62 and 63 of last year's hearing record showing inspection activities 
of the animal welfare program for fiscal year 1996.
    [The information follows:]

                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                                                       Average                  
                                                                        Number of     number of    Total number 
                                                                          sites      inspections  of inspections
----------------------------------------------------------------------------------------------------------------
Insepctions for compliance:                                                                                     
    Dealers........................................................           4,265       1.36             5,819
    Research facilities............................................           2,506       1.11             2,790
    Exhibitors.....................................................           2,453       1.16             2,851
    In-transit handlers............................................             417       0.66               275
    In-transit carriers............................................             725       1.24               901
                                                                    --------------------------------------------
      Sub-total....................................................          10,366       1.22            12,636
Other types of inspections:                                                                                     
    Prelicensing and preregistration audits........................             N/A        N/A             1,932
    Auction market observations....................................             N/A        N/A                59
    Inspections of dealers and exhibitors..........................             N/A        N/A             1,363
                                                                    --------------------------------------------
      Sub-total....................................................  ..............  ...........           3,354
      Total Enforcement Activities.................................  ..............  ...........          15,990
----------------------------------------------------------------------------------------------------------------

    Mr. Skeen. Your agency has been drafting regulations for a number 
of years now to amend the animal welfare regulations to ensure that 
farm animals used for regulated research, exhibition, and sale are 
treated humanely in accordance with the Animal Welfare Act. Where in 
the regulatory process are you?
    Response. In response to a request from the Office of Management 
and Budget--OMB--we have conducted a statistically valid random survey 
of existing facilities to determine the economic impact of standards on 
farm animals used in regulated research, exhibitions, and sales. We are 
currently evaluating the results, and will forward them to OMB soon. 
With concurrence from OMB, we hope to publish a proposed rule for farm 
animals used for these purposes during the summer of 1997.
    Mr. Skeen. What is the status of proposing regulatory changes 
regarding the presence of scars on horses?
    Response. APHIS has incorporated a proposed scar rule regulatory 
change into our strategic enforcement plan, which is currently in 
Department clearance. This regulatory proposal would place greater 
emphasis on disqualifying horses with evidence of scarring. We plan to 
conduct a joint review of the scar rule proposal with horse industry 
representatives as well as other concerned parties during the spring of 
1997.
                 regulatory enforcement and animal care
    Mr. Skeen. Update the table that appears on page 86 of last year's 
hearing record showing the funding levels, both dollars and staff, 
allocated for Regulatory Enforcement and Animal Care to include fiscal 
year 1997.
    [The information follows:]
                          reac funding history

                         REGULATORY ENFORCEMENT                         
------------------------------------------------------------------------
                                                     Funding      Staff 
                  Fiscal year                    (appropriated)   years 
------------------------------------------------------------------------
1989...........................................      $4,516,355      123
1990...........................................       4,844,844      131
1991...........................................       5,789,519      121
1992...........................................       5,904,459      141
1993...........................................       5,623,823      125
1994...........................................       5,958,354      129
1995...........................................       5,858,926      119
1996...........................................       5,892,726      107
1997...........................................       5,855,000      107
------------------------------------------------------------------------


                               ANIMAL CARE                              
------------------------------------------------------------------------
                                                     Funding      Staff 
                  Fiscal year                    (appropriated)   years 
------------------------------------------------------------------------
1989...........................................      $5,928,003      154
1990...........................................       7,688,947      174
1991...........................................       9,224,947      184
1992...........................................       9,447,313      184
1993...........................................       9,796,411      179
1994...........................................       9,755,805      183
1995...........................................       9,585,218      178
1996...........................................       9,766,427      157
1997...........................................       9,545,000      155
------------------------------------------------------------------------

    Mr. Skeen. Also update the table that appears on the same page 
showing the number of: dealer facilities; complaints registered against 
these facilities; inspections and re-inspections that took place; cases 
submitted by Animal Care to Regulatory Enforcement for review and 
action; and each case's resolution to include fiscal year 1996.
    [The information follows:]

                 REGULATORY ENFORCEMENT AND ANIMAL CARE                 
------------------------------------------------------------------------
                                               Fiscal year--            
             Category             --------------------------------------
                                       1994         1995         1996   
------------------------------------------------------------------------
Total number of facilities.......        7,869        7,966        7,837
Complaints registered............          642          566          508
Inspections/re-inspections.......       14,778       14,722       12,636
Cases submitted to IES...........          719          425          370
Resolution: Official warnings....          389          263          182
Stipulations.....................           78           85           45
Formal admin. decisions..........           44           35           84
Civil penalties..................     $345,900     $451,725   $1,050,590
Suspensions/revocations..........           23           19           29
------------------------------------------------------------------------

    Mr. Skeen. How many unannounced inspections of registered in-
transit carriers and in-transit intermediate handlers were conducted in 
fiscal year 1996?
    Response. We conducted 901 unannounced inspections of registered 
in-transit carriers and 275 unannounced inspections of in-transit 
intermediate handlers.
    Mr. Skeen. What were the findings and recommendations of the 
February 1996 public hearings that were held in Missouri and Kansas to 
solicit input from the public regarding animal welfare issues?
    Response. The three public meetings held in St. Louis, Missouri, 
Kansas City, Missouri, and Washington, DC generated many useful 
findings and recommendations. Several of the major recommendations 
included: (1) increasing education of both USDA inspectors and the 
affected industries; (2) strengthening enforcement of existing 
regulations; (3) promoting greater uniformity in interpretation of 
regulations by USDA inspectors' (4) not regulating breeding frequency; 
(5) prohibiting random source ``Class B'' dealers from selling to 
research entities; and (6) prohibiting Class B dealers from purchasing 
animals from unlicensed individuals or entities. As a result of these 
recommendations, we are increasing education of USDA inspectors and 
affected industry, strengthening enforcement of existing regulations, 
and promoting greater uniformity in interpreting regulations by USDA 
inspectors. We have decided not to regulate breeding frequency at this 
time. We are reviewing whether or not to prohibit random source ``Class 
B'' dealers from selling to research entities and to prohibit ``Class 
B'' dealers from purchasing animals from unlicensed individuals or 
entities. If we decide to implement these prohibitions, a legislative 
change will be required.
                              animal care
    Mr. Skeen. Why was there a 13 percent decrease in the number of 
animal care investigations in fiscal year 1996?
    Response. Several factors contributed to the 12.5 percent reduction 
in the number of inspections conducted at licensees and/or registrants 
during FY 1996. First, the number of full-time equivalent positions 
fell from 69 in FY 1995 to 64.5 in FY 1996, a reduction of 8 percent. 
This was partially attributable to individuals leaving and in some 
cases not being replaced, i.e., a conscious decision to streamline the 
work force was made following the guidelines of the Agency, Department, 
and Administration's efforts at right-sizing our organization; and 
several individuals on extended sick leave and/or leave without pay 
during much of the year. Another factor was an increase in the number 
of prelicensing inspections, which rose from 1,853 to 1,932, a gain of 
nearly 5 percent. In addition to conducting more of these 
inspections,significant efforts are being devoted to educating new 
licensees and registrants in the mission and objectives of the Animal 
Care program, which we hope will translate into improved compliance. 
Significant resources were devoted to our major Animal Care Strategic 
Direction initiative, out of which eight employee-based teams were 
formed. The teams are currently examining the program's direction, and 
will be making recommendations for improvement. These efforts, taken 
together, impacted our ability to conduct inspections at licensees and 
registrants in the short run, but should pay long-term dividends in 
improving the quality of enforcement and the degree of cooperation by 
our regulated entities.
    Mr. Skeen. How many violations discovered during a compliance 
animal care inspection remained uncorrected at the time of the 
reinspection visit during fiscal years 1995 and 1996?
    Response. APHIS does not maintain data on the collective number of 
violations which remained uncorrected at the time of reinspection 
visits. All uncorrected violations require follow-up by the inspector 
and respective Animal Care regional office to ensure correction of all 
deficiencies. Matters not corrected are forwarded for initiation of 
legal action. As a result of uncorrected items found during our 
reinspection process, 370 request for investigation were made during FY 
1996.
    Mr. Skeen. What is the status of the legislative proposal drafted 
in fiscal year 1996 to strengthen the authority of the Animal Welfare 
Act?
    Response. The Department is continuing to consider changes to 
strengthen our enforcement authority under the Animal Welfare Act. The 
proposed changes to the Act have been forwarded and are currently 
undergoing review at the Department.
    Mr. Skeen. What is the status of the pilot projects initiated in 
Kentucky, North Carolina, and South Carolina to conduct animal welfare 
inspections at airports?
    Response. During the first phase of the project which started in 
October 1996. APHIS Veterinary Services--VS--personnel were trained in 
conducting animal welfare inspections at airports. The second phase is 
in progress, and VS personnel have conducted 20 inspections of airport 
facilities. After completion of the second phase in late 1997 or early 
1998, we will evaluate the project to determine its effectiveness. So 
far, results have been very favorable.
    Mr. Skeen. What is the status of the formulation of an animal care 
outreach program and the development of initial plans for industry 
training?
    Response. We established a full-time position dedicated to the 
Animal Care outreach program. A key program objective is to submit a 
report of Animal Care activities to industry stakeholders. We will 
publish the first quarterly report on March 14, 1997, and will be 
mailed to stakeholders and other interested parties. The report 
discusses Animal Care's mission, objectives, and accomplishments.
    APHIS has also established two employee-based teams to develop 
initial plans for industry training. One group is focusing on training 
needs of our own Animal Care inspectors, and the other on specific 
industry group needs. Training will begin early in Fiscal Year 1998.
    In addition, we recently launched a public affairs campaign to 
better educate the general public about the Animal Care mission. In the 
coming weeks, we will develop many new communications products 
including fact sheets, brochures, and exhibits to educate government 
officials, the general public, animal protection organizations, and 
regulated industries about the purpose and activities of our Animal 
Care organization.
                    Horse Protection Act Enforcement
    Mr. Skeen. What is the status of the plan to enhance the regulatory 
responsibilities of the horse industry and redirect APHIS' regulatory 
industry in their enforcement of the Act?
    Response. We developed a strategic enforcement plan for Horse 
Protection. This plan, now under review, incorporates extensive 
information gained from all sectors of the horse industry and others 
during three public forums, Federal Register comments, and write-in 
campaigns during FY 1996.
    We anticipate finalizing the strategic plan during the spring of FY 
1997. We will make the plan available to the horse industry to seek 
final consensus. The plan contemplates delegating greater horse 
inspection responsibilities to USDA-certified horse industry 
organizations.
                              brucellosis
    Mr. Skeen. At this time last year, we were down to 50 herds under 
quarantine in the United States for brucellosis, of which 34 herds were 
located in the State of Texas. Where do stand today?
    Response. As of February 28, 1997, there are 26 herds under 
quarantine in the United States for brucellosis. There are 22 in Texas, 
and one each in Florida, Kansas, Oklahoma, and South Dakota.
    Mr. Skeen. Provide a five-year table, including estimates for 
fiscal year 1998, that shows the amount spent on brucellosis infected 
bison at Yellowstone National Park. Also, provide a brief explanation 
of how these funds were used.
    [The information follows:]

              YELLOWSTONE NATIONAL PARK BRUCELLOSIS PROGRAM             
------------------------------------------------------------------------
                                Amount                                  
            Year                spent            How it was spent       
------------------------------------------------------------------------
1994........................    $30,000  Personnel, travel, laboratory  
                                          support.                      
1995........................    155,000  Personnel, travel, research in 
                                          YNP, supplies, laboratory     
                                          support.                      
1996........................    300,000  Personnel, travel, research in 
                                          YNP, supplies, laboratory     
                                          support.                      
1997........................    400,000  Personnel travel, research in  
                                          YNP, supplies, laboratory     
                                          support.                      
1998 (est)..................    700,000  Personnel, travel, two research
                                          projects using YNP bison,     
                                          supplies, laboratory support. 
------------------------------------------------------------------------

    Mr. Skeen. In 1989, APHIS adopted the Rapid Completion Plan for the 
eradication of brucellosis. The objective of this plan is to have all 
states qualifying for Class Free status by 1998. Are you on-track to 
meet this goal?
    Response. APHIS' goal continues to be having all States qualify for 
Class Free status by the end of 1998. In May 1997, the Agency will meet 
with program officials of Class A States to plan accelerated program 
activities in the coming months to ensure that these States will meet 
the established goal.
    Mr. Skeen. The swine brucellosis program was expected to reach its 
goal of eradication by December 1996. Did you achieve this goal?
    Response. Increased surveillance has identified more affected herds 
than anticipated, thus the December 1996 goal will need to be extended. 
At this time no new date has been established.
    Mr. Skeen. APHIS along with other Federal agencies and Montana 
State officials are developing a long-term bison management plan to 
reduce the risk of spreading brucellosis and decreasing the need for 
lethal control methods. The environmental assessment was expected to be 
completed by May 1996. What is the status of this issue?
    Response. The Environmental Assessment--EA--was completed in August 
1996, on the proposal to establish ``Brucellosis Management Areas'' in 
Montana where certain Yellowstone bison would be allowed to remain 
during specified periods of time. An amended interim management plan 
supported by the EA was implemented in October 1996. Several 
environmental groups filed a lawsuit and requested an injunction 
preventing implementation of these new procedures, but the injunction 
was denied. Due to the severe winter weather in Yellowstone National 
Park--YNP--and an increase in the bison population within the park, a 
greater number of bison migrated from YNP this season than in previous 
years. However, under the amended interim management plan, it was 
necessary to kill fewer bison than would have been killed under the 
original plan.
    Mr. Skeen. Why does the number of newly infected brucellosis herds 
increase from 141 in fiscal year 1995 to 202 in fiscal year 1996?
    Response. The number of newly infected brucellosis herds found in 
FY's 1995 and 1996 were transposed. The number of newly infected 
brucellosis herds has actually declined from 202 in FY 1995 to 141 in 
FY 1996. As of February 1997, we had identified 112 newly infected 
herds.
    Mr. Skeen. How many brucella vaccine research studies are scheduled 
for fiscal year 1997?
    Response. There are eight brucella vaccine research studies funded 
in FY 1997. These studies include: Brucella abortus RB51 vaccine safety 
and efficacy in (1) pregnant YNP bison in Idaho, (2) pregnant bison in 
Texas, and (3) pregnant elk in Wyoming; (4) Brucella abortus RB51 
vaccine safety and efficacy in bison vaccinated as calves in Ames, 
Iowa; Brucella abortus RB51 vaccine safety in (5) bison calves, (6) 
bison bulls, and (7) bison yearlings; and, evaluation of the potential 
for shedding of (8) Brucella abortus RB51 from vaccinated animals into 
the environment and to other species.
    Mr. Skeen. An Environmental Impact Statement on brucellosis in 
Yellowstone National Park is scheduled for release in December 1997. 
Are there any preliminary findings and recommendations? If so, what are 
they?
    Response. There are no preliminary findings or recommendations at 
this time.
    Mr. Skeen. When do you expect to complete a project to study the 
transmission of brucellosis between bison in YNP?
    Response. The study is scheduled for completion in May 2001.
    Mr. Skeen. The U.S. Animal Health Association has urged State 
veterinarians to consider the threat of brucellosis among cattle 
shipped from Wyoming, Idaho, and Montana. A number of States have 
restrictions on imports of untested cattle from Wyoming. Give the 
Committee an update of this issue.
    Response. Federal regulations permit cattle from Class Free States 
to move between states without being tested for brucellosis. The 
presence of free roaming brucellosis infected and exposed bison from 
YNP in the States adjacent to the park has raised questions of whether 
the Class Free designation of these States accurately reflects their 
disease status. This concern has caused certain States to impose 
additional testing requirements on cattle imported from Wyoming and 
Montana to protect their own cattle populations from possible 
infection. Currently, only Alabama requires cattle from Wyoming to 
undergo additional testing. Although more States are considering 
similar restrictions on cattle from this area, additional sanctions are 
on hold until an independent panel, facilitated by APHIS, conducts a 
review of Wyoming's brucellosis control program. On March 18, 1997, 
Oregon lifted its requirements for testing of Wyoming cattle until the 
Wyoming program review is completed. The panel's findings are expected 
to be completed by July 1, 1997.
    Mr. Skeen. Provide the Committee with an update on the status of 
the four swine herds affected with brucellosis in the U.S.
    Response. Those four herds have been depopulated. However, APHIS 
has placed 5 additional herds under quarantine in Florida. These herds 
are scheduled for depopulation in spring of 1997. As of March 28, there 
was one affected seine herd in Texas. This herd will be depopulated 
shortly.
                               Screwworm
    Mr. Skeen. At this time last year, the U.S., Mexico, Guatemala, El 
Salvador, and Honduras were screwworm-free and Nicaragua was the focal 
point of program eradication efforts. Give us a status of what has been 
accomplished to date and what still needs to be done.
    Response. Due to successful eradication and surveillance 
activities, Honduras was declared screwworm-free in August 1996 after 
country wide reviewswere completed to verify their screwworm-free 
status. The U.S. participation in the cooperative program ended in 
September 1996 and the Ministry of Agriculture in Honduras has assumed 
responsibility for continuing surveillance and inspections.
    Nicaragua is no longer considered infested but is still at risk 
from infested areas in Costa Rica. Only 11 screwworms have been 
detected in Nicaragua since July 1996 along the Costa Rican border. 
Operations are shifting from eradication to surveillance to ensure no 
additional infestations occur. The program currently releases 
approximately 80 million sterile flies per week over the entire country 
and conducts prevention, surveillance, and control activities. The 
program will maintain prevention and surveillance activities through 
the rest of 1997.
    The focal point of eradication is shifting to Costa Rica where 
cooperative program activities began in October 1995. In FY 1996, the 
program established operations in Costa Rica and is releasing 
approximately 60 million sterile flies per week from a dispersal center 
in Managua, Nicaragua. Active eradication and aerial dispersal began in 
April 1996. Aerial dispersal over the entire country began in October 
1996. No positive screwworm samples have been collected so far in the 
program although full-scale field operations will begin in April of FY 
1997. The sterile fly dispersal program is on schedule. We expect that 
eradication will be achieved in 1998 and that the Costa Rica-U.S. 
program will be closed in 1999.
    In Panama, eradication and surveillance activities have not begun. 
The program will conduct a privatization study, architectural and 
engineering work, and other tasks in preparation for construction of a 
new sterile screwworm facility in Panama. The Government of Panama 
provided a site near the international airport in Panama City.
    Mr. Skeen. Are you still on schedule to begin eradication efforts 
in Panama during fiscal year 1997, reaching the Darien Gap in fiscal 
year 1999?
    Response. The U.S. Department of State and APHIS have agreed to 
begin moving screwworm program personnel from Mexico to Panama by July 
1997. We expect to begin eradication activities in Panama in FY 1998 
and anticipate having screwworm eradicated down to the Darien Gap by 
the end of FY 1999. Once eradication complete, the program will begin 
maintaining a biological barrier.
    Mr. Skeen. Your agency hired an independent outside contractor to 
study issues related to building a new rearing facility at the Isthmus 
of Panama. What were the results and recommendations of this study?
    Response. The independent study team report contained three major 
recommendations: (1) the new sterile fly production facility should be 
located in Panama; (2) the five APHIS positions, currently located in 
Mexico City, should be relocated to Panama to begin the many 
preliminary tasks necessary in organizing eradication activities and 
initiating plant construction; and (3) the new plant should be built 
and operated by the bilateral Panama-U.S. Commission, but that every 
effort should be made to identify components of plant operations that 
can be cost effectively privatized.
    Mr. Skeen. Briefly describe the concerns of the Department of State 
and the government of Panama concerning the construction of this 
facility.
    Response. The main concern of the U.S. Embassy in Panama is 
privatization of the proposed screwworm facility in Panama. Embassy 
officials have stated that the U.S. Government policy in recent years 
has been to encourage Central American countries to privatize state-
operated activities such as telephone utility companies. These same 
officials feel that the APHIS plan to operate and manage a screwworm 
facility in Panama through a bilateral commission structure is 
inconsistent with privatization policies and would send the wrong 
signal to other countries.
    The principal concern of the Government of Panama is to start the 
program as soon as possible. In February 1994, an agreement was signed 
to conduct a screwworm eradication program through a bilateral Panama-
U.S. Commission. In May 1994, the Government of Panama deposited more 
than $11 million in the Joint Commission bank account in Panama as part 
of its contribution toward screwworm eradication and construction of 
the proposed plant. The Panamanian Minister of Agriculture has publicly 
stated that the Government of Panama has fulfilled all of its 
commitments under the agreement and wants the program to begin.
    Mr. Skeen. You state in the budget justifications that once the 
screwworm program reaches the Darien Gap in Panama, other affected 
nations will provide assistance to maintain the barrier. Do you already 
have financial commitments from these other nations? If so, how much 
will you receive from them? If not, what makes you think they will be 
willing or able to contribute financially to the program?
    Response. The only other country that has committed to contributing 
to the barrier maintenance program at the Darien Gap is Panama. The 
maintenance program will be funded jointly by the United States and 
Panama through a joint Panama-U.S. Screwworm Commission.
    Mexico, Belize, Guatemala, El Salvador, and Honduras maintain 
ongoing commitments to prevention and surveillance activities that 
ensure their screwworm-free status.
    At this point we do not expect other countries will provide 
contributions to the barrier maintenance program at the Darien Gap. If 
other countries, or groups of countries, in the region detect 
screwworms at levels that pose a risk to domestic and export markets, 
they may be able to purchase flies from the Panama facility at levels 
sufficient to conduct control programs. If this should occur, the 
Panama-U.S. Commission will take steps to ensure sufficient supplies 
for the primary objective of barrier maintenance at the Darien Gap. 
Through collaboration among the Panama-U.S. Commission and nearby 
countries, the integrity of the barrier can be maintained.
    Although few countries in the hemisphere have the financial 
capacity to conduct screwworm control programs alone, countries that 
experience screwworm populations that pose significant risk to domestic 
and export markets might be willing cooperate with each other to 
purchase flies from the Commission.
                         Foot-and-Mouth Disease
    Mr. Skeen. APHIS and the Colombian Agriculture Institute, ICA, 
operate a cost sharing foot-and-mouth eradication program. What is the 
status of this initiative as well as its cost?
    Response. APHIS provides financial and technical assistance to the 
cooperative Foot-and-Mouth Disease--FMD--control program in a 50/50 
cost-sharing agreement with the ICA. The program continues to maintain 
the FMD-free area inColombia, which is contiguous with and southeast of 
the border with Panama, and serves as the ``first line of defense'' for 
preventing the spread of FMD northward into Panama, Central America, 
Mexico, and the United States. This free area has nearly one million 
head of cattle.
    The total operational and support costs for this work was 
$1,871,000 in FY 1996 and is estimated to be $1,838,000 in FY 1997. In 
FY 1998, APHIS is requesting to maintain program activities at the 
current level. ICA has voluntarily increased its contribution to cover 
63 percent of the program costs.
    Organizations of cattle producers also contribute funds to 
supplement program costs. In FY 1995, the Colombian livestock sector 
started participating more actively in FMD eradication activities. From 
1995 to 1997, Colombian cattle producers have contributed approximately 
US$6 million to promote FMD eradication.
    In FY 1996, ICA and USDA agreed to expand the FMD program eastward 
toward the Venezuela border to substantially reduce the risk of FMD 
introduction into Panama and the FMD-free areas of Colombia. Currently, 
this expansion is only active on the north coast of Colombia.
    The presence of FMD in Central America would pose a constant threat 
of spread to the United States. By maintaining the capability to 
quickly detect and diagnose threats to Central America, we are 
providing an extremely cost-effective insurance policy for our own 
industry and economy.
    Success of this program can be measured by the gradual increase in 
the FMD-free areas in Colombia, which results in increased protection 
to Panama, Central America, Mexico, and the United States. This 
program, which provides one of two FMD barrier programs in the world, 
serves as a model for other countries seeking to eradicate FMD.
    Mr. Skeen. Bovine embryos were imported from Venezuela and Zimbabwe 
in fiscal year 1996. Both countries are affected with Foot and Mouth 
Disease (FMD). What are these embryos used for and why are they 
imported from FMD positive countries.
    Response. The embryos were transferred to female cattle to produce 
offspring. The purpose of these two commercial projects was to enhance 
the U.S. bovine genetic pool with cattle breeds not previously 
available in the United States. APHIS veterinarians participated 
directly in both import projects to ensure that safety and biosecurity 
measures were strictly enforced.
                        Mediterranean Fruit Fly
    Mr. Skeen. How much funding will be devoted to each country where 
medfly work is being done in fiscal year 1997?
    Response. APHIS cooperates with Mexico and Guatemala in 
eradication, trapping, and sterile fly production activities to exclude 
Mediterranean fruit fly--Medfly--from the United States. In FY 1997, 
APHIS will devote $1,867,000 to direct eradication activities in Mexico 
and $3,410,000 for those activities in Guatemala. In the United States, 
$6,700,000 is devoted to production and prevention activities.
    Mr. Skeen. Update the table that appears on page 99 of last year's 
hearing recording the total funding for medfly work and the source of 
the funding.
    [The information follows:]

Authorized funding from CCC for medfly emergency in California \1\

Fiscal year:
    1990................................................     $31,424,000
    1991................................................       5,710,215
    1992................................................       9,500,000
    1993................................................      25,860,000
    1994................................................       4,118,000
    1995................................................      10,261,000
    1996................................................      10,000,000
    1997................................................................

\1\ Amounts shown were authorized; however, amounts obligated differ 
because any unobligated amounts carried forward to the next fiscal year.

    Following successful termination of the Medfly Emergency program in 
California in June 1996, a Medfly prevention program began in July 1996 
in the Los Angeles Basin to mitigate the risk of further Medfly 
introductions into the area. The cost of the current Prevention Release 
Program is estimated at $10 million per year--shared equally by USDA 
and the California Department of Food and Agriculture. APHIS 
contributes $5 million from appropriated funding.
    Mr. Skeen. Briefly describe the new Temperature Sensitive Lethal 
strain of sterile Medfly and tell the Committee how it differs from the 
old strain.
    Response. The Temperature Sensitive Lethal--TSL--strain has a 
mutant gene in the females that is sensitive to temperature. Female 
Medflies with this temperature sensitive trait die at temperatures 
above 31+C. Males have the dominant wild gene and are not temperature 
sensitive. If all eggs are put in a water bath, at 32+C, the females 
are killed and the males survive. This eliminates the cost of rearing 
females which are not required in sterile insect release techniques. 
This makes the TSL strain cheaper to produce.
    We also expect the TSL strain will be more effective in eradication 
efforts. APHIS plans to fully integrate TSL into Moscamed operation 
over the next two years. Research by ARS in Hawaii and the 
International Atomic Energy Agency shows that all male strains caused 
significantly better Medfly population suppression that sexually mixed 
steriles. The TSL Response strain provides for efficient, effective, 
and ecologically safe Medfly eradication programs by offering several 
advantages over current methods including: (a) an estimated 30-40 
percent saving in sterile fly rearing costs; (b) avoids ovipositional 
``sting'' damage on fruit by sterile females which makes the fruit 
susceptible to disease and insects; (c) more effective and competitive 
male flies which disperse better are more likely to mate with more wild 
females; and (d) better genetic stability than other all-male strains.
                              Pseudorabies
    Mr. Skeen. Please update the tables that appear on pages 53 and 54 
of last year's hearing record showing the amounts, both federal and 
non-federal, that each state expended on the pseudorabies program as 
well as the stage each state was in to include fiscal year 1996 
actuals.
    [The information follows:]

                                            PSEUDORABIES EXPENDITURES                                           
----------------------------------------------------------------------------------------------------------------
                                     Fiscal year 1996 actual    Fiscal 1997 estimate        Fiscal year 1998    
                                   ----------------------------------------------------         estimate        
               State                                                                   -------------------------
                                      Federal    Non-Federal    Federal    Non-Federal    Federal    Non-Federal
----------------------------------------------------------------------------------------------------------------
Alabama...........................       $4,808      $81,235       $5,048      $82,860       $5,048      $82,860
Alaska............................          477        4,000          501        4,000          501        4,000
Arizona...........................          452        7,419          475        7,567          475        7,567
Arkansas..........................       12,854       21,771       13,497       22,651       13,497       22,651
California........................        4,664      622,481        4,898      634,931        4,898      634,931
Colorado..........................       87,383        2,000       91,752        2,000       91,752        2,000
Connecticut.......................        2,093        4,184        2,198        4,100        2,198        4,100
Delaware..........................        1,708        5,000        1,794        5,000        1,794        5,000
Florida...........................       87,234            0       91,596            0       91,596            0
Georgia...........................        9,573      481,007       10,052      490,627       10,052      500,440
Hawaii............................          226      146,626          237      149,559          237      149,559
Idaho.............................        7,308            0        7,674            0        7,674            0
Illinois..........................      219,451    2,022,120      230,424    2,062,562      230,424    2,062,562
Indiana...........................       92,498    1,000,000       97,122    1,000,000       97,122    1,000,000
Iowa..............................      925,716      885,958      972,002      903,677      972,002      903,677
Kansas............................       13,684       19,016       14,368       19,500       14,368       19,500
Kentucky..........................        9,951      101,620       10,448      103,652       10,448      103,652
Louisiana.........................       57,395            0       60,265            0       60,265            0
Maine.............................        1,520       27,000        1,596       27,000        1,596       27,000
Maryland..........................      527,460            0      531,906            0      516,342            0
Massachusetts.....................        8,549       59,000        8,977       59,000        8,977       59,000
Michigan..........................      144,179      284,331      151,388      290,000      151,388      290,000
Minnesota.........................      622,544      547,724      631,744      558,678      613,259      550,670
Mississippi.......................        8,613       35,000        9,044       35,000        9,044       35,000
Missouri..........................      200,209      185,135      210,219      190,000      210,219      190,000
Montana...........................          473       10,978          497       12,000          497       12,000
Nebraska..........................      162,258      635,707      170,371      648,421      170,371      640,421
Nevada............................          458       18,790          481       19,000          481       19,000
New Hampshire.....................        2,315        3,000        2,431        3,000        2,431        3,000
New Jersey........................       28,275       41,500       29,689       41,500       29,689       41,500
New Mexico........................       11,919            0       12,515            0       12,515            0
New York..........................       95,017       10,000       99,768       10,000       99,768       10,000
North Carolina....................      282,825    3,238,274      296,966    3,303,039      296,966    3,303,039
North Dakota......................       11,717        7,830       12,303        8,000       12,303        8,000
Ohio..............................       87,684      650,000       92,069      650,000       92,069      650,000
Oklahoma..........................       46,820       56,670       49,161       57,000       49,161       57,000
Oregon............................          522        8,191          548            0          548            0
Pennsylvania......................       91,313      429,933       95,878      438,532       95,878      438,532
Rhode Island......................        5,386        1,400        5,656        1,400        5,656        1,400
South Carolina....................       14,540      200,000       15,267      200,000       15,267      200,000
South Dakota......................       67,762            0       71,150            0       71,150            0
Tennessee.........................       12,412      259,696       13,033      264,890       13,033      264,890
Texas.............................      109,193      335,346      114,652      342,053      114,652      342,053
Utah..............................          339        8,000          356        8,000          356        8,000
Vermont...........................          973            0        1,022            0        1,022            0
Virginia..........................       79,840      185,637       83,832      189,350       83,832      189,350
Washington........................          617        5,000          648        5,000          648        5,000
West Virginia.....................        4,083            0        4,287            0        4,287            0
Wisconsin.........................       70,433      323,533       73,955      330,000       73,955      330,000
Wyoming...........................          321        3,500          337        3,500          337        3,500
Wash., DC.........................       96,042            0      100,839            0       97,888            0
Puerto Rico.......................       10,537            0       11,064            0       11,064            0
                                   -----------------------------------------------------------------------------
      Total.......................    4,344,623   12,975,612    4,518,000   13,187,049    4,481,000   13,180,854
----------------------------------------------------------------------------------------------------------------

    States enrolled in the program and the Stage of each as of January 
1, 1997, are as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
              Stage II                    Stage II/III              Stage III             Stage III/IV             Stage IV             Statge V\1\     
--------------------------------------------------------------------------------------------------------------------------------------------------------
Iowa...............................  Indiana...............  California............  Wisconsin............  Alabama..............  Alaska.              
                                     Michigan..............  Florida...............                         Arizona..............  Colorado.            
                                     Minnesota.............  Georgia...............                         Arkansas.............  Connecticut.         
                                     Nebraska..............  Hawaii................                         Kentucky.............  Delaware.            
                                     North Carolina........  Illinois..............                         Oklahoma.............  Idaho.               
                                                             Kansas................                         South Dakota.........  Maine.               
                                                             Louisiana.............                         Tennessee............  Maryland.            
                                                             Massachusetts.........                         U.S. Virgin Islands..  Mississippi.         
                                                             Missouri..............                                                Montana.             
                                                             New Jersey............                                                Nevada.              
                                                             Ohio..................                                                New Hampshire.       
                                                             Pennsylvania..........                                                New Mexico.          
                                                             Texas.................                                                New York.            
                                                                                                                                   North Dakota.        
                                                                                                                                   Oregon.              
                                                                                                                                   Puerto Rico.         
                                                                                                                                   Rhode Island.        
                                                                                                                                   South Carolina.      
                                                                                                                                   Utah.                
                                                                                                                                   Vermont.             
                                                                                                                                   Virginia.            
                                                                                                                                   Washington.          
                                                                                                                                   West Virginia.       
                                                                                                                                   Wyoming.             
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Stage V is the final stage in which a State is declared pseudorabies free.                                                                          

    Mr. Skeen. The pseudorabies program began in January 1989 and was 
expected to take 10 years to complete. Is this still an achievable 
goal?
    Response. APHIS expects to complete the pseudorabies eradication 
program by December 2000.
                             Noxious Weeds
    Mr. Skeen. After completing a Federal Weeds Policy in fiscal year 
1994, your agency decided to develop an APHIS Weed Implementation Plan. 
This plan was completed in March 1996. At the time of last year's 
hearing you stated that you did not have the authority to fully 
implement the plan. What is the status of its implementation? What 
authority do you need for its implementation?
    Response. Our proposed Consolidated Statutes still have not been 
enacted and, therefore, we still do not have authority to fully 
implement our plan.
    We need the authority to amend the Federal Noxious Weeds Act--FNWA. 
Webelieve that the FNWA does not provide sufficient flexibility to 
appropriately address noxious weed issues. It is too prescriptive in 
its requirements and its approach. It is also inconsistent with other 
plant quarantine laws. Specifically, we need the authority to regulate 
the interstate movement of listed weeds without having to establish a 
quarantine. This authority is necessary to thwart the movement of 
designated weeds. Also, we need emergency noxious weed listing 
authority, which would prevent the dissemination of foreign weeds by 
permitting a timely response when an infestation of a potentially 
harmful weed is first detected. We feel that the proposed Consolidated 
Statutes is a more effective approach to noxious weed problems than the 
existing FNWA. Our legislation would repeal the FNWA and replace it 
with a more flexible authority to regulate the movement of noxious 
weeds and cooperate with States and others to address noxious weed 
problems.
    Mr. Skeen. Provide the Committee with a description of the plan. 
When do you anticipate it will be operational?
    Response. The APHIS Weed Implementation Plan includes distinct new 
activities that will allow APHIS to explore innovative technologies in 
weed management. Specific activities in the plan include regulating 
weeds that threaten agricultural or other areas, regulating listed weed 
species, excluding designated weeds that are absent from or in limited 
distribution in the United States, and regulating the interstate 
movement of designated weeds for which no control program has been 
established. These new activities are designed to satisfy concerns that 
have been expressed by several APHIS customers, including several State 
Departments of Agriculture and the Office of Technology Assessment--
OTA. The plan outlines APHIS strategy for preventing the introduction 
and spread of non-indigenous weeds into and through interstate commerce 
of the United States. The Plan will become operational as soon as our 
proposed Consolidated Statutes is enacted and adequate funding is made 
available.
    Mr. Skeen. Did you discover any new noxious weed introductions in 
the U.S. last year?
    Response. Yes, we did. In the spring of 1996, we discovered Wetland 
Nightshade in 500 acres on five sites in several southwest Florida 
counties. This invasive plant from Central America threatens the 
Florida Everglades and other freshwater wetlands in south Florida. 
Currently, we are cooperating with the University of Florida, the 
Florida Department of Environmental Protection, and the South Florida 
Water Management District to conduct an eradication feasibility study 
of an infestation that occurs along the Peace River near Arcadia, 
Florida. In addition, we will be conducting a survey to determine the 
plant's total distribution in south Florida. If we deem eradication 
achievable, we may consider initiating a cooperative eradication 
project on this plant in south Florida in the spring of 1998.
                               Witchweed
    Mr. Skeen. Witchweed has been eradicated in all but two states, 
North and South Carolina. By the end of fiscal year 1996, you expected 
there to be less than 12,000 infested acres in both states. Where do we 
stand today and what are your projections for fiscal year 1997?
    Response. Currently, there are approximately 10,000 invested acres 
in both States. By the end of FY 1997, we expect that figure to be 
reduced to 8,000 acres.
    Mr. Skeen. Update the table that appears on page 55 of last year's 
hearing record, showing the total acres infested, the acres released 
per fiscal year and totals, and the cost of the program, to include 
fiscal year 1996 actuals and fiscal year 1997 estimates.
    [The information follows:]

                                        WITCHWEED PROGRAM STATUS AND COST                                       
----------------------------------------------------------------------------------------------------------------
                                                  Acres                                                         
                                                 released                  Cumulative                           
                                  Total acres      from      Total acres     acres                              
           Fiscal year            infested at   quarantine   in release    terminated   Total acres      Cost   
                                     end of     during the  category \2\      from     released \3\             
                                  fiscal year  fiscal year                  project                             
                                                   \1\                                                          
----------------------------------------------------------------------------------------------------------------
1993............................       38,000       10,000       196,000      191,600       387,600   $5,588,081
1994............................       28,000       12,000       216,020      193,000       409,020    4,086,032
1995............................       19,500        9,000       250,500      196,800       447,300    1,955,974
1996............................       13,334        7,665       175,000      251,721       426,721    1,701,175
1997 est........................        8,000        7,000       162,000      269,800       431,800    1,662,000
----------------------------------------------------------------------------------------------------------------
\1\ The figures shown in this column reflect the number of acres ``eradicated'' during a particular fiscal year.
  These acres will undergo 10 years of post-eradication surveys to verify eradication. Only after these 10 years
  will they be terminated from the project, assuming the surveys are negative.                                  
\2\ The acres in ``release Category'' will undergo 10 years of post-eradication surveys to verify eradication.  
  The figures in this column will not necessarily increase by the amount of acres released from quarantine in   
  the following fiscal year for two reasons. Some of the acres in the ``Release Category'' may become reinfested
  and others may be declared terminated.                                                                        
\3\ The term ``Total Acres Released'' represents the sum of the cumulative number of acres that have been       
  terminated from the project and the number of acres in ``released category'' at the end of the fiscal year.   

    Mr. Skeen. In fiscal year 1996, APHIS established a Weed Team to 
coordinate the agency's noxious weed program and develop a Weed 
Implementation Plan. Who serves on this Weed Team?
    Response. Our Weed Team is comprised of our Noxious Weeds 
Coordinator, a botanist, an expert on environmental assessments and 
pesticide registrations, an agreements specialist, the Director of our 
National Biological Control Institute, a port operations specialist, 
and a weed scientist.
    Mr. Skeen. In the budget justifications you state that several 
critical items in the plan related to emergency listing and regulation 
of interstate movement of Federal Noxious Weeds have not been 
implemented, pending passage ofthe proposed Consolidated Statutes or 
amendment or reinterpretation of the Federal Noxious Weed Act. Would 
you please elaborate on this statement in further detail for the 
Committee?
    Response. In our proposed Consolidated Statutes, we request 
emergency listing authority for noxious weeds. This authority would 
enable APHIS to prevent the dissemination of foreign weeds by 
permitting a timely response when an infestation of a potentially 
harmful weed is first detected. The current listing process mandated by 
the FNWA is long, cumbersome, and requires a public hearing. In 
addition, we are very limited in the emergency actions we can take if a 
new weed is introduced. Also in the Consolidated Statutes, we request 
authority to regulate the interstate movement of listed weeds for which 
no control or eradication program has been established, without having 
to establish a quarantine. This authority is necessary to effectively 
thwart the movement of designated weeds.
    Mr. Skeen. What other agencies are members of the USDA Weed 
Coordinating Committee and the Federal Interagency Committee for the 
Management of Noxious and Exotic Weeds?
    Response. Besides APHIS, the USDA Weed Coordinating Committee 
includes the ARS, the Cooperative State Research Extension and 
Education Service, the Natural Resources Conservation Service, the 
Economic Research Service, the Forest Service, and the Agricultural 
Marketing Service. The Federal Interagency Committee for the Management 
of Noxious and Exotic Weeds consists of the seven agencies that 
comprise the USDA Weed Coordinating Committee, along with 9 other 
agencies from four other cabinet Departments. These agencies are the 
Federal Highway Administration from the Department of Transportation; 
the Armed Forces Pest Management Board; the National Park Service, the 
Bureau of Land Management, the Fish and Wildlife Service, the Bureau of 
Reclamation, the Bureau of Indian Affairs, and the U.S. Geological 
Survey from the Department of the Interior; and an agency within the 
Department of Energy that is determined based on the particular issue 
in question.
                              Boll Weevil
    Mr. Skeen. The goal of the boll weevil program is to eradicate it 
from all cotton growing areas in the U.S. by the year 2003. Last year 
east Mississippi and the Lower Rio Grande Valley voted to discontinue 
the program. What impact is this having on the program?
    Response. This is having no immediate impact on the program other 
than an initial negative perception by growers that the program has 
failed. More recently, the eastern strip of Mississippi has voted to 
resume the program and that initial perception has been reversed. Even 
though the earlier situation is not crucial right now, it will become a 
problem in 4 to 6 years when Texas nears eradication, which is 
projected to occur in FY 2003. The problem would occur because of the 
possibility of eradicated areas becoming re-infested. We would 
certainly like the see that region re-join the program and we believe 
this is more likely to occur once the programs in Texas and northeast 
Mexico show some success.
    Mr. Skeen. Have all Mississippi growers passed a referendum to 
restart and expand the program. What is the status of this issue?
    Response. Zones 2, 3, and 4 have passed referenda to re-start the 
program and zone 1 (the western part of Mississippi) is currently 
voting. Results from this vote will be available by mid-April. Zones 3 
and 4 will begin in the summer of 1997, zone 2 in the fall of 1998, and 
zone 1 (pending passage of the referendum) would begin in the fall of 
1999.
    Mr. Skeen. What about the growers in the Lower Rio Grande Valley?
    Response. The growers may petition the Texas Agriculture 
Commissioner at any time for a new referendum. To this point, however, 
they have done nothing to indicate a desire to re-start the program.
    Mr. Skeen. Have any states recently passed an assessment referendum 
for the boll weevil program? Do you expect any states to pass referenda 
in fiscal year 1997?
    Response. Yes, they have. Since November 1996, zones 2, 3, 4 in 
Mississippi, southwest Tennessee, the Red River Valley in west 
Louisiana, southwest Arkansas, and the St. Lawrence area in west Texas 
have passed assessment referenda for the boll weevil program.
    Yes, we expect States to pass referenda in FY 1997. We expect zone 
1 in Mississippi and Mesilla Valley in south-central New Mexico to pass 
referenda in FY 1997. If these referenda pass, program activity in each 
area would likely begin in the fall of 1997 in New Mexico and in 1999 
in zone 1 of Mississippi.
    Mr. Skeen. Please update the table that appears on page 57 of last 
year's hearing record, showing boll weevil funding, to include fiscal 
year 1998.
    [The information follows:]

                                               BOLL WEEVIL FUNDING                                              
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal year--                    
                          Region                          ------------------------------------------------------
                                                              1994       1995       1996       1997       1998  
----------------------------------------------------------------------------------------------------------------
Central eradication and suppression......................       $984     $4,756     $4,920    $12,360     $4,133
Southeast eradication....................................     13,282     12,664     11,663      4,906      2,031
Southwest eradication....................................      1,117        583        463         55        284
                                                          ------------------------------------------------------
      Total..............................................     15,383     18,003     17,046     17,321      6,448
----------------------------------------------------------------------------------------------------------------
Note.--FY 1997 total includes $1.560 million in carryover funds. The FY 1998 total includes $72,000 in carryover
  funds.                                                                                                        

    Mr. Skeen. For the record, describe in detail the new boll weevil 
loan program.
    Response. The Farm Services Agency--FSA--loan program provides 
program managers with the capability to obtain relatively large sums on 
short notice to respond to significant weather changes. The cotton crop 
must be protected, and in some years this requires more resources than 
in others. Boll Weevil Eradication Foundations are non-profit 
organizations which have little, if any, of the collateral needed for 
commercial bank loans.
    These loans are intended to enable the Foundations to borrow funds 
for meeting increased cost-share requirements. Therefore, they will 
greatly enhance program expansion plans in Texas and the Mid-South. 
These loans will enable the Foundations, and as a result, the growers, 
to spread the relatively high initial cost of the program over several 
years, making their annual contribution or assessment more acceptable. 
FSA loans tend to stabilize on-going programs, which otherwise might 
experience occasional cashflow problems.
    Mr. Skeen. In 1996, Mexico proposed a pilot five year boll weevil 
eradication program in the northeastern Mexican state of Tamaulipas. 
What is the status of this program?
    Response. In the pilot program, the Mexican government, the state 
of Tamaulipas, and farmers share program costs. The Mexican government, 
through Sanidad Vegetal, provided 1 million pesos in 1996 to start the 
program. Initial program activities began in the summer of 1996 and 
involve cotton growing regions in the southern part of Tamaulipas. 
Activities involve the use of chemical attractants and trapping. 
Success in these initial locations will determine when and how the 
program will expand into adjacent cotton-growing areas in the State.
    APHIS believes certain technical and risk assessment issues still 
need to be resolved. The eradication plan relies heavily on biological 
control measures whose efficacy is not proven for eradication. Further, 
the area chosen for this pilot effort has plants besides cotton which 
could act as boll weevil hosts and, therefore, could pose a significant 
problem for a comprehensive eradication effort. Mexico and the United 
States will both benefit greatly from a boll weevil program that is 
based on sound science. We will continue to monitor control efforts in 
northern Mexico, and to work with Mexican Government officials and 
grower representatives.
                          Bovine Tuberculosis
    Mr. Skeen. The goal of the bovine tuberculosis program is to 
eradicate it from the U.S. by 1998. Is this date still the goal?
    Response. APHIS is currently re-evaluating the eradication date for 
the bovine tuberculosis program. While improvements were made in FY 
1996, it appears unlikely that the FY 1998 eradication date will be 
met. A new date has not yet been determined.
    Mr. Skeen. What is the status of the ELISA diagnostic test for 
Cervidae that was developed at Colorado State University?
    Response. The Enzyme Linked Immunosorbent Assay--ELISA--diagnositic 
test for Cervidae continues to be evaluated for use in Cervidae, 
Camelids, and Bovidae. Based on tests conducted by the Colorado State 
University, APHIS intends to use the ELISA diagnostic test as a 
supplementary testing tool for cattle, bison, and elk along with other 
conventional tuberculin tests. In addition, the ELISA may potentially 
serve as a primary test for camels, llamas and other animals for which 
no other tuberculin test exists. In FY 1997, APHIS is providing $50,000 
to Colorado State University to continue its validity study of the 
ELISA as a serological test and to determine its epidemiological 
usefulness in the National Bovine Tuberculosis Eradication program.
    Mr. Skeen. There have been some discussions about the problem of 
Mexican cattle being the single biggest traceback of tuberculosis 
outbreaks in this country. APHIS expected a final rule by the end of 
fiscal year 1996 pertaining to regionalization which establishes 
importation criteria for ruminants and swine based on the level of 
disease risk in specific geographical regions. The movement of Mexican 
cattle was to be addressed as part of this rule. What is the status of 
this issue?
    Response. In April 1996, APHIS published a proposed rule 
establishing new criteria for allowing or excluding importations of 
animals and animal products based on regionalization of animal diseases 
and scientific risk assessments. The movement of cattle was addressed 
generally as part of the regionalization framework. We are currently 
reviewing and responding to public comments received on this proposed 
rule. A final rule is expected to be issued by the end of calendar year 
1997.
    Mr. Skeen. Of the 136 tuberculosis tracebacks completed in fiscal 
year 1996, 84 percent were tracebacked to Mexico. What is being done 
about this obvious problems?
    Response. Overall, tuberculosis cases in Mexican cattle continue to 
diminish. The 136 tuberculosis cases detected in FY 1996 represent an 
80 percent decline from a high of 613 cases in FY 1992. This reduction 
is the result of the United States' ban on imported Holstein cattle and 
Mexico's implementation of their National bovine tuberculosis 
eradication program in June 1993. APHIS veterinarians work closely with 
Mexican animal health officials on training, evaluating Mexican States' 
programs and supporting surveillance programs. We expect this declining 
trend in tuberculosis Mexican cattle to continue helping us attain our 
goal of eradicating tuberculosis in the United States.
    Mr. Skeen. What is the status of the tuberculosis infected dairy 
herds in the El Paso Milkshed area?
    Response. There are currently 4 tuberculosis-infected dairy herds--
totaling 30,000 animals--in the El Paso milkshed area. These herds are 
still trying to test out of quarantine and it is unlikely that they 
will be declared free by FY 1998. Although no new target date has been 
set by APHIS, it is estimated that these herds will not be declared 
free until after the year 2000. Due to the large size of the herds, 
depopulation has not been an economically feasible option for either 
the herd owners or the Federal Government. A concerted effort between 
APHIS and the herd owners will be needed to eliminate tuberculosis from 
these herds without depopulation. This effort will require herd 
management changes to minimize intraherd spread, careful selection of 
replacement animals, and the use of old and new testing procedures to 
their maximum potential.
    Mr. Skeen. Describe how proposed regulations would decrease the 
risks associated with tuberculosis exposure from imported ruminants?
    Response. The proposed criteria for animal disease regionalization 
establish requirements for importing ruminants and swine, and products 
of ruminants and swine, from foreign ``regions'' based on scientific 
risk assessments. Tests and other risk mitigation factors would raise 
the health status of imported ruminants to a level that is equivalent 
to the United States' national herd.
    Mr. Skeen. How much did APHIS spend in fiscal year 1996 to support 
tuberculosis research initiatives at Colorado State University, Cornell 
University, and Texas A&M University?
    Response. In FY 1996, APHIS provided $50,000 to Colorado State 
University for tuberculosis research activities. No funding was 
provided to Cornell University or Texas A&M University.
                          ISAP Implementation
    Mr. Skeen. A contract to implement the integrated systems 
acquisition project, which is designed to replace the agency's computer 
system, was awarded to International Business Machines. The total 
contract amount is $250 million, but other USDA agencies can purchase 
up to 50 percent of this amount and other non-USDA agencies can 
purchase up to 20 percent of the total amount. Provide a detailed 
breakout of this contract including what agencies have used this 
contract, how much has been used and for what purpose, and what future 
plans are for the remainder of the $250 million.
    Response. The ISAP contract awarded to IBM is an Indefinite 
Delivery Indefinite Quantity requirements contract with a delegation of 
procurement authority up to $250 million. Actual APHIS expenditures 
will depend upon specific goods and services, but are likely to be 
substantially less than $250 million. Other USDA agencies can purchase 
above the $250 million delegation by up to 50 percent or $125 million, 
and other Departments can purchase above the delegation up to 20 
percent or $50 million.
    The following table shows the other agencies using the procurement 
authority provided in the ISAP contract:

               PROCUREMENT ACTIVITY BY OTHER USDA AGENCIES              
                         [Dollars in thousands]                         
------------------------------------------------------------------------
                                                         Fiscal year--  
             Agency                     Purpose      -------------------
                                                        1996      1997  
------------------------------------------------------------------------
Farm Service Agency/CCC.........  Local Area           $52,338    $1,941
                                   Networks; Wide                       
                                   Area Networks;                       
                                   Voicemail.                           
Office of Operations............  Analysis, design,         37  ........
                                   implementation of                    
                                   personnel                            
                                   tracking system.                     
Cooperative, State, Research      Processors,              111  ........
 Education, and Extension          memory, disk                         
 Service.                          drive, tape                          
                                   drives.                              
Forest Service..................  Hard disk, memory,         3  ........
                                   processor,                           
                                   monitor, fax                         
                                   modem, Ethernet                      
                                   adapter.                             
Natural Resources Conservation    On-net agency          2,017  ........
 Service.                          licenses,                            
                                   maintenance,                         
                                   netscape for Unix.                   
                                                     -------------------
      Total.....................  ..................    54,506     1,941
------------------------------------------------------------------------

    Mr. Skeen. Update the table that appears in page 63 of last year's 
hearing record showing a complete breakout of the appropriated funds 
for the information systems acquisition project to include fiscal year 
1996 actuals and fiscal year 1998 estimates.
    [The information follows:]

  INFORMATION SYSTEMS ACQUISITION PROJECT FUNDS--FISCAL YEAR 1992-1998  
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                                   Funds                
                 Fiscal year                   appropriated  Funds spent
------------------------------------------------------------------------
1992.........................................        $2,507       $1,078
1993.........................................         2,507        2,099
1994.........................................         3,500        2,829
1995.........................................         3,498          553
1996.........................................         4,055          825
1997 (estimated).............................         4,000       12,723
1998 (proposed)..............................         4,000        4,000
------------------------------------------------------------------------
Note.--The table reflects ISAP-specific appropriations and spending. We 
  anticipate spending $31.5 million Agencywide in FY 1998.              

    Mr. Skeen. In the budget justifications you state that the 
technology requirements of the ISAP contract were modified to integrate 
the current legacy environment. Would you please elaborate on this 
statement in further detail.
    Response. The solution offered originally on the contract required 
a total conversion from the existing legacy environment. The costs far 
exceeded likely available funding. Also, the Agency could not afford 
the technical isolation between the two environments within the program 
areas during the transition.
    The transition will have to be accomplished over a longer timeframe 
and require linkages to the legacy environment as the new platform is 
installed. The contract was modified to include personal computers with 
the capability to perform in both environments. Also a legacy operating 
system was added which requires less money and technical support to 
implement.
    These changes will allow the legacy environment to coexist and 
participate during the implementation. No significant disruption in 
service or work is anticipated using this new strategy.
    Mr. Skeen. The ISAP contract was awarded for $250 million. How much 
does APHIS actually plan to spend?
    Response. The reduced costs resulting from the changes outlined in 
the implementation should allow APHIS to implement, support and 
maintain the new environment for approximately $130 million which 
includes money appropriated for ISAP and other program activities over 
the life of the contract which is 10 years.
                   Agricultural Quarantine Inspection
    Mr. Skeen. Update the table that appears on page 64 of last year's 
hearing record showing the total number of staff years funded through 
the Agricultural Quarantine Inspection program, both the user fee 
program and the appropriated program, to include fiscal year 1996 
actuals and fiscal year 1997 estimates.
    [The information follows:]

------------------------------------------------------------------------
          Fiscal year           Appropriated    User fees       Total   
------------------------------------------------------------------------
1990..........................        $1,785        ( \1\)        $2,785
1991..........................           462        $1,338         1,800
1992..........................           502         1,474         1,976
1993..........................           546         1,529         2,075
1994..........................           598         1,604         2,202
1995..........................           613         1,872         2,485
1996..........................           613         1,970         2,583
1997..........................           625         2,140         2,765
------------------------------------------------------------------------
\1\ Collection of user fees started in FY 1991.                         

    Mr. Skeen. Also update the following table showing the amount of 
AQI fees collected, the amount spent, and the carryout levels.
    [The information follows:]

------------------------------------------------------------------------
          Fiscal year              Revenue     Obligations     Balance  
------------------------------------------------------------------------
1991..........................   $26,520,395    $4,991,139   $21,529,256
1992..........................   114,219,287    85,922,000    49,826,543
1993..........................   104,429,112    83,362,000    70,893,655
1994..........................    99,804,159    98,257,160    72,440,654
1995..........................   106,625,905   105,907,999    73,158,560
1996..........................   105,897,049   118,607,891    60,447,718
1997 \1\......................   113,079,566   134,108,000    39,419,284
------------------------------------------------------------------------
\1\ Estimate based on new fees implemented July 1, 1997 and the latest  
  current available data.                                               

    Mr. Skeen. Update the table that appears on pages 66 through 68 
showing, by airport, the resources for FTEs and funds used to reflect 
your fiscal year 1997 actuals and fiscal year 1998 budget proposal.
    [The information follows:]

                                       AQI RESOURCES AND FTE's BY AIRPORT                                       
                                             [Dollars in thousands]                                             
----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal year--                            
                                         -----------------------------------------------------------------------
                Location                        1995              1996              1997              1998      
                                         -----------------------------------------------------------------------
                                           Funding   FTEs    Funding   FTEs    Funding   FTEs    Funding   FTEs 
----------------------------------------------------------------------------------------------------------------
Airborne Park, OH.......................       $16     0.3       $12     0.5       $13     0.5       $13     0.5
Albuquerque, NM.........................        10     0.2         8     0.1         9     0.1        10     0.1
Anchorage, AK...........................       355     5.4       391     5.7       416     6.7       441     6.7
Andrew AFB, MD..........................       101     1.0       102     1.0       108     1.0       115     1.0
Atlanta, GA.............................     2,175    39.0     2,435    43.5     2,730    46.6     2,976    48.8
Austin, TX..............................         7     0.1         7     0.1        63     1.2        65     1.2
Bangor, ME..............................       197     3.4       229     3.4       243     3.4       257     3.4
Baton Rouge, LA.........................        18     0.4        18     0.4        17     0.2        18     0.2
Billings, MT............................         1     0.1  ........  ......         1  ......         1  ......
Bismarck, ND............................        11     0.2         4     0.1         4     0.1         4     0.1
Bradley, IA.............................        63     1.1        80     1.0        85     1.0        90     1.0
Brownsville, TX.........................        80     1.8        81     1.8        99     1.9       115     2.4
Burlington, VT..........................        30     0.6        33     0.3        35     0.3        37     0.3
B.W.I., MD..............................       204     2.0       307     3.0       325     3.0       345     3.0
Calexico, CA............................         3     0.1         2  ......         2  ......         2  ......
Charlotte, NC...........................       396     7.6       390     7.7       415     8.0       425     8.0
Cheyenne, WY............................  ........  ......  ........  ......         4     0.1         4     0.1
Cleveland, OH...........................        40     0.8       120     2.0       127     2.0       135     2.0
Corpus Christi, TX......................        13     0.4        13     0.4  ........  ......  ........  ......
Dallas, TX..............................     1,171    27.8     1,354    31.8     1,640    32.8     1,728    32.8
Dayton, OH..............................        22     0.4        40     0.7        42     0.7        45     0.7
Des Moines, IA..........................         6     0.1         6     0.1         7     0.2         7     0.2
Detroit, MI.............................     1.026    12.7     1,171    16.0     1,301    17.0     1,439    18.0
Dover AFB, DE...........................       172     3.5       180     3.3       191     3.3       202     3.3
Dulles IA, VA...........................       780    14.0     1,217    18.0     1,353    19.0     1,435    19.0
Eagle Pass, TX..........................  ........  ......  ........  ......        12     0.3        13     0.3
El Paso, TX.............................       118     2.7       120     2.7       167     3.4       183     3.8
Ft. Lauderdale, FL......................       247     4.1       258     4.3       288     4.8       305     4.8
Galveston, TX...........................         5     0.1         5     0.1         2  ......         2  ......
Gen. Mitchell Fld, WI...................       101     2.0       110     2.0       117     2.0       124     2.0
Harlingen, TX...........................        26     0.6        26     0.6        43     0.4        44     0.4
Hidalgo, TX.............................         7     0.2         7     0.2       106     1.7       147     1.9
Halo, HI................................       328     7.7       381     9.3       398     8.8       422     8.8
Honolulu, HI............................     6,543   136.7     6,774   132.0     7,923   145.9     8,998   160.9
Houston, TX.............................     1,469    34.0     1,621    37.1     1,792    40.1     1,954    40.1
Indianapolis, IN........................        39     0.5       205     3.0       217     3.0       230     3.0
Inglewood, CA...........................     6,468   128.0     7,142   133.0     8.056   141.0     9,339   161.0
JFK, NY.................................     8,556   132.0     9,181   141.0     9,861   150.0    10,778   171.0
Cahill, HI..............................     1,130    34.7     1,080    33.7     1,127    34.7     1,314    37.7
Hailua-Kona, HI.........................       582    14.8       530    14.7       745    16.8       745    16.6
Lakewood, CO............................       185     1.8       132     1.8       161     2.6       171     2.6
Laredo, TX..............................       110     2.6       113     2.6        84     1.6        87     1.6
Las Vegas, NV...........................        72  ......        50  ......        93     0.5        99     0.5
Lanai, HI...............................  ........  ......  ........  ......       162     2.6       172     2.6
Lihue, HI...............................       569    13.5       561    12.7       439    11.9       465    11.9
Lincoln, NE.............................         4     0.1         4     0.1         6     0.1         6     0.1
Little Rock, AR.........................        23     0.4        23     0.4        17     0.3        18     0.3
Logan IA, MA............................       767    12.0       927    15.0       983    15.0     1,042    15.0
Louisville, KY..........................       377     6.0       316     6.0       418     6.7       445     7.0
Martinsburg, WV.........................         6     0.1         8     0.1         8     0.1         8     0.1
Mayaguez, PR............................       357    10.0       498    12.8       478    12.2       507    12.2
Miami, FL...............................     6,775   126.4     9,475   184.5    10,373   199.0    10,995   199.0
Nashville, TN...........................       374     6.0       529     9.3       540     9.3       553     9.3
New Orleans, LA.........................       347     7.6       354     7.6       333     5.5       343     5.5
Newark, NJ..............................     1,744    19.3     2,224    22.0     2,674    30.0     2,780    30.0
Newburgh, NY............................        97     2.0       134     2.0       142     2.0       151     2.0
Nogales, AZ.............................         1  ......         1  ......        17     0.4        17     0.4
Norfolk, VA.............................        62     1.0        64     1.0        68     1.0        72     1.0
Oakland, CA.............................  ........  ......       172     0.6       374     4.2       396     4.2
O'Hare, IL..............................     2,275    33.0     2,411    33.0     2,623    34.0     2,984    37.0
Oklahoma City, OK.......................         5     0.2         8     0.2        16     0.4        19     0.4
Ontario, CA.............................        65     1.0        58     1.3        77     1.8        82     1.8
Orlando, FL.............................     1,795    25.8     1,816    26.1     1,822    26.3     1,977    28.3
Philadelphia IA, PA.....................       479     7.0       634     8.0       672     8.0       740     9.0
Phoenix, AZ.............................       200     1.9       178     2.5       267     4.0       283     4.0
Pierre, SD..............................         8     0.1         8     0.1         9     0.2         9     0.2
Pittsburgh, PA..........................       189     3.0       200     3.0       212     3.0       225     3.0
Port Arthur, TX.........................         7     0.2         7     0.2  ........  ......  ........  ......
Port Columbus, OH.......................        17     0.3        20     0.5        21     0.5        22     0.5
Portland, OR............................       169     3.6       264     5.6       269     4.7       285     0.5
Raleigh, NC.............................       364     6.1       382     6.1       251     4.0       266     4.0
Rickenbacker, OH........................         6     0.1         6     0.1         6     0.1         6     0.1
Sacramento, CA..........................         4     0.1         4     0.1         4     0.1         4     0.1
Salt Lake City, UT......................        36     0.2        53     0.6        58     0.8        61     0.8
San Antonio, TX.........................       148     3.5       191     4.5       319     4.9       378     5.9
San Diego, CA...........................       108     0.3       173     2.3       211     3.0       224     3.0
San Francisco, CA.......................     2,268    55.4     2,423    44.2     2,998    56.2     3,177    56.2
San Jose, CA............................       133     2.3       118     3.0       139     3.4       147     3.4
San Juan, PR............................     4,428    93.0     4,533    95.0     4,604    95.5     4,880    95.5
San Luis, AZ............................        13     0.3        14     0.3        15     0.3        16     0.3
Seattle, WA.............................       826    13.2       875    12.9     1,119    15.7     1,412    21.7
Spokane, WA.............................         5     0.1        12     0.1         9  ......         9  ......
St. Peters, MO..........................       194     4.4       197     4.4       327     5.8       337     5.8
Tampa, FL...............................       215     3.7       228     4.0       266     4.2       335     5.2
Toledo, OH..............................         8     0.1        10     0.8        10     0.8        11     0.8
Twin Cities, MN.........................       187     3.0       485     7.0       514     7.0       545     7.0
U.S. Virgin Islands.....................       447     9.0       575    11.5       589    11.5       604    11.5
Witchita, KS............................         2  ......         2  ......        10     0.2        11     0.2
Wright-Patterson, OH....................         5     0.1         6     0.1         6     0.1         7     0.1
      Total.............................   $58,991   1,101   $67,116   1,211   $74,897   1,304   $81,890   1,377
----------------------------------------------------------------------------------------------------------------

    Mr Skeen. Update the table that appears on page 69 of last year's 
hearing record showing the fee schedule for each activity and changes 
that have occurred since instituting the user fee.
    [The information follows:]

------------------------------------------------------------------------
                                                Revised fee eff. January
               Category                  Fee             1, 1993        
------------------------------------------------------------------------
Airport operations:                                                     
    International passengers \1\.....    $2.00  $1.45.                  
    Commercial Aircraft..............    76.75  61.00 through February  
                                                 29, 1996.              
    Commercial aircraft \2\..........  .......  53.00 effective March 1,
                                                 1996.                  
Maritime operations:                                                    
    Commercial vessel \1\............   544.00  369.50.                 
Land border operations:                                                 
    Commercial truck \1\.............     2.00  No change.              
    Loaded railroad cars \1\.........     7.00  No change.              
Phytosanitary certificates:                                             
    Commercial \2\...................    30.00  50.00 effective March 1,
                                                 1996.                  
    Noncommercial/low value \2\......    19.00  23.00 effective March 1,
                                                 1996.                  
    Reissued \2\.....................     5.00  7.00 effective March 1, 
                                                 1996.                  
------------------------------------------------------------------------
\1\ Fees effective May 13, 1996.                                        
\2\ Fees revised March 1, 1996.                                         

    Mr. Skeen. Do you anticipate any changes in the charges during 
fiscal year 1997?
    Response. A proposed rule has been published to revise the AQI user 
fees for FY's 1997 to 2002. The comment period closes on March 28, 
1997.
    Mr. Skeen. As part of your efforts to comply with the Government 
Performance and Results Act your agency expanded data collection at the 
ports to measure the frequency of quarantine material entering the port 
and the pest risk of these products. What did you find as a result of 
this effort?
    Response. So far we have began to establish evaluative benchmarks 
for future comparisons. Additional data will be collected for pathway 
analysis and pest identification purposes. Once we called this data we 
will have a better idea of program effectiveness.
    Mr. Skeen. APHIS and the U.S. Army have entered into an MOU to 
develop an automated baggage inspection system, X-Ray, which should be 
on-line in April 1998. What is the status of this initiative?
    Response. The fully functional prototype will be ready in early 
1998. We will test it at the port of San Juan, Puerto Rico.
    Mr. Skeen. What impact has the Automated Cargo System had on the 
program?
    Response. We are installing major equipment and training inspectors 
at the ports of Los Angeles, Houston, Miami, and JFK. Installation has 
been completed at JFK, and we are attempting to utilize the Automated 
Cargo System--ACS--technology to speed cargo clearance. We plan to 
expand these efforts as quickly as possible within available resources, 
and as we are able to provide the necessary training in the use of the 
new system. It is too soon to evaluate the program impact, but we hope 
that it will lead to quicker cargo clearance. This wide area network 
system would replace the existing Harris equipment interface with 
Customs at 33 maritime locations and 26 airports.
    Mr. Skeen. Give the Committee an update of how the new Automated 
Targeting System for electronic transmission of cargo data and entry 
documents is working.
    Response. The Automated Targeting System is part of a Customs 
Service system which uses artificial intelligence techniques to rank 
shipments for inspection. Currently being piloted by Customs at 
selected ports, the system merges carrier manifest and broker entry 
information, filters this information through a set of established 
criteria, and prioritizes the shipments for inspection based on system 
findings. We are currently working with Customs and the contractor to 
develop the technical and operational specifications necessary to adapt 
the data entry and manifest data to meet our needs. We are also 
purchasing computer hardware and related electronic equipment to 
establish a nationwide network upon which this and other systems will 
run. This project will take 5 years to become fully operational.
    Mr. Skeen. You are proposing an increase of $2.0 million in the 
agricultural quarantine inspection user fees account while at the same 
time decreasing staff years by 42 in fiscal year 1998. Please explain 
the imbalance of this proposal in further detail.
    Response. The staff-year figures given in the Explanatory Notes 
reflect both those personnel involved in the direct delivery of APHIS' 
program services at ports-of-entry, and the line item's proportionate 
share of program direction and support, both at headquarters and in the 
field. APHIS is in the midst of a streamlining initiative which began 
in 1993 and by 1999 will eliminate approximately 450 administrative 
positions in the field and at headquarters. These reductions will show 
up in the staff years attributed to the various line items because the 
resources for support functions happen to be included there. Given that 
the AQI-user fees line item is by far our largest, reductions in 
support functions due to streamlining and reinvention may give the 
impression that direct program delivery is being reduced, when in fact 
the opposite is true. We have no plans to reduce the staff levels at 
the ports-of-entry in FY 1998, and in fact have budgeted for the 
possibility of increased hiring at a few critical locations as 
circumstances dictate. The number of staff years by airport actually 
increases from 1,304 in FY 1997 to 1,377 in FY 1998. Also the FAIR Act 
of 1996 exempted AQI from staff year restrictions. This would allow us 
to add inspectors when demand and resources so dictate.
    Mr. Skeen. Provide a detailed breakout of how you propose to spend 
$1,160,000 increase in the AQI program.
    [The information follows:]

------------------------------------------------------------------------
                                         Staff   Salary and             
               Location                  years    benefits   Other costs
------------------------------------------------------------------------
Hawaii................................       8     $352,000       $5,000
Blaine, Washington....................       1       44,000        2,000
Tecate, California....................       2       88,000       48,000
Andrade, California...................       1       44,000       53,000
Lukeville, Arizona....................       1       44,000       53,000
Brownsville, Texas (Los Tomates)......       4      120,000       95,000
Eagle Pass, Texas (Eagle Pass 2)......       3       84,000       34,000
Canadian border initiatives involving                                   
 smuggling of prohibited Oriental                                       
 fruit and commodities................       2       88,000        6,000
                                       ---------------------------------
      Total...........................      22      864,000      296,000
------------------------------------------------------------------------

    Mr. Skeen. What is the reason for the increase in traffic of 
untreated Asian and European agricultural products into the U.S. from 
Canada?
    Response. The primary reason is an increase in the ethnic 
populations in California and New York, which is accompanied by greater 
demand for food from foreign countries, most of which are prohibited. 
Similar products produced in the United States are usually 4 to 10 
times as expensive as similar foreign fruits being smuggled, which are 
untreated.
    In addition, enforcement is very difficult. Smuggling is a crime 
under the U.S. Codes, but there are no administrative sanctions under 
the Code of Federal Regulations. The Customs Service has jurisdiction 
over these violations, but they usually do not place emphasis on low 
valued agricultural commodities. Responsibility for prosecuting 
smuggling cases rests with the U.S. Attorneys, whose main focus is on 
the largest violations, usually involving drugs and/or illegal weapons.
    Smuggling of prohibited agricultural products from Canada has not 
proven to be a difficult pathway. We are finding that many smuggled 
agricultural commodities are brought in through Indian reservations 
along the U.S.-Canadian border. This has proven difficult to control 
because the Indian reservations are not under the jurisdiction of 
either the Canadian or the U.S. Government.
    Mr. Skeen. You state that new border stations will be opened and 
staffed; two on the Mexican border and one on the Canadian border. 
Where will they be located?
    Reponse. Since publication of the Explanatory Notes, we have 
modified our schedule slightly. We still plan to open three new border 
stations in FY 1998, but all will be along the Mexican border. The 
locations are: Andrade, California; Los Tomates, Texas; and Eagle Pass, 
Texas (Eagle Pass 2 Bridge). The proposed new Canadian border station 
at Pembina, North Dakota, has been postponed until FY 1999 based on the 
General Services Administration time line for additional space for 
expansion.
    Mr. Skeen. Provide a list of the recommendations of the Border 
Passenger Re-engineering Initiative Team on ways to expedite passenger 
processing while maintaining or increasing compliance with current U.S. 
laws and regulations.
    Response. A list of the recommendations contained in a report to 
the National Performance Review entitled Reengineering United States 
Primary Passenger Processing follows:
Training
    Teach all inspectional personnel each of the Federal Inspection 
Services--FIS--missions to further the goal of working together more 
efficiently.
    Expand FIS officers' foreign language capabilities in order to 
better communicate with the traveling public.
    Use alternate training formats in order to reduce the time 
inspectors are removed from their work sites, such as computer-based, 
video and teleconferencing, and train-the-trainer.
Risk assessment
    Develop national and local passenger analysis units.
    Develop joint inspectional roving teams at airports.
    Develop pre-primary, joint roving teams on the southern U.S. 
border.
Performance measurement
    Develop performance measurements for processing times, efficiency, 
and courtesy in dealing with the public as well as customer 
satisfaction.
    Analyze these measurements regularly, in order to set improvement 
targets and to respond to any performance gaps.
Technology improvements
    Establish electronic bulletin boards accessible by all FIS at their 
local work sites.
    Install license plate readers at all land border crossing.
    Install video cameras to assist in land border inspections at 
remote ports-of-entry.
    Further the use of machine readable documents in order to improve 
effectiveness and efficiency.
    Employ biometric technology to accomplish our goals of improving 
efficiency and effectiveness.
    Complete development and begin installation of tomographic X-rays.
    Install an automated call distribution system on the northern 
border.
    Install X-rays at all high volume border ports.
    Establish a radio frequency common to all FIS for use by inspection 
personnel.
Passenger segmentation
    Maximize the many ways passengers may be segregated at both the air 
and land borders to facilitate entry while at the same time increasing 
enforcement.
Public relations
    Improve our customer' knowledge of FIS requirements through various 
means; e.g., video presentations to departing passengers as well as 
inbound passengers;informational kiosks in departure lounges; 
electronic bulletin boards at land borders; and providing information 
in foreign airports and in meetings with stakeholders and customers.
Access to information
    Improve the access to Interagency Border Inspection System--IBIS--
databases for all inspectional personnel by obtaining security 
clearances for APHIS personnel, providing computer equipment where 
needed.
    Increase the participation by airlines in the Advance Passenger 
Information System and improve the quality of data in the system.
Elimination of paperwork
    Examine the paperwork generated in the entry process, and 
streamline or eliminate where possible in order to increase efficiency.
    Mr. Skeen. When do you anticipate the results of the baseline data 
collection to measure the effects of this new initiative to be 
complete?
    Response. The results of this initiative are expected after one 
full year with all AQI ports using the system. AQI monitoring began in 
most ports by October 1996, therefore we anticipate that a full year's 
data should be ready for analysis and review by the beginning of fiscal 
year 1998.
    Mr. Skeen. How long does it take to train a dog for the beagle 
patrol job?
    Response. Beagle dogs undergo a 12-week training course with their 
proposed handlers.
    Mr. Skeen. Within AQI, APHIS maintains an ongoing preclearance 
program in Cuba. What is this preclearance program used for?
    Response. If fiscal year 1996, APHIS personnel were detailed to 
Cuba to train military personnel on how to conduct inspections. This 
training program was funded by the military.
                                Scrapie
    Mr. Skeen. Please update the table that appears on page 73 of last 
year's hearing record showing scrapie program spending to include 
fiscal year 1996 actuals and fiscal year 1997 estimates.
    [The information follows:]

                                            SCRAPIE PROGRAM SPENDING                                            
----------------------------------------------------------------------------------------------------------------
                                                                             Fiscal year--                      
                                                                 ------------------------------------           
                            Activity                                                         1997        Total  
                                                                     1995        1996       (est.)              
----------------------------------------------------------------------------------------------------------------
Research........................................................    $214,000    $194,000    $194,000    $602,000
Other...........................................................   2,133,000   2,190,348   2,773,000   7,096,348
                                                                 -----------------------------------------------
      Total.....................................................   2,347,000   2,384,348   2,967,000   7,698,348
----------------------------------------------------------------------------------------------------------------

    Mr. Skeen. I read in the budget justifications where the occurrence 
of scrapie prompted Brazil to ban all importations of sheep and bovine 
embryos from the U.S. in fiscal year 1996. Why is this the case since 
the presence of scrapie existed in the U.S. prior to fiscal year 1996?
    Response. The Brazilian ban on U.S. sheep and bovine embryos was 
precautionary measure in response to the United Kingdom's--UK--Bovine 
Spongiform Encephalopathy--BSE--outbreak and media interest in the 
theory that a link exists between scrapie in sheep and BSE in cattle. 
This theory is still unproven.
                              Cattle Tick
    Mr. Skeen. Reinfestation of cattle tick in the U.S. is likely a 
result of the movement of wildlife, especially exotic game and white-
tailed deer. A new technology involving a systemic pesticide provided 
through pesticide-medicated baits was being tested to solve this 
problem. At this time last year, your agency was preparing the 
documentation needed to get FDA approval for use of this technology. 
What is the status of this new issue?
    Response. Within the last year, APHIS has had discussions with the 
pharmaceutical company that holds the patent on the pesticide and with 
FDA concerning field us of this technology. Because the liability and 
lack of market issues, progress in the discussions with the company and 
FDA has been limited. Although the technology showed promise in earlier 
small-scale field trials, further research is needed before the 
technology can be considered for program use.
                         Animal Damage Control
    Mr. Skeen. Your agency has cooperative agreements with all states 
relatedto animal damage control work. Provide a list of the amounts of 
cost-share provide by each state and the federal share spent for fiscal 
year 1996.
    Response. The following table contains the amount of Federal 
appropriated funds and cooperator contributed funds allocated by State 
for FY 1996. These funds are used for efforts such as resolution of 
wildlife conflicts at airports, the rabies control project in Texas and 
other human health and safety issues, as well as for the protection of 
endangered species and public and private property.

------------------------------------------------------------------------
                                                   Fiscal year--        
                                         -------------------------------
                  State                        1996            1996     
                                           appropriated     cooperative 
------------------------------------------------------------------------
Alabama.................................        $159,000         $31,963
Alaska..................................          45,000         680,459
Arizona.................................         448,799         265,791
Arkansas................................         258,890  ..............
California..............................       1,414,915       2,264,991
Colorado................................         790,480         240,854
Connecticut.............................           9,370  ..............
Delaware................................          10,580  ..............
District of Columbia....................           4,761  ..............
Florida.................................         151,950          78,743
Georgia.................................         103,800         109,477
Hawaii..................................          100,00         670,262
Idaho...................................         963,144         411,400
Illionia................................         117,050         326,137
Indiana.................................          96,700          21,513
Iowa....................................          68,960           4,361
Kansas..................................          75,000          33,804
Kentucky................................          81,600         126,212
Louisiana...............................         361,600         221,520
Maine...................................         135,700          45,320
Maryland................................          90,459          71,885
Massachusetts...........................          75,897          36,450
Michigan................................          97,800          28,855
Minnesota...............................         242,500              96
Mississippi.............................         567,700         849,499
Missouri................................         103,440          54,063
Montana.................................         973,500         547,194
Nebraska................................         393,874         332,556
Nevada..................................         814,872         619,854
New Hampshire...........................         175,306          68,549
New Jersey..............................         109,340         208,182
New Mexico..............................       1,242,585       1,098,776
New York................................         119,634         115,898
North Carolina..........................         185,850         575,420
North Dakota............................         772,052         331,948
Ohio....................................         148,900          70,000
Oklahoma................................         789,852         927,322
Oregon..................................         975,400         724,621
Pennsylvania............................          79,187  ..............
Rhode Island............................           8,433  ..............
South Carolina..........................          163,61         269,778
South Dakota............................         300,000         786,136
Tennessee...............................         244,800         280,701
Texas...................................       2,290,752       5,564,171
Utah....................................         996,992         840,175
Vermont.................................          61,594          39,710
Virginia................................         168,400         179,034
Washington/Guam.........................         588,637       2,230,392
West Virginia...........................          89,700         120,582
Wisconsin...............................         525,500         951,596
Wyoming.................................       1,006,781         471,136
                                         -------------------------------
      Total.............................      19,773,578      23,927,384
------------------------------------------------------------------------

    Mr. Skeen. Update the table that appears on page 71 of last year's 
hearing record showing the amount spent on animal damage control 
research, including the amount allocated to non-lethal methods 
development, to include fiscal year 1997.
    [The information follows:]

------------------------------------------------------------------------
                                        Total         Total             
            Fiscal year                funding      nonlethal    Percent
------------------------------------------------------------------------
1995..............................    $9,671,892    $7,253,919      75  
1996..............................     9,716,328     7,287,246      75  
1997 (est.).......................    10,591,000     7,248,750  \1\ 68.4
------------------------------------------------------------------------
\1\ The FY 1997 appropriation for ADC Methods Development includes a one-
  time increase of $926,000 to cover relocations costs of employees     
  moving to the new Wildlife Research Center is Fort Collins, Colorado. 
  An anticipated minimum of 75 percent of funding, excluding the one-   
  time increase, will be devoted to nonlethal methods development.      

                          Methods Development
    Mr. Skeen. Provide specific examples of what research was done in 
methods development in fiscal year 1996.
    Response. National Wildlife Research Center--NWRC--researchers have 
made significant progress towards developing immunocontraceptive 
vaccines for non-lethal wildlife damage management. An Investigational 
New Animal Drug application was submitted to FDA and has been approved 
to permit field testing of zona pellucida vaccine for the control of 
deer and other damage causing wildlife. NWRC has continued evaluating 
numerous non-lethal chemical products to repel blackbirds and other 
bird species to reduce consumption of rice and other agricultural 
commodities. NWRC is also assisting with the re-registration of 
methiocarb, a proven bird repellent.
    NWRC continued multi-year research projects at O'Hare International 
Airport and Elmendorf Air Force Base to reduce wildlife strike hazards. 
Turf vegetation management and non-lethal repellent were investigated 
to minimize the numbers of gulls, waterfowl and hawks that are a threat 
to aviation safety. Methods to exclude deer from airports using 
repellents and physical barriers were also investigated.
    Non-lethal methods have been developed for controlling blackbird 
damage to sunflowers by reducing blackbird roosting habitat in cattail 
wetlands through the aerial application of an aquatic herbicide. 
Similarly, methods were developed for reducing cormorant depredation of 
catfish by dispersing cormorants away from winter roosting sites. These 
methods are now in use by the animal damage control operations program 
and by producers. Success of these control methods will be monitored 
through radio-telemetry and Geographic Information Systems 
applications.
    During FY 1996, interdisciplinary research efforts continued to 
identify materials and develop methods for non-lethal control in 
Integrated Pest Management programs. Promising materials include 
predator urines, essential plant oils, volatile sulfur containing 
compounds and various types of plants and physical barriers which may 
repel herbivorous rodents as well as deer.
    NWRC progressed during FY 1996 in the development of selective, 
effective humane traps and snares to increase efficiency and reduce 
animal injuries associated with capture and restraint of coyotes. 
Cooperative funding allowed for the initiation of work on contraceptive 
methods to reduce coyote predation on lambs associated with 
provisioning pups at dens. Experiments with tastes, odor, and visual 
cues have been initiated to improve coyote attraction to baits and 
delivery devices for chemical agents, and to identify potential 
chemical repellents.
    During FY 1996, NWRC developed and validated analytical chemistry 
methodology, conducted field studies, and supervised contract studies, 
to provide 21 data submissions for the registration and re-registration 
of chemicals, including Compound 1080 for use in livestock protection 
collars to mitigate livestock predation; strychnine, zinc phosphide, 
and carbon and sodium nitrate gas cartridges to reduce agricultural 
damage caused by numerous small mammals; and alpha chloralose and 
methyl anthranilate to reduce bird related agricultural losses and 
public health and aviation hazards.
    Also during FY 1996, rotenone, pyrethrins, and propoxur were 
evaluated by interdisciplinary research teams for use as oral and 
dermal toxicants, as part of continuing efforts to develop methods to 
control brown tree snake--BTS--populations on Guam. Preliminary results 
indicate that propoxur and pyrethrin are effective oral toxicants and 
rotenone is an effective dermal toxicant. Methods to quantify the 
residues of these toxicants in BTS are being developed and will be used 
to assess the environmental safety associated with the use of these 
chemicals to control BTS populations.
    In Hawaii, improved methods for using rodenticide baits were 
developed for controlling damage in macadamia nut orchards caused by 
introduced rats that have maintained high populations in orchards and a 
variety of other habitats. Studies of rat movements using radio-
telemetry and fluorescent dyes established that placement of bait in 
trees resulted in increased bait acceptance and specifically targeted 
the animals feeding on the growing macadamia nuts.
    Mr. Skeen. Provide a table that shows the amount of funding that is 
provided to the Jack Berryman Institute for Wildlife Damage Management 
for fiscal years 1993 through 1997.
    Response. Since its inception in FY 1993, APHIS has provided by 
$35,000 per year for the Jack Berryman Institute. In addition, APHIS 
provides funds for an academic development program at Utah State 
University. The following table contains information on both the Jack 
Berryman Institute and the development program at Utah State 
University:

------------------------------------------------------------------------
                                       Jack                             
           Fiscal year               Berryman    Utah State     Total   
                                    Institute    University             
------------------------------------------------------------------------
1993.............................      $35,000     $229,000     $264,000
1994.............................       35,000      229,000      264,000
1995.............................       35,000      229,000      264,000
1996.............................       35,000      212,000      247,000
1997.............................       35,000      212,000      247,000
------------------------------------------------------------------------

    Mr. Skeen. The project to reintroduce the wolf into Yellowstone 
Park is now in its third year of operation. Given us a status report on 
the project. What have you learned? What has been the impact on your 
operations and budget?
    Response. Gray wolves began naturally moving back into northwestern 
Montana from Canada in the mid-1980's. This naturally occurring 
population of wolves is increasing and now occupies northern Idaho as 
well as northwestern Montana, and consists of about 70 adults and 
yearlings and possibly 30 pups. To speed wolf recovery in the region, 
the FWS captured 29 wolves in Canada in 1995 and 37 wolves in 1996. 
They released them into YNP and central Idaho. This group of wolves is 
considered a nonessential experimental population and it is increasing 
as well. Introduced wolves have successfully bred and have raised pups. 
More pups will be produced this spring.
    As evidenced by the increase in their numbers, both naturally 
occurring and reintroduced gray wolves can thrive in many areas of 
Idaho, Montana, and Wyoming. They sometimes frequent areas of human 
activity and some seem to select the same type of habitat that some 
people prefer, such as areas of interspersed forest and open areas 
typical of ranching communities in western Montana. Most of the wolves 
have not come into direct conflict with people, but some have killed 
livestock. An increase in these conflicts is expected as the wolf 
population increases.
    Mr. Skeen. How much funding do you receive from the Fish and 
Wildlife Service for monitor and control work? Does this amount cover 
the full cost of your work? If not, what is the shortfall?
    Response. The April 1991 agreement provided approximately $60,000 
per year of FWS funds to support a wolf management specialist in 
Montana. This funding provided to be insufficient in FY 1996. In FY 
1997, FWS and APHIS each agreed to contribute $100,000 to efforts in 
dealing with wolf predation on livestock.
    The new interagency agreement between FWS and APHIS commits a total 
of $200,000 per year toward efforts in dealing with wolf predation on 
livestock. APHIS currently estimates these efforts to cost 
approximately $215,000 in FY 1997.
    In addition to a projected shortfall of approximately $15,000 in FY 
1997 for wolf management efforts, APHIS is projecting average 
shortfalls of approximately $58,000 per year for each of the next 2 
years, beyond the $200,000 per year currently committed in the APHIS/
FWS interagency agreement for work in Idaho, Montana, and Wyoming. With 
expected reintroductions of the Mexican wolf in the near future, APHIS 
will also need to expand efforts to include the States of Arizona and 
New Mexico by FY 1999.
    Mr. Skeen. As a result of your research, the FDA has authorized 
investigations of the tranquilizer propiopromazine in tab form which 
can be attached to traps and foot snares. What is the status of this 
investigation?
    Response. The Food and Drug Administration granted an 
Investigational New Animal drug permit to APHIS in June 1995, to use 
propiopromazine hydrochloride in Tranquilizer Trap Devices--TTD--
attached to traps and snares set to capture coyotes and wolves. The 
tranquilizer will immobilize the captured animals for up to 24 hours, 
thereby helping reduce stress and trap-related injuries. APHIS is 
developing use guidelines and training manuals for the TTD. As soon as 
these are in place, the agency will train and certify individuals for 
their use.
                         animal damage control
    Mr. Skeen. Describe in further detail your ongoing Living with 
Wildlife campaign.
    Response. In 1993, APHIS launched a National ``Living With 
Wildlife'' campaign. APHIS began this outreach program to better inform 
the general public and future generations about wildlife, wildlife 
damage, and the goals, mission, and objectives of the animal damage 
control program. The primary message is that wildlife is a national 
treasure to cherish and preserve and, like our other resources, 
wildlife must often be managed to ensure abundance, conservation, and 
diversity. Wildlife, however, can sometimes cause a great deal of 
damage in rural and urban settings.
    Over the past 4 years we distributed more than 50,000 Living With 
Wildlife public affairs products throughout the country. From October 
1, 1995 to September 3, 1996, more than 100 positive news items were 
reported in national and regional publications, including Newsweek and 
USA Today. These articles included information about backyard wildlife 
problems, the Texas and New England rabies programs, the BTS on Guam, 
guarding dogs, aquaculture, urban wildlife problems, and new research 
techniques. In addition, several cable access channels continue to 
broadcast the Living-With-Wildlife video and it is regularly presented 
to civic organizations and schools. APHIS also provides the video to 
cooperative extension wildlife biologists and State wildlife agencies 
throughout the country. Upcoming efforts will focus on research 
activities, bear relocation, protection of endangered species, and the 
protection of human health and safety.
    APHIS also provides specific information regarding ADC's ``Living 
With Wildlife'' campaign through the Internet. During 1996, ADC 
received between 25 to 30 requests per week through the Internet for 
further information.
    Mr. Skeen. What were the results of a NASS survey to determine the 
range and extent of wildlife damage to agricultural resources in the 
U.S.?
    Response. NASS surveyed 16,000 agricultural producers in January 
1995. Of approximately 11,000 respondents nationwide, 58 percent 
reported losses in commodities due to wildlife. This represents an 
increase of about 3 percent since 1989. Based on the median value of 
all producers' estimates of their losses, wildlife damage cost 
producers approximately $591 million in 1994, $130 million more than in 
1989.
    Average wildlife-caused losses represent 1 percent of the value of 
agriculture production, with loss rates varying widely among producers 
and commodities. The following percentages and estimated loss amounts 
are for FY 1994, based on total respondents to the NASS survey:
    Twenty-one percent of livestock/poultry producers reported losses 
totaling $140 million.
    Fifty-one percent of field crop producers reported losses totaling 
$316 million.
    Seventy-one percent of catfish or trout producers reported losses 
totaling $24 million.
    Thirty-nine percent of producers of ``other commodities'' such as 
nursery products or honey, reported losses totaling $18 million.
    Twenty-three percent of producers who had stored commodities 
reported losses totaling $26 million.
    Mr. Skeen. Please tell the Committee why you propose to reduce the 
number of sheep, goats, and cattle protected through the ADC program in 
fiscal years 1997 and 1998.
    Response. Beginning in FY 1995, we changed the method of 
determining the workload indicators to more accurately indicate 
performance measurements and outcomes. The use of new methodologies and 
a greater amount of data available through our national computerized 
reporting system allows for improved and refined accuracy in 
projections each year. The reduced projections for FY 1998 also reflect 
anticipated results of the proposed $3.25 million decrease in funding 
for the ADC Operations line item if States decide not to increase their 
cost-sharing.
    Skeen. Under the ADC program you state there is currently a 
significant disparity in the level of support that is being provided by 
individual states, ranging from 0 percent to 94 percent of total 
program costs. Please provide a list, by state, of the amount spent for 
ADC activities including a breakout of Federal and state contributions, 
for fiscal years 1995 and 1996.
    Response. The following table contains the amount of Federal 
appropriated funds and cooperator contributed funds allocated by State 
for FY 1995 and FY 1996. These funds are used for efforts such as 
resolution of wildlife conflicts at airports, the rabies control 
project in Texas and other human health and safety issues, as well as 
for the protection of endangered species and public and private 
property.

                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                         Fiscal year 1996                Fiscal year 1995       
                      State                      ---------------------------------------------------------------
                                                   Appropriation    Cooperator     Appropriation    Cooperator  
----------------------------------------------------------------------------------------------------------------
Alabama.........................................        $159,900         $31,963        $163,000         $57,465
Alaska..........................................          45,000         680,459          50,000         217,986
Arizona.........................................         448,799         265,791         434,384         267,774
Arkansas........................................         258,890                         259,690  ..............
California......................................       1,414,915       2,264,991       1,526,097       2,290,753
Colorado........................................         790,480         240,854         765,524         167,633
Connecticut.....................................           9,370  ..............          14,992  ..............
Delaware........................................          10,580  ..............          10,580  ..............
District of Columbia............................           4,761  ..............          10,580  ..............
Florida.........................................         151,950          78,743         155,200          44,150
Georgia.........................................         103,800         109,477         103,800         103,398
Hawaii..........................................         100,000         670,262          95,000         600,732
Idaho...........................................         936,144         411,400         905,819         406,106
Illinois........................................         117,050         326,137         117,050         320,447
Indiana.........................................          96,700          21,513         104,387          10,363
Iowa............................................          68,960           4,361          54,235           2,197
Kansas..........................................          75,000          33,804          75,000           1,126
Kentucky........................................          81,600         126,212         118,663         199,752
Louisiana.......................................         361,600         221,520         362,400         137,820
Maine...........................................         135,700          45,320         135,700          96,980
Maryland........................................          90,459          71,885          84,640          40,446
Massachusetts...................................          75,897          36,450          73,086          16,000
Michigan........................................          97,800          28,855         105,487           8,876
Minnesota.......................................         242,500              96         246,500              30
Mississippi.....................................         567,700         849,499         527,800         654,052
Missouri........................................         103,440          54,063         133,539          41,103
Montana.........................................         973,500         547,194         987,759         538,474
Nebraska........................................         393,874         332,556         372,174         245,502
Nevada..........................................         814,872         619,852         791,172         586,071
New Hampshire...................................         175,306          68,549         186,900          62,135
New Jersey......................................         109,340         208,182         105,784         428,990
New Mexico......................................       1,242,585       1,098,776       1,175,550       1,218,389
New York........................................         119,634         115,898         119,634          28,823
North Carolina..................................         185,850         575,420         135,850         305,579
North Dakota....................................         772,052         331,948         748,721         387,746
Ohio............................................         148,900          70,000         148,900          47,037
Oklahoma........................................         789,852         927,322         766,152         800,186
Oregon..........................................         974,440         724,621         943,788         737,608
Pennsylvania....................................          79,178  ..............          83,116  ..............
Rhode Island....................................           8,433  ..............           5,622  ..............
South Carolina..................................         163,611         269,778         113,611         245,648
South Dakota....................................         300,000         789,136         300,000         830,839
Tennessee.......................................         244,800         280,701         223,111         336,162
Texas...........................................       2,290,752       5,564,171       2,287,820       5,205,424
Utah............................................         996,992         840,175         962,067         764,823
Vermont.........................................          61,594          39,710          50,000          30,566
Virginia........................................         168,400         179,034         222,210         124,386
Washington/Guam.................................         588,637       2,230,392         566,183       2,064,108
West Virginia...................................          89,700         120,582          97,387          93,156
Wisconsin.......................................         525,500         951,596         525,500         904,144
Wyoming.........................................       1,006,781         471,136         971,317         427,924
                                                 ---------------------------------------------------------------
  Total.........................................      19,773,578      23,927,384      19,523,481      22,098,909
----------------------------------------------------------------------------------------------------------------

    Mr. Skeen. During fiscal year 1996, 17 ADC specialists were working 
full-time on projects in California to protect threatened and 
endangered species. What was the cost of providing these 17 full-time 
specialists? What did California contribute to this initiative? What 
rational is used for this expenditure?
    Response. We spent an estimated $528,843 in appropriated, 
cooperative and reimbursable funds to protect threatened and endangered 
species in FY 1996. Approximately $171,779 came from State, County, 
City, and organizational sources in California. These entities were 
required by the Endangered Species Act to mitigate the impact of their 
actions by protecting the listed species from predation by other 
wildlife. Federal funds were expended toward the protection of 
Federally protect species.
    Mr. Skeen. Provide a table that shows, by State, the amount that is 
spent on protection of threatened and endangered species activities.
    Response. The following table contains estimated total animal 
damage control operations expenditures by State, for protection of 
threatened and endangered species in FY 1996. This includes a 
combination of Federal reimbursable, and cooperative funding.

FY 1996 Federal/Reimbursable/Cooperative Expenditures

State:
    Alabama.............................................          $2,986
    Alaska..............................................          37,253
    Arizona.............................................           1,246
    Arkansas............................................................
    California..........................................         528,843
    Colorado............................................................
    Connecticut.........................................................
    Delaware............................................................
    District of Columbia................................................
    Florida.............................................           4,185
    Georgia.............................................................
    Hawaii..............................................         155,281
    Idaho...............................................          16,994
    Illinois............................................             175
    Indiana.............................................             420
    Iowa................................................................
    Kansas..............................................................
    Kentucky............................................................
    Louisiana...........................................          16,163
    Maine...............................................             550
    Maryland............................................................
    Massachusetts.......................................          20,422
    Michigan............................................................
    Minnesota...........................................         190,500
    Mississippi.........................................           2,888
    Missouri............................................................
    Montana.............................................         135,365
    Nebraska............................................           3,074
    Nevada..............................................................
    New Hampshire.......................................           1,000
    New Jersey..........................................           2,508
    New Mexico..........................................           1,500
    New York............................................             286
    North Carolina......................................................
    North Dakota........................................             670
    Ohio................................................................
    Oklahoma............................................................
    Oregon..............................................................
    Pennsylvania........................................................
    Rhode Island........................................              84
    South Carolina......................................................
    South Dakota........................................           2,183
    Tennessee...........................................................
    Texas...............................................          12,225
    Utah................................................           3,858
    Vermont.............................................................
    Virginia............................................              76
    Washington/Guam.....................................         130,362
    West Virginia.......................................................
    Wisconsin...........................................           4,030
    Wyoming.............................................          11,664
    Virgin Islands......................................           3,597
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................       1,290,388

    Mr. Skeen. I read where, due to the numerous sheep losses to 
coyotes, ranchers in Oregon want to use livestock protection collars 
filled with the banned 1080 poison. Describe the problem in Oregon and 
tell the Committee how you are handling the concerns of the ranchers.
    Response. Compound 1080 was registered by the EPA in 1985 for use 
in the Livestock Protection Collar--LPC. The Livestock Protection 
Collar is a highly selective control method that can be used to protect 
sheep from predation when other methods have proven to be ineffective 
or inappropriate. In January 1997, the EPA approved the use of the LPC 
in Oregon in response to a request from the Oregon livestock industry 
which is suffering heavy sheep and lamb losses. However, the Oregon 
Department of Agriculture--ODA--must also give its approval before the 
LPC can be used in that State. The ODA has recommended that the collar 
be tested in a rural sheep producing area of the State before approval 
can be granted. The ODA has also requested economic examples from APHIS 
concerning the benefits of using the LPC. Although there is currently 
no data detailing the monetary benefits of using the LPC, APHIS is 
currently gathering data on its effectiveness in reducing livestock 
predation. A final step required in the ODA approval evaluation process 
is a public meeting to consider information and to solicit public 
comment. APHIS hopes to meet with the ODA within a few weeks, to 
discuss the data prior to the public meeting.
                              karnal bunt
    Mr. Skeen. Describe in further detail your Karnal Bunt Emergency 
Project.
    Response. Our Karnal Bunt--KB--Emergency Project consists of survey 
regulatory, identification, and investigation activities, as well as 
control and compensation. As a regulatory Agency, we consider 
eradication a reasonable first objective in dealing with a new 
quarantine pest such as KB. This position has been supported by various 
industry groups, State departments of agriculture, and officials 
involved in international trade. The main goals of our program are to 
(1) protect U.S. export markets, (2) protect U.S. wheat producers in 
KB-free areas, (3) provide the best possible options for producers in 
regulated areas, and (4) maintain the best possible information on 
where KB is located. The management strategy we are currently using 
against the pathogen that causes KB concentrates on minimizing the 
probability that it will expand beyond areas where it currently exists 
and detecting an identifying it in other areas to which it might have 
inadvertently been moved. We expect that this strategy will be 
sufficient to allow wheat exports to continue moving. So far, we have 
been able to prevent the presence of KB in the United States from 
crippling the $5.9 billion wheat export market. Preserving this market 
is highly dependent on our successful continuation of the regulatory 
program and ongoing national survey to document that major wheat-
producing areas of the U.S. are free of KB.
    In October 1996, we published a final rule that established 
criteria for risk levels for areas with regard to KB and for the 
movement of regulated articles based on those risk levels. This rule 
also established criteria for the planting of seed from KB-host crops. 
These actions were warranted because they relieve unnecessary 
restrictions on areas regulated because of KB, while guarding against 
the artificial spread of the disease. Because of the difficulty of 
differentiating between spores of KB and spores of ryegrass, we will 
not take regulatory action will or unless proof exists that KB is 
present. We consider the finding of bunted kernels or positive 
pathogenicity tests as evidence that KB exists. Once we determine that 
KB is in a particular area, we would propose adding that area to the 
current Federal quarantine area.
    On March 17, 1997, we announced that we were no longer considering 
taking further regulatory action in the Southeast. We made this 
decision because no bunted kernels had been found in any samples in 
that region. We will soon publish a standard for determining the 
presence of KB that will apply to all parts of the country. 
Establishing this standard will ensure that all U.S. wheat producers 
and handlers are treated equitably regarding KB and that U.S. wheat has 
necessary certification to remain competitive in global markets. These 
actions were consistent with USDA's objective to protect the U.S. wheat 
industry while limiting restrictions to areas where KB disease occurs.
    The National Surveys enable us to provide assurance to all trade 
partners that KB is not present in major wheat-producing areas of the 
United States. Even if we do not detect any additional evidence of KB, 
the negative surveys would enable us to certify that wheat we are 
exporting has originated from areas where KB is not present. Therefore, 
we would be able to maintain our market share, as well as the 
confidence of our trade partners. We plan to expand these surveys to 
all 42 wheat-producing States in FY 1998.
    The KB program for the 1996-97 crop season will encompass portions 
of the Southwestern United States. The 1997 survey will identify any 
new areas where additional survey and control activities may be 
warranted. APHIS and the affected States will continue to take 
regulatory actions to conduct the full range of containment and control 
measures that have the least impact on production and do not restrict 
export trade. Also, we are cooperating with ARS in developing methods 
to detect, identify, prevent the spread of, and inactivate T. indica, 
which is the causal agent of KB. These activities include the detection 
and identification of T. indica in the laboratory and field through 
biochemical, statistical, and procedural methods; and physical or 
chemical decontamination of soil, seed, grain, equipment, and 
facilities.
    In FY 1998, we will engage in technology transfer to allow the 
wheat seed industry to fully adopt improved practices which insure that 
the U.S. wheat crop remains KB-free. We will implement practices to 
enable the grain and feed industry and State cooperators to participate 
in ongoing surveys of wheat production areas to show disease-free 
status. Also, we plan to develop, upgrade, and expand laboratory 
capabilities for detection and analysis. These activities are connected 
to implementation of basic research principles from ARS or other 
research institutions to control KB on a large scale. Specifically, the 
Agency would develop methods of killing KB spores in wheat field soil 
and in high volumes of wheat used as seed, grain, or feed. Also APHIS 
would develop an efficient and effective method of sampling grain in 
wheat fields for the presence of KB and develop efficient and effective 
methods of decontaminating equipment and facilities from KB. In 
addition, APHIS plans to develop a means to safely test and plant wheat 
seed, and a faster, less expensive means to process wheat samples for 
identification of KB.
    Mr. Skeen. You are proposing to spend $47 million of CCC funds for 
Karnal Bunt activities this fiscal year. Should Karnal bunt be 
classified as a minor crop disease?
    Response. KB is a minor crop disease, but could easily become a 
major threat to export markets. Our top priority in this program is to 
protect U.S. export markets. Currently, though, exports are not 
significantly affected because the disease has not reached the major 
wheat-producing areas of the United States. For example, only 3 percent 
of U.S. wheat is located in Arizona. We are still able to certify most 
wheat for export by demonstrating that wheat is not coming from areas 
where KB is known to be present. Also, we can certify that over 90 
percent of U.S. wheat originates in areas where KB is not known to be 
present and we have seen a relatively normal movement of wheat exports 
since the beginning of our program.
    Mr. Skeen. You state in the budget justifications that APHIS plans 
to transfer elements of the National Karnal Bunt Survey to the private 
sector. What elements would be transferred and is the private sector 
willing to accept such a transfer?
    Response. At least some of the sample collection element could be 
transferred. We can also effectively transfer parts of the sample 
analysis element to the private sector. We will be working with the 
private sector during the remainder of FY 1997 to determine how parts 
of the data analysis and data management elements of the National 
Survey can be transferred as well. As long as our trade partners regard 
KB as a phytosanitary issue, the private grain sector should be willing 
to take measures to prove that U.S. wheat does not present a 
significant risk of spreading KB. However, private sector acceptance of 
this transfer will depend on a mutually acceptable cost-share 
arrangement, whether our laboratories can be converted to work with the 
private sector, and our ability to ensure that the process that would 
be used by the private sector would yield an official sample to meet 
World Trade Organization requirements.With the increase proposed for 
the pest detection line item, we plan to propose a suitable cost-share 
arrangement to begin to address these concerns.
                national animal health monitoring system
    Mr. Skeen. Update the table that appears on page 81 of last year's 
hearing record, showing the annual cost and the FTEs assigned for each 
year to the National Animal Health Monitoring System Program, to 
include fiscal year 1996 actuals and fiscal year 1997 estimates.
    [The information follows:]

Cost of the NAHMS Program

                         [Dollars in thousands]

                                                            Cost (FTE's)
Fiscal year:
    1992................................................      $4,794(53)
    1993................................................       4,844(53)
    1994................................................       4,844(53)
    1995................................................       4,844(53)
    1996................................................       4,369(51)
    1997 (est.).........................................       4,643(47)

    Mr. Skeen. You anticipated Montana and Louisiana to become active 
in NAHMS participants in fiscal year 1997. Did this in fact happen?
    Response. Yes. Montana is now participating in the NAHMS Beef `97 
study and Louisiana is participating in NAHMS' catfish study.
    Mr. Skeen. How many states are currently participating in the NAHMS 
Program? Do you anticipate any new states signing up during fiscal year 
1997 or fiscal year 1998?
    Response. Twenty-three States are currently participating in NAHMS' 
Beef `97 study, 4 states are active in the catfish study, and 25 states 
are currently identified for the equine study in 1998, with 4 
additional states expressing interest; Louisiana, Maryland, Nebraska 
and New Jersey.
    Mr. Skeen. What were the critical information needs identified by 
animal health officials, producer groups, and private veterinary groups 
that were targeted in NAHMS?
    Response. The National Animal Health Monitoring System--NAHMS--Beef 
`97 study targeted the following: 1) disease management information 
such as vaccination, animal activity, and biosecurity measures, 2) 
animal health and management information that supports improving end 
product quality, 3) biosecurity and routine health management data to 
help achieve effective emergency disease preparedness, 4) Johnes 
disease and bovine leukosis data for trading partners, 5) animal health 
historical data to detect emerging new diseases or changing patterns of 
disease, and 6) new and old disease management technologies to improve 
production efficiency.
    Mr. Skeen. What is the status of the first ever NAHMS horse study 
planned for fiscal year 1998?
    Response. APHIS has completed the needs assessment process and is 
analyzing this data to determine the focus of the Equine `98 study. 
Field testing and training for the national study is scheduled for fall 
1997. Data collection will begin in early 1998 and will continue for 
approximately 12 months. Twenty-five States representing 75 percent of 
the Ag Census U.S. horse population are currently targeted to 
participate in the study. Four additional States have expressed 
interest: Louisiana, Maryland, Nebraska and New Jersey.
                        buildings and facilities
    Mr. Skeen. Update the tables that appear on pages 78 and 79 of last 
year's hearing record showing the buildings and facilities funds that 
have been appropriated, the amount of carryover, and what the funds 
will be used for to include fiscal year 1996 actualities and fiscal 
years 1997 and 1998 estimates.
    [The information follows:]

------------------------------------------------------------------------
                                                          ($000)        
              Fiscal year/project               ------------------------
                                                 Appropriated  Carryover
------------------------------------------------------------------------
1986:                                                                   
    For buildings and facilities, repairs and                           
     alterations...............................       $2,335            
    For the completion of a sterile tri-fly                             
     rearing facility in Hawaii................        1,901            
                                                --------------          
      Total....................................        4,236      $6,572
                                                ========================
1987:                                                                   
    For repair and improvement of existing                              
     facilities, and for construction of small                          
     buildings such as greenhouses.............        2,246         821
                                                ========================
1988:                                                                   
    For repair and improvement of existing                              
     facilities, and for construction of small                          
     buildings such as greenhouses.............        2,246          76
                                                ========================
1989:                                                                   
    To repair and improve the facilities at the                         
     Denver Wildlife Research Center...........        2,546         337
                                                ========================
1990:                                                                   
    For repair and improvements of existing                             
     facilities and for construction of small                           
     buildings, such as greenhouses............        4,422            
    Master plan to rebuild and modernize the                            
     Germplasm Quarantine Laboratory...........        3,000            
    Increase for the Denver Wildlife Research                           
     Laboratory................................        6,000            
                                                --------------          
      Total....................................       13,422       9,408
                                                ========================
1991:                                                                   
    Routine maintenance of buildings and                                
     facilities................................        4,396            
    The first phase of the National Germplasm                           
     Quarantine Center.........................       12,000            
    For the APHIS share of the Plum Island                              
     Animal Disease Center consolidation.......        5,000            
                                                --------------          
      Total....................................       21,396      23,393
                                                ========================
1992:                                                                   
    For buildings and facilities, repairs and                           
     alterations...............................        3,396            
    Construction of Phase II of the Plant                               
     Germplasm Quarantine Center...............       12,000            
    Increase for Denver Wildlife Research                               
     Center....................................        2,500            
    Modernization and construction of the Plum                          
     Island Animal Disease Center..............        3,500            
                                                --------------          
      Total....................................       21,396   \1\ 40,21
                                                                       7
                                                ========================
1993:                                                                   
    For basic buildings and facilities, repairs                         
     and alterations...........................        5,400            
    For design of Phase III of the Plant                                
     Germplasm Quarantine Center...............        1,000            
    Modernization and construction of the Plum                          
     Island Animal Disease Center..............        3,500            
    Master plan for a screwworm rearing                                 
     facility in Panama........................          500            
                                                --------------          
      Total....................................       10,400   \2\ 38,57
                                                                       2
                                                ========================
1994:                                                                   
    For basic buildings and facilities, repairs                         
     and alterations, and preventative                                  
     maintenance...............................        6,973            
    Complete Phase IB of the Denver Wildlife                            
     Research facility.........................        2,000            
    Replace the Animal Predator facility.......          500            
    Expand the Plant Methods Development                                
     Rearing facility..........................          672            
                                                --------------          
      Total....................................       10,145   \2\ 40,80
                                                                       0
                                                ========================
1995:                                                                   
    For basic buildings and facilities, repairs                         
     and alterations and preventative                                   
     maintenance...............................        4,973   \2\ 33,49
                                                                       3
                                                ========================
1996:                                                                   
    For basic buildings and facilities, repairs                         
     and alterations, and preventative                                  
     maintenance...............................        9,044   \3\ 29,56
                                                                       1
                                                ========================
1997 (est.):                                                            
    For the APHIS share of the Plum Island                              
     Animal Disease Center modernization.......        3,200       5,761
                                                ========================
1998 (est.):                                                            
    For basic buildings and facilities, repairs                         
     and alterations, and preventative                                  
     maintenance...............................        4,000            
    For the APHIS share of the Plum Island                              
     Animal Disease Center modernization.......        3,200            
                                                --------------          
      Total....................................        7,200       4,961
------------------------------------------------------------------------
\1\ $24 million of this amount is for the National Plant Germplasm      
  Quarantine Center.                                                    
\2\ $25 million of this amount is for the National Plant Germplasm      
  Quarantine Center.                                                    
\3\ $22 million of this amount is for the National Plant Germplasm      
  Quarantine Center.                                                    

    Mr. Skeen. What is the status of construction of the new National 
Wildlife Research Center in Fort Collins, Colorado?
    Response. The General Services Administration--GSA--agreed to 
partner the construction of the office/laboratory/headquarters 
building. GSA is currently soliciting bids from private companies who 
will finance and construct the building at the CSU foothills site and 
lease it to APHIS at an estimated annual cost of $2.3 million, 
including maintenance costs. Construction is expected to begin in the 
third quarter of FY 1997.
    During FY 1997, approximately $1,082,463 will be obligated for 
theconstruction of Simulated Natural Environments and a tunnel washer 
within the Animal Research Building--ARB, and to complete the design of 
the office/laboratory/headquarters building.
    To make full use of the new Center, and to complete the Master Plan 
as approved in 1989, the remainder of the outdoor animal research 
facilities and supporting structures need to be constructed. Those 
structures remaining to be constructed with future funding, and for 
which design work has been completed, include: the ARB support wing, 
the outdoor animal holding and testing pens, the garage/maintenance/
shop building, the equipment compound, the bulk chemical storage 
building, and the storage/warehouse building. The estimated remaining 
construction cost for these structures is $16.1 million in 1995 
dollars. Additionally, a one-time investment of $946,000 for equipment 
and technology will be required. This will allow the Center to maintain 
its research capabilities in terms of modern technologies such as 
analytical instrumentation, computing infrastructure, information 
transfer capabilities, etc.
    Mr. Skeen. Provide an updated breakout of the funding needed to 
complete each remaining component of the entire project.
    Response. The following is a description of remaining construction/
funding needs totaling approximately $16.1 million:
    Site preparation and construction of outdoor animal holding and 
testing pens, equipment compound, and garage/maintenance shop: $8.8 
million.
    Animal research support building, storage warehouse, bulk chemical 
storage building, landscaping and irrigation: $5.6 million.
    Fixed equipment for the main laboratory/headquarters building: $1.7 
million.
               national plant germplasm quarantine center
    Mr. Skeen. The design for both phase I and II of the National 
Germplasm Quarantine Center in Beltsville, Maryland was scheduled for 
completion in February 1997. What is the status of both?
    Response. Initial design has been completed for Phases I and II of 
the National Plant Germplasm Quarantine Center in Beltsville, Maryland.
                     plum island modernization plan
    Mr. Skeen. Provide a complete long-term modernization plan for work 
at the Plum Island Animal Disease Center in New York.
    Response. The Plum Island Animal Disease Center is an Agricultural 
Research Service facility. In 1983, a memorandum of understanding--
MOU--transferred the diagnostic laboratory functions to APHIS. APHIS 
and ARS signed a Memorandum of Agreement in 1989 that established 
facilities improvement management plan and operational 
responsibilities. This same agreement provided for funding of a 
facilities deficiency study, provided for an annual meeting on or about 
March 1, and established APHIS' share based upon a program support 
ratio.
    In 1994 a new MOU was signed and replaced the 1983 MOU. This new 
MOU provided a new method of distributed mutual support costs based on 
an allocated space ratio. The ratio was 61 percent ARS and 39 percent 
APHIS. Since then, the two agencies have requested funding for 
modernization at $8.2 million per year--$3.2 million for APHIS and $5 
million for ARS. Approximately $24 million has been appropriated for 
the Plum Island modernization project since 1993.
    The following table reflects projects through FY 1998 for APHIS' 
share of the modernization plan:

------------------------------------------------------------------------
                                                                  Cost  
                     Fiscal year/project                         ($000) 
------------------------------------------------------------------------
1997:                                                                   
    (1.) Electrical/telephone distribution system: Construct            
     new underground electrical distribution system and                 
     prepare telecommunication trench system.................     $2,800
    (2.) Upgrade pathological incinerators: Design air                  
     emission control systems for the pathological                      
     incinerators to meet the Clean Air regulations..........        400
                                                              ----------
      Total..................................................      3,200
                                                              ==========
1998:                                                                   
    (1.) Upgrade pathological incinerators: First                       
     construction phase to install air emission control                 
     systems to the West Animal Wing incinerator.............      1,900
    (2.) Environmental remediation: Perform closure plans;              
     remedial actions of facilities and incinerators found to           
     have an environmental release...........................      1,300
                                                              ----------
      Total..................................................      3,200
                                                              ==========
1999:                                                                   
    (1.) Upgrade pathological incinerators: Complete                    
     installation of air emission control systems for the               
     East and Orient Animal Wing incinerators................      1,800
    (2.) Plum Island Harbor repairs: Construct replacement of           
     wood bulkheads, pilings, and dolphins. Repair pavement             
     and drainage............................................      1,400
                                                              ----------
      Total..................................................      3,200
------------------------------------------------------------------------

                           imported fire ant
    Mr. Skeen. APHIS has a cooperative agreement with the University of 
Arkansas at Monticello to conduct research on imported fire ants. The 
three areas funded by this agreement are a self-supporting community 
abatement program, an economic impact assessment, and an ARS biological 
control project. What is the total amount of the cooperative agreement 
and how much is spent in each area?
    Response. The total amount of this agreement is $200,000; $76,000 
on the self-supporting community abatement program; $100,000 for the 
economicimpact assessment; and $24,000 for the ARS biological control 
project.
    Mr. Skeen. Provide a breakout, by state, of where the $1.0 million 
provided for the imported fire ant program in fiscal year 1997 is being 
spent. How much does each state contribute to the program?
    [The information follows:]

                       IMPORTED FIRE ANT SPENDING                       
------------------------------------------------------------------------
                                               Fiscal year 1997         
                                     -----------------------------------
                State                  Estimated APHIS   Estimated State
                                         obligations      contributions 
------------------------------------------------------------------------
Alabama.............................           $67,913           $65,273
Arizona.............................            14,009           257,545
Arkansas............................           322,616            16,000
Florida.............................           174,028           199,743
Georgia.............................            67,913            19,235
Lousisiana..........................            58,015            83,586
Mississippi.........................            25,467            84,650
Nevada..............................             9,106             2,615
New Mexico..........................            14,709             2,103
North Carolina......................            25,467           150,000
Oklahoma............................            17,004            15,000
South Carolina......................            38,201            25,000
Tennessee...........................            25,467            80,000
Texas...............................           140,085           178,960
Virginia............................  ................            25,000
                                     -----------------------------------
  Total.............................        $1,000,000        $1,179,710
------------------------------------------------------------------------

    Mr. Skeen. If no effective, efficient, and environmentally 
acceptable control agents are available for imported fire ant control 
for large scale application on agricultural land, how is the funding 
provided in fiscal year 1997 being used?
    Response. The funding provided in FY 1997 is being used primarily 
to enforce the quarantine, which prevents further spread of the IFA. 
Also, $200,000 is being provided to the University of Arkansas at 
Monticello to conduct research; $25,000 of this amount supports ARS 
research.
    Mr. Skeen. When do expect the testing to be complete on the three 
different biological control organisms for potential impact on imported 
fire ants to be complete?
    Response. In FY 1996, ARS developed a 5-year plan for studying and 
introducing these three organisms into the U.S. from South America. 
These organisms represent a microsporidium disease (Thelohania), a 
species complex of phorid flies (Phoridae), and a social parasitic ant 
(laubachena dagarri). Several colonies of these agents are currently 
being studied at the ARS quarantine facility in Gainesville, Florida. 
We do not expect these studies to be completed until 2001.
                            brown tree snake
    Mr. Skeen. Department of Defense allocated $1.0 million to APHIS in 
fiscal year 1996 for a brown tree snake control program. Did you 
receive any funding for this program in fiscal year 1997?
    Response. Yes, the Department of Defense provided $1 million to 
continue the BTS control program in FY 1997.
    Mr. Skeen. What is the status of the negotiations with the 
Commonwealth of the Northern Marianas to establish an operational brown 
tree snake program on Saipan?
    Response. APHIS submitted a $200,000 proposal for an operational 
control program to the Commonwealth of the Northern Marianas. The 
proposal was rejected by Commonwealth representatives. However, through 
a $40,000 interagency agreement with the FWS, APHIS is providing 
technical assistance, training, and equipment in the control of the BTS 
to residents of Saipan.
                       pest and disease exclusion
    Mr. Skeen. At this time last year, you anticipated a final rule by 
the end of fiscal year 1996 in support of an effort to develop 
regionalization and risk assessment elements into pest and disease 
exclusion programs as well as standardized procedures for foreign 
clearance programs. Was this goal achieved?
    Response. In April 1996, APHIS published a proposed rule 
establishing new criteria for allowing or excluding importations of 
animals and animal products based on regionalization of animal diseases 
and scientific risk assessments. APHIS is reviewing comments received 
on this proposed rule.
    Mr. Skeen. Your agency drafted a legislative proposal to give the 
Secretary the authority to monitor and regulate international trade and 
interstate movements of aquatic animals, plants, and products. What is 
the status of this proposal? Has it been submitted to Congress for 
approval?
    Response. The proposal is undergoing administrative review at the 
Department. The aquaculture legislative proposal has not been submitted 
to Congress for approval.
                         biotechnology permits
    Mr. Skeen. Electronic submissions of biotech notifications was only 
at about nine percent last year. Has this percentage increased over the 
past year or did it remain about the same?
    Response. Electronic submissions of biotech notifications remains 
at the same percentage levels last year. We do not anticipate any 
increases for the current year.
    Mr. Skeen. Do you anticipate developing procedures for electronic 
submissions of biotech permits as well?
    Response. Although electronic submissions of biotech notifications 
are available, most applicants prefer traditional hard-copy submissions 
because most submissions are unique. Furthermore, new regulations are 
in final review to make most plants eligible for notifications and 
reduce the need for biotechnology permits by 80 to 90 percent. The new 
regulation should be in effect by April 1997. Given these two factors, 
we do not anticipate developing electronic submissions for 
biotechnology permits. We will, however, continue to monitor the number 
of notifications and permit submissions and the utilization of 
electronic submissions. If the pattern of usage changes substantially, 
we will reevaluate the need for electronic permit submission.
                           emergency funding
    Mr. Skeen. Describe for us what has happened during the past year 
in terms of serious outbreaks of pests and diseases. What kind of pest? 
From where did they come? How have you managed them? What resources did 
you expend on each?
    [The information follows:]
Asian gypsy moth/European gypsy moth
    In FY 1996, we spent, in contingency funds, approximately $700,000 
to control European Gypsy Moth--EGM--and $1.4 million for several Asian 
Gypsy Moth--AGM--projects.
    The EGM project involved pre-treatment delimiting, pesticide 
application, and post-treatment delimiting activities on approximately 
600,000 acres in 15 States, which participated on a 50/50 cost share 
basis. APHIS continued cooperative agreements with 6 of these States 
(Minnesota, North Carolina, Tennessee, Virginia, Washington, and 
Wisconsin) that have experience in managing EGM control activities. 
They contracted for pesticide and aerial application treatments to 
control localized infestations. In the other nine States (Arkansas, 
Georgia, Illinois, Indiana, Iowa, Missouri, Nebraska, Ohio, and West 
Virginia), APHIS conducted and supervised most of the control work. 
APHIS conducted or cooperated in gypsy moth treatment control 
activities that involved pesticide applications of Bacillus 
thruringiensis--Bt--and mass trapping activities. In addition to actual 
pesticide applications, pretreatment delimiting surveys were carried 
out at multiple sites at a density of 25 traps per square mile to 
define the extent and location of isolated gypsy moth populations for 
subsequent treatments. Most of these infestations occurred as a result 
of the movement of infested outdoor household articles and nursery 
stock. FY 1996 delimiting surveys in Georgia, North Carolina, and South 
Carolina led to positive results for multiple moths.
    The AGM projects include activities at three treatment sites in 
Washington State, DNA identification at APHIS' Plant Protection Center 
in Otis, Massachusetts, nationwide port surveys, and continuation of 
control and eradication activities in North Carolina and South 
Carolina. To address a FY 1995 AGM introduction in Washington State, 
the program conducted surveys, trapping, genetic testing, and aerial Bt 
treatments at three sites over a range of 7,500 acres. A large-scale 
post-treatment survey conducted in and around high-risk ports and 
waterways yielded and no catches. Activities conducted at the Otis 
facility consisted primarily of molecular screening of submitted 
specimens. Also, we entered into cooperative agreements with Cornell 
University and the University of Massachusetts. In North Carolina, each 
of the three catch sites (1 square mile in size) served as the center 
of a 640-acre treatment block. They were each treated twice with aerial 
Bt applications and a total of 1,490 acres were sprayed twice. 
Approximately 19,000 traps were set over 900 square miles at a density 
rate of 25 traps per square mile. Close to 100 moths were caught in 
this survey and sent to the Otis facility for DNA analysis, none which 
tested positive for the Asian genotype. On November 1, 1996, APHIS and 
Forest Service Officials declared eradication of AGM in North Carolina. 
To verify eradication in FY 1997, the Agency will conduct a 
significantly reduced level of trapping (about \3/4\ less than in FY 
1996) of the area that was sprayed in FY 1996. In addition, port 
surveys will be conducted to prevent future introductions.
Boyine Spongiform Encephalopathy--BSE
    We spent $151,000 in contingency funds, to purchase and dispose 
cattle imported from the United Kingdom--UK. Of the 496 cattle of U.K. 
origin imported into the United States from January 1981 through July 
1989, tracing indicated that 113 were known to be alive. From March 20, 
1996 to May 10, 1996, 37 of these animals were voluntarily disposed of 
by their owners.
    In June 1996, APHIS offered a window of opportunity to the owners 
of the remaining 76 cattle, for APHIS to purchase and dispose of these 
animals. In addition, APHIS reimbursed the owners of the 37 cattle 
disposed of between March 20 and May 10, 1996, the difference between 
the salvage price they received and the incentive price being offered 
to the owners of the remaining 76 animals. During this window, APHIS 
disposed of another 37 animals. An additional animal died from natural 
causes during this window. The owners of the remaining 38 did not 
choose to sell their animals to APHIS for disposal.
Citrus canker
    We contributed, $1.6 million in contingency funds to the citrus 
canker emergency project in Florida. This amount supplemented $250,000 
that APHIS redirected from the Miscellaneous Plant Pests and Diseases 
line item for a total APHIS contribution of approximately $1.9 million. 
The State of Florida contributed $2.3 million. The program consisted of 
an intensive survey to delimit the limits of the outbreak, regulatory 
action to prevent the movement of potentially infected materials, 
removal and destruction of infected trees, and pruning of exposed trees 
of all levels and softwood. Other activities included a safety program 
and a public relations campaign to inform the public of the infestation 
and the project's progress.
Mexican fruit fly
    APHIS spent $761,00 in contingency funds to assist the State 
ofCalifornia in eradicating two outbreaks of Mexican fruit flies in the 
City Terrace region of Los Angeles County and the National City area of 
San Diego County. Through a 50/50 cost-share arrangement, APHIS and the 
California Department of Food and Agriculture--CDFA--conducted sterile 
fly releases, delimiting and monitoring surveys, limited ground 
application of pesticides, and regulatory activities. The Los Angeles 
County program consisted of ground treatments of Malathion and bait 
mixture followed by sterile fly release over a 16-square-mile area. The 
flies used were raised in a fruit fly facility in Mexico that is 
jointly funded by Mexico and CDFA. In the San Diego program, CDFA 
conducted ground application of malathion and bait mixture, fruit 
cutting and stripping followed by the aerial releases of 13 million 
sterile flies per week over a 9 square mile area with flies produced by 
the APHIS rearing facility in Mission, Texas. The sterile flies were 
released for two life cycles of the pest, followed by intensive 
trapping. In the San Diego area, emergency and regulatory activities 
were terminated in July 1996. Regulatory and trapping activities 
continue in Los Angeles County.
Pine Shoot Beetle--PSB
    We spent $268,509 contingency funds for surveys at the leading edge 
of the infestation in northeastern States. Specific activities included 
servicing traps, placing bait logs in the eight States, and conducting 
delimiting surveys on the leading edge of the infestation to determine 
the pest's distribution. Since the PSB was first detected in Ohio in 
July 1992, surveys have detected it in 147 counties in eight States: 
Illinois, Indiana, Maryland, Michigan, New York, Ohio, Pennsylvania, 
and West Virginia. Since November 1992, APHIS and the States have been 
conducting regulatory actions to control the interstate movement of 
regulated articles out of the quarantine area. The infested States 
support the cooperative program with parallel quarantines and in-kind 
cost sharing. These activities are designed to prevent the artificial 
movement of the PSB from infested to non-infested areas in the United 
States.
Vesicular stomatitis
    We spent $134,000 in contingency funds to respond to a vesicular 
stomatitis outbreak in the Western States. Vesicular stomatitis is a 
viral disease that primarily affects cattle, horses, and swine. While 
the disease can cause economic losses to livestock producers, such as 
weight loss and a loss in milk production, it is particularly 
significant because of its outward signs being identical to those of 
FMD disease.
    During the outbreak, which began in May 1995 and ended in January 
1996, APHIS investigated a total of 1,162 premises. Of the premises 
investigated, 367 were found positive with 186 in New Mexico, 165 in 
Colorado, 1 in Arizona, 1 in Texas, 6 in Utah, and 8 in Wyoming. Of the 
367 premises, 53 involved bovines only, 250 involved equines only, 37 
involved bovines and equines, and 27 involved bovines and/or equine 
plus another species (llama, etc.).
Karnal bunt
    In March 1996, the pathogen that causes KB was detected in 
certified wheat seed produced in Arizona; this marked the first time 
that the pathogen had been detected in the United States. Based on this 
detection and its possible repercussions, Secretary Glickman declared 
an emergency and an extraordinary emergency, transferring $24.7 million 
from the Commodity Credit Corporaiton--CCC--to eradicate KB in areas of 
Arizona where the disease was present and to protect areas in Texas and 
New Mexico where the disease might have been introduced by planting 
infected seed. Shortly thereafter, APHIS initiated a program consisting 
of survey, regulatory, identification, and investigation activities, as 
well as control and compensation.
    On May 10, 1996, an additional $12 million was transferred from the 
CCC, primarily for similar activities in California. This second 
transfer brought the total availability for FY 1996 to $36.7 million. 
Of this total, $18.7 million was specifically allocated for 
compensation payments to millers, farmers, and grain handlers. The 
balance of $18 million was allocated for operating costs, which cover 
surveys, testing, regulatory, and laboratory work.
    The main goals of the program are to: (1) protect U.S. export 
markets; (2) protect U.S. wheat producers in KB-free areas; (3) provide 
the best possible options for producers in regulated areas; and (4) 
maintain the best possible information on where KB is located.
    So far, the USDA has been able to prevent the presence of KB in the 
United States from crippling the $5.9 billion wheat export market. 
Preserving this market is highly dependent on our successful 
continuation of the regulatory program and ongoing national survey to 
document that major wheat-producing areas of the U.S. are free of KB.
    APHIS conducted investigations in Arizona, California, New Mexico, 
and Texas to determine the origin and destination of contaminated seed. 
Also, the Agency regulated the movement of wheat and other articles 
that could cause further spread of the disease and developed sampling 
and testing systems that would allow for the movement of grain found 
free of KB from the regulated area.
    We identified infected properties in Arizona and California by 
conducting surveys of wheat just before harvest. Preharvest survey, 
however, is expensive and intrusive to growers; we are designing 
alternatives to evaluate the status of fields growing wheat.
    APHIS organized a national survey program to determine if KB was 
present in other wheat-growing areas of the United States. The 
methodology we are using has proven to be extremely effective in 
detecting teliospores in wheat samples. Current results of the national 
survey--which tested approximately 16,000 samples representing all 
wheat-growing areas of the U.S.--demonstrate that the vast majority of 
the United States, including the wheat belt, is free of KB.
Mediterranean fruit fly--medfly
    In FY 1996, APHIS and CDFA addressed the Medfly emergency through a 
1,531-square-mile quarantine area in the Los Angeles Basin that 
encompassed parts of Los Angeles, San Bernardino, and Orange Counties. 
A total of $10 million was available through use of the Secretary's 
emergency transfer authority from Commodity Credit Corporation. We 
released 430 million sterile flies per week over an area of 
approximately 1,450 square miles. Sterile fly releases were completed 
in March followed by intensive trapping. The quarantine in the Los 
Angeles Basin ended on July 31, 1996.
    In the populated, mainly urban areas of the Los Angeles Basin, the 
Medfly program released sterile flies as the principal method of 
eradication, with some ground application of malathion bait. The aerial 
release of malathion was used on a very limited basis to combat 
outbreaks in commercial agriculture areas. Recent examples included 
outbreaks in Camarillo and Corona. Both occurred outside the LA Basin 
quarantine area in primarily commercial fruit and vegetable production 
areas and met specific criteria for malathion aerial spraying. Other 
activities included high density detectionand delimiting surveys, 
fruitstripping, and fruitcutting.
    Mr. Skeen. How was your emergency authority used in fiscal year 
1996? How much did you use for each incidence and was it all 
transferred from CCC? Have you used your authority in 1997?
    Response. The Secretary used his emergency transfer authority in 
all cases transferring funds from the CCC in FY 1996 and FY 1997 for 
the following programs:

                                               EMERGENCY TRANSFERS                                              
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                      Approved                                                  
                                                       for CCC   Actual CCC    FY 1996      FY 1996     FY 1997 
                                                       release    transfer   obligations   carryover   available
----------------------------------------------------------------------------------------------------------------
FY 1996:                                                                                                        
    Karnal bunt....................................     $36,734     $24,940      $24,322     $12,412  ..........
    Mediterranean fruit fly........................      10,000       7,409        8,723       2,591       2,591
FY 1997 (est.):                                                                                                 
    Kernal bunt....................................      34,759      34,759  ...........      12,412      47,171
----------------------------------------------------------------------------------------------------------------
\1\ Includes FY 1995 carryover funds.                                                                           

    Mr. Skeen. Update the table that appears on pages 47, 48, and 49 of 
last year's hearing record showing a breakout of the number of 
emergencies that occurred, as well as the amount of both agency and CCC 
funds that were used to combat the emergency to include fiscal year 
1996 actuals and fiscal year 1997 estimates.
    [The information follows:]

                      ANIMAL AND PLANT HEALTH INSPECTION SERVICE EMERGENCY PROGRAM FUNDING                      
                                             [Dollars in thousands]                                             
----------------------------------------------------------------------------------------------------------------
                                                                                           Agency        CCC    
                  Fiscal year                                   Emergency                  funds    expenditures
----------------------------------------------------------------------------------------------------------------
1987...........................................  Africanized honeybee..................     $1,750  ............
                                                 Avian influenza.......................        740  ............
                                                 Black parlatoria scale................        300  ............
                                                 Citrus canker.........................      1,800  ............
                                                 Gypsy moth............................        145  ............
                                                 Exotic newcastle......................        605  ............
                                                 Medfly................................      2,070  ............
1988...........................................  Africanized honeybee..................      1,550  ............
                                                 Medfly................................        868  ............
                                                 Melon fly.............................        313  ............
                                                 Peach fruit fly.......................        567  ............
                                                 Salmonella enteritidis................        520  ............
                                                 Varroa mite...........................      1,162  ............
1989...........................................  Boll weevil...........................  .........        $6,200
                                                 Exotic newcastle......................        405  ............
                                                 Exotic ticks (ostrich)................        275  ............
                                                 Medfly................................      3,045  ............
                                                 TB....................................        410  ............
1990...........................................  Africanized honeybee..................        397  ............
                                                 Agricultural quarantine inspection....        270              
                                                 Gypsy moth............................        541  ............
                                                 Medfly................................  .........        29,842
                                                 Salmonella enteritidis................  .........         2,880
                                                 Scrapie...............................        505  ............
                                                 TB....................................      1,208  ............
1991...........................................  Bovine spongiform encephalopathy......        487  ............
                                                 Chrysanthemum white rust..............        170  ............
                                                 Gypsy moth............................        572  ............
                                                 Exotic newcastle......................        189  ............
                                                 Potato virus Y........................        516  ............
                                                 Medfly................................  .........         5,901
                                                 Salmonella enteritidis................  .........         3,538
                                                 TB....................................      1,202  ............
1992...........................................  AGM...................................  .........         8,880
                                                 Gypsy moth............................        580  ............
                                                 Medfly................................  .........         8,750
                                                 Potato virus Y........................      1,311  ............
                                                 Salmonella enteritidis................      2,460           297
                                                 Screwworm.............................        825  ............
                                                 Sweetpotato whitefly..................        298  ............
1993...........................................  Avian influenza.......................        780  ............
                                                 Chrysanthemum white rust..............        402  ............
                                                 Gypsy moth............................        729  ............
                                                 Medfly................................  .........        16,094
                                                 Potato virus Y........................        752  ............
                                                 PSB...................................        635  ............
                                                 Salmonella enteritidis ...............        166           117
                                                 Scrapie...............................      1,920  ............
                                                 Screwworm.............................      1,575  ............
                                                 TB....................................        602  ............
1994...........................................  AGM...................................  .........         3,439
                                                 Canine rabies.........................        474  ............
                                                 Chrysanthemum white rust..............        282  ............
                                                 E. coli 0157:H7.......................        697  ............
                                                 EGM...................................        506  ............
                                                 Medfly................................  .........        15,966
                                                 PSB...................................        449  ............
                                                 Tropical bont tick....................        350  ............
1995...........................................  AGM...................................      3,000         1,841
                                                 Canine rabies.........................      1,319  ............
                                                 EGM...................................        986  ............
                                                 Medfly................................  \1\ 3,000        10,711
                                                 PSB...................................        892  ............
                                                 TB....................................         30  ............
                                                 Vesicular Stomatitis..................        720  ............
1996...........................................  AGM and EGM...........................      2,045  ............
                                                 Bovine spongiform encephalopathy......        151  ............
                                                 Citrus Canker.........................      1,616  ............
                                                 Karnal bunt...........................  .........        24,322
                                                 Medfly................................  .........         8,723
                                                 Mexican fruit fly.....................        761  ............
                                                 PSB...................................        269  ............
                                                 1996 Summer Olympics..................        429  ............
                                                 TB in Cervidae........................         54  ............
                                                 Vesicular stomatitis..................        134  ............
1997 est.......................................  AGM and EGM...........................      1,558  ............
                                                 Asian long-horned bettle..............        694  ............
                                                 Bovine spongiform encephalopathy......        101  ............
                                                 Citrus Canker.........................      2,900  ............
                                                 Karnal bunt...........................  .........        47,171
                                                 Medfly................................  .........         1,227
                                                 PSB...................................        336  ............
                                                 TB in Cervidae........................        400  ............
----------------------------------------------------------------------------------------------------------------
\1\ Of this amount, $2 million was released from Contingency Fund and $1 million was transferred from the       
  Buildings and Facilities account.                                                                             

                           tropical bont tick
    Mr. Skeen. Fiscal year 1995 was the first year APHIS requested 
funding to participate in a joint project with the Food and 
Agricultural Organization, the Inter-American Institute for Cooperation 
on Agriculture, and the Caribbean Community to eradicate the tropical 
bont tick from the Caribbean Islands. Please provide the Committee with 
an updated status report of this initiative?
    Response. Eradication activities started in Anguilla in June 1995, 
St. Kitts/Nevis in October 1995, and Montserrat in February 1996. 
Within these Islands, bi-weekly treatments with acaricides are applied 
to 73 percent of the animals on Anguilla, 68 percent of the animals on 
St. Kitts, and 96 percent of the animals on Nevis. As eradication 
progresses, the percentage of animals treated should increase and tick 
populations should decrease to very minimal levels of acceptable risk. 
Eradication phases in each country should continue for approximately 30 
months. Treatments have been suspended on Montserrat due to volcanic 
activity. In FY 1997, the surveillance and other preparatory activities 
will begin in Antigua which has a significant livestock population 
relative to neighboring islands.
    Mr. Skeen. Also, update the table that appears on page 50 of last 
year's hearing record showing the funding levels provided to the 
project by organization.
    Response. Although the cooperative eradication program will be 
extended by 1 year, estimated total costs for the 6-year cooperative 
program continue to be approximately $29.5 million.

        Organization                                              Amount
U.S. Department of Agriculture/APHIS....................      $2,500,000
Food and Agriculture Organization--FAO..................       1,363,000
Inter-American Institute for Cooperation on 
    Agriculture--IICA...................................         250,000
Caribbean Community (Caricom)................................. 4,600,000
European Union/CAP......................................         900,000
European Union/France \1\...............................      17,000,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total pledged.....................................      26,613,000
Program estimate........................................      29,500,000
Current shortfall.......................................       2,887,000

\1\ Although France received money from the European Union to eradicate 
the TBT on their islands in the Caribbean, France insists on operating 
independently of the Regional Amblyomma Eradication Program.
In addition, FAO and the International Fund for Agricultural 
Development--IFAD--agreed to fund $1 million for TBT research in the 
Caribbean. This research will support the CAP's eradication activities.
---------------------------------------------------------------------------
                         foot-and-mouth disease
    Mr. Skeen. The Vesicular Disease Diagnostic Laboratory in Panama 
City, Panama provides foot-and-mouth disease testing for the Central 
American region. It was closed in September 1994 for repairs and was 
scheduled to reopen in January 1996, but was delayed. What was the 
reason for this delay and when do you expect it to reopen?
    Response. The delay is reopening the APHIS-supported Vesicular 
Disease Diagnostic Laboratory--LADIVES--in Panama City, Panama, was 
caused by several factors, including: (a) difficulties in selecting a 
contractor to conduct a careful needs assessment of the physical plant 
for repairs and upgrades; (b) funding and logistical issues related to 
repairs and biosecure sealant treatments necessary to prepare the 
laboratory for level 3 biosecurity--a high security level; (c) the 
reduction in Defense operations in the Canal Zone reduced the 
availability of trained technicians in Panama required for the 
specialized work; and (d) delays in the shipment of various equipment, 
including air flow systems and filters from the Foreign Animal Diseases 
Diagnostic Laboratory at Plum Island, New York. During the period 
LADIVES was closed, diagnostic functions were performed by the facility 
at Plum Island.
    In November 1996, LADIVES completed the necessary renovations and 
reopened to provide biocontainment and appropriate diagnostic 
capabilities for exotic animal diseases including FMD. Through these 
improvements, the laboratory provides laboratory diagnosis and 
detection capabilities for the Central American region that meet world 
standards. LADIVES supports the U.S.-Panama Cooperative Program for the 
Prevention of Foot-and-Mouth Disease--COPFA, which continues to 
maintain the Darien Gap area of Panama free from FMD through active 
field surveillance in the border area and the high-risk Panamanian 
ports.
                           overseas locations
    Mr. Skeen. Through your international program, APHIS maintains a 
presence in countries that are significant agricultural trading 
partners. For the record, please provide a list of all countries where 
APHIS has personnel, the number of employees in that country, and a 
brief description of the work conducted in that country.
    [The information follows:]

          FOREIGN PROGRAM LOCATIONS, PERSONNEL, AND ACTIVITIES          
------------------------------------------------------------------------
                                     U.S.                               
            Country               personnel            Programs         
------------------------------------------------------------------------
Agrentina......................            1  Preclearance.             
Brazil.........................            1  FMD liaison.              
Chile..........................            2  Regional office,          
                                               preclearance,            
                                               International            
                                               Programs.\1\             
Colombia \2\...................            1  FMD, International        
                                               Programs,\1\ emphasis on 
                                               plant health trade       
                                               issues.                  
Peru...........................            1  Preclearance,             
                                               International Programs.  
Australia......................            1  International Programs.\1\
China..........................            1  International Programs,\1\
                                               emphasis on plant trade  
                                               issues.                  
Japan..........................            1  International Programs,\1\
                                               emphasis on trade dispute
                                               resolution and           
                                               harmonization of         
                                               phytosanitary            
                                               requirements.            
Korea..........................            1  International Programs,\1\
                                               emphasis on plant trade  
                                               issues.                  
Austria........................            1  International Programs.\1\
Belgium........................            2  Regional office,          
                                               International            
                                               Programs,\1\ emphasis on 
                                               European Union trade     
                                               issues.                  
Germany........................            1  Military preclearance.    
Italy..........................            1  International Programs,\1\
                                               emphasis on sanitary and 
                                               phytosanitary            
                                               requirements.            
Netherlands....................            2  Bulb preclearance.        
Kenya..........................            1  International Programs,\1\
                                               emphasis on technical    
                                               exchange and cooperation.
Costa Rica.....................            4  International Programs,\1\
                                               Screwworm, preclearance. 
Guatemala......................            3  Regional office, Medfly   
                                               rearing facility,        
                                               International            
                                               Programs,\1\ FMD,        
                                               technical cooperation,   
                                               trade dispute resolution,
                                               preclearance.            
Mexico.........................           29  Regional office,          
                                               Screwworm, International 
                                               Programs,\1\ Medfly,     
                                               Mexfly, Boll Weevil,     
                                               technical cooperation,   
                                               FMD diagnostic           
                                               laboratory, preclearance.
Nicaragua......................            3  Screwworm, International  
                                               Programs.\1\             
Panama.........................            1  International Programs,\1\
                                               FMD commission.          
Dominican Republic.............            1  Regional office,          
                                               International            
                                               Programs,\1\ Tropical    
                                               Bont Tick, Pest          
                                               Detection.               
Haiti..........................            1  Preclearance.             
Jamaica........................            1  Preclearance.             
Barbados.......................            1  Tropical Bont Tick.       
Bahamas........................            2  Passenger preclearance.   
Bermuda........................            1  Passenger preclearance.   
------------------------------------------------------------------------
\1\ International Programs provide leadership, management, and          
  coordination of international activities pertaining to phyto- and     
  zoosanitary measures; and technical cooperation with foreign          
  counterparts to facilitate international trade and traffic in U.S.    
  agricultural products/services.                                       
\2\ The position in Colombia is scheduled to be vacated in July 1997.   
  Currently, there are no plans to fill the position.                   
                                                                        
Note: The Honduras office closed in January 1997.                       

                      federal/non-federal dollars
    Mr. Skeen. Update the table that appears on pages 56 and 57 showing 
a breakout of all Federal and non-Federal dollars for all APHIS 
programs to include fiscal year 1997.
    [The information follows:]

                              APHIS BUDGET                              
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                     FY 1996               FY 1997      
                             -------------------------------------------
          Line-item                         Non-                  Non-  
                                Fedeal    Federal    Federal    Federal 
------------------------------------------------------------------------
Pest & disease exclusion:                                               
    AQI:                                                                
        Appropriated........    $24,838       $406    $26,547       $406
        User fees...........    118,478        630     98,000        630
    Cattle ticks............      4,932      1,802      4,537      2,000
    Foot-and-mouth disease..      4,131      3,750      3,991      3,106
    Fruit fly exclusion and                                             
     detection..............     16,263      5,300     21,161      7,857
    Sanitary/Phytosanitary                                              
     standards..............                                            
    Import-Export:                                                      
     Appropriated...........      7,861  .........      6,847  .........
    International programs..      5,775  .........      6,643  .........
    Screwworm...............     30,394      4,642     31,713      4,292
    Tropical bont tick......        453  .........        452  .........
                             -------------------------------------------
      Subtotal, pest and                                                
       disease exclusion....    213,125     16,270    199,891     17,865
Plant animal health                                                     
 monitoring:                                                            
    Animal health monitoring                                            
     & surveillance.........     58,254    106,341     60,831    107,000
    Animal & plan reg.                                                  
     enforcement............      5,892  .........      5,855  .........
    Pest detection..........      4,189     61,619      4,202     76,141
                             -------------------------------------------
      Subtotal, plant and                                               
       animal health                                                    
       monitoring...........     68,335    169,586     70,888    186,375
Pest & disease management:                                              
    Animal damage control--                                             
     operations.............     26,765     23,927     26,967     23,904
    Aquaculture.............        483        394        571        414
    Biocontrol..............      6,286      1,043      6,290      3,366
    Boll weevil.............     17,046     69,300     16,209     99,300
    Brucellosis eradication.     23,618     79,174     21,661     80,000
    Golden nematode.........        419      4,634        444      4,728
    Gypsy moth..............      4,351      3,086      4,367      3,086
    Imported fire ant.......        963      1,206      1,000      1,206
    Miscellaneous plant                                                 
     pests & dis............      1,542      7,233      1,516      7,233
    Noxious weeds...........        358      3,195        404      3,195
    Pink bollworm...........      1,034      6,772      1,069      6,772
    Pseudorabies............      4,345     12,920      4,518     13,000
    Scrapie.................      2,384      1,282      2,967      1,500
    Silver leaf whitefly....      2,323        450      1,888        458
    Tuberculosis............      4,434      7,935      4,948      8,000
    Witchweed...............      1,701        273      1,662        273
                             -------------------------------------------
      Subtotal, pest and                                                
       disease management...     98,052    224,785     94,819    259,319
Animal care:                                                            
    Animal welfare..........      9,353  .........      9,185  .........
    Horse protection........        413  .........        360  .........
                             -------------------------------------------
      Subtotal, animal care.      9,766  .........      9,545  .........
Scientific and technical                                                
 services:                                                              
    ADC methods development.      9,716      1,223     10,591      1,223
    Biotechnology/                                                      
     environmental                                                      
     protection.............      7,563        190      8,132        190
    Integrated systems                                                  
     acquisition project....        825  .........      4,000  .........
    Plant methods and                                                   
     biological control                                                 
     laboratories...........      5,067  .........      5,048  .........
    Veterinary biologics....     10,520  .........     10,360  .........
    Veterinary diagnostics..     15,078  .........     15,473  .........
                             -------------------------------------------
    Subtotal, Scientific and                                            
     Technical Services.....     48,769      1,413     53,604      1,413
    Contingency fund........      5,444        116      4,500  .........
    CCC transfers...........     33,502  .........     47,171      2,568
    Grasshopper no-year.....      1,313        550      2,236        550
    AQI User Fee Reserve....  .........  .........     36,108  .........
    Advances and                                                        
     Reimbursements;                                                    
        Federal.............      8,779  .........      7,838  .........
        Non-Federal.........  .........     39,001  .........     41,706
    Trust Funds.............      7,966  .........      6,998  .........
                             -------------------------------------------
      Total, available or                                               
       estimate.............    495,051    412,720    533,598    468,090
------------------------------------------------------------------------

                             pink bollworm
    Mr. Skeen. The pink bollworm demonstration project in the Imperial/
Coachella Valley has been continued to determine the effectiveness of 
sterile moth releases. Fiscal year 1996 was the second year of this 
three year project. What are the preliminary results of this project?
    Response. Through the project, we have learned that releasing a 
sufficient amount of sterile moths effectively suppresses native moths 
and virtually eliminates pink bollworm damage without the use of 
pesticides. However, when native moth populations are extraordinarily 
high, the use of sterile moths is not feasible. When a suitable sterile 
moth to native mothratio could not be maintained, we used other non-
pesticidal techniques, such as pheromone release and cultural control 
methods. Another approach that proved successful in the demonstration 
project involved the use of genetically-engineered cotton, which 
contains a toxin that kills pink bollworm and other moth pests when 
they eat cotton. We plan to integrate our successes from this 
demonstration project into our regular program operations.
    Mr. Skeen. Please update the table that appears on page 58 of last 
year's hearing record showing the amount of funds provided by cotton 
producers to operate pink bollworm facility, to include fiscal year 
1996.
    [The information follows:]

Producer contributions to operate the pink bollworm rearing facility

                        [In thousands of dollars]

        Fiscal year                                        Contributions
1992..........................................................    $1,472
1993..........................................................     1,833
1994..........................................................     1,980
1995..........................................................     2,150
1996..........................................................     2,300

    Mr. Skeen. What is the status of the risk assessment being 
conducted in cooperation with Cotton, Inc. to determine if the pink 
bollworm reached its economic range?
    Response. In the next few months, we will enter into a cooperative 
agreement with the University of Minnesota to conduct this risk 
assessment.
    The assessment will begin soon and will conclude in late FY 1998. 
APHIS will provide $50,000 in each of the 2 years to complete the 
assessment. In addition to our contribution, Cotton, Inc., will 
contribute up to $15,000. We expect the final report to be completed by 
early FY 1999.
                            contingency fund
    Mr. Skeen. What is the current status of the APHIS Contingency 
Fund?
    [The information follows:]

1996 Carryover..........................................      $3,109,270
1997 Appropriation......................................       4,500,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Available...................................      $7,609,270
FY 1997 Approved Releases:
    Asian Gypsy Moth/European Gypsy Moth................     (1,557,543)
    Asian Long-Horned Beetle............................       (694,000)
    Bovine Spongiform Encephalopathy....................       (100,778)
    Citrus Canker.......................................     (2,900,000)
    Pine Shoot Beetle...................................       (336,056)
    TB in Cervidae......................................       (400,000)
                    --------------------------------------------------------
                    ____________________________________________________
    Balance Available...................................      $1,620,893

    Mr. Skeen. Please update the table that appears on page 74 of last 
year's hearing record, listing all funding expenditures from the 
Contingency Fund, to include fiscal year 1996 actuals and fiscal year 
1997 estimates.
    [The information follows:]

                            CONTINGENCY FUND                            
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                                              FY 1997   
                 Program                  FY 1996 actual     estimated  
                                            obligations     obligations 
------------------------------------------------------------------------
Asian gypsy moth/European gypsy moth....          $2,045          $1,558
Asian long-horned beetle................  ..............             694
Bovine spongiform encephalopathy........             151             101
Citrus Canker...........................           1,616           2,900
Mexican fruit fly.......................             761  ..............
Pine shoot beetle.......................             269             336
Summer Olympics (1996)..................             429  ..............
TB in Cervidae..........................              54             400
Vesicular stomatitis....................             134  ..............
                                         -------------------------------
  Total.................................           5,459           5,989
------------------------------------------------------------------------

                         animal import centers
    Mr. Skeen. Please update the table that appears on page 75 of last 
year's hearing volume which shows the number of days occupied and the 
operating costs and revenues collected for each of the Animal Import 
Centers to include fiscal year 1996.
    [The information follows:]

                                       NUMBER OF DAYS OCCUPIED--FY 1992-96                                      
----------------------------------------------------------------------------------------------------------------
                                AIC                                    1992     1993     1994     1995     1996 
----------------------------------------------------------------------------------------------------------------
Newburg............................................................      366      365      365      365      365
Miami..............................................................      366      365      365      365      365
Hawaii.............................................................      366      365      365      365      365
Harry S Truman.....................................................      180      112       90      178      135
      Total........................................................    1,278    1,207    1,185    1,273    1,230
----------------------------------------------------------------------------------------------------------------

    Annual operating costs and the revenue over the last 5 years for 
each AIC are shown in the following table:

                                                       AIC OPERATING COSTS AND REVENUE FY 1992-96                                                       
                                                                         [$000]                                                                         
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     FY 1992           FY 1993           FY 1994           FY 1995           FY 1996    
                             Site                              -----------------------------------------------------------------------------------------
                                                                  Cost   Revenue    Cost   Revenue    Cost   Revenue    Cost   Revenue    Cost   Revenue
--------------------------------------------------------------------------------------------------------------------------------------------------------
Newburg.......................................................    1,409    1,673    1,643    1,819    1,618    2,047    1,608    1,601    1,502    1,768
Miami.........................................................      816      326      882      628    1,052      966      962      578    1,113      716
Hawaii........................................................      160       53      192      280      317      342      283      159      247       20
Truman........................................................    1,073      753    1,403    1,203    1,328      983    1,826    1,582    1,361    1,229
                                                               -----------------------------------------------------------------------------------------
      TOTAL...................................................    3,458    2,805    4,120    3,830    4,315    4,338    4,679    3,920    4,223    3,733
--------------------------------------------------------------------------------------------------------------------------------------------------------

                          silverleaf whitefly
    Mr. Skeen. What is the status of sweet potato whitefly activities 
during fiscal year 1997?
    Response. Our response to the silverleaf whitefly--SLW--has been 
guided by a 5-year National Research and Action Plan for Development of 
management and Control Methodology. This plan concluded in January 
1997, and is providing a firm base for the development of efficient 
long-term strategies for managing SLW populations. During the 5 years 
of the Action Plan, we have screened over 240 worldwide collections of 
SLW biological control agents and processed them through quarantine. As 
a result of this screening process, we have found 6 to 10 biological 
control agents in the last 3 years that show the best potential for 
managing the SLW. Also in FY 1997, we are developing strategies for 
improved mass propagation of exotic parasites and improved rearing and 
release technologies by releasing parasites in a 10-acre demonstration 
plot. In addition, we are continuing to make great strides in the areas 
of biocontrol, integrated pest management techniques, and fundamental 
research, morphology, behavior, biotypes, and vector interactions 
regarding SLW.
    Mr. Skeen. What is the status of turning the strategy of releasing 
sweet potato whitefly natural enemies in the greenhouse over to the 
public sector?
    Response. In FY 1996, we released SLW natural enemies in 
greenhouses in northeastern States, primarily Connecticut. In this 
project, we demonstrated that using biological control techniques 
against SLW in greenhouses is a very effective management strategy. We 
had particular success using the Nile Delta strain of Encarsia formosa 
as a SLW parasitoid on tomatoes and poinsettias in New Hampshire and 
Connecticut. To begin transferring this effective strategy to industry, 
we have begun negotiating with a company in Colorado that supplies 
biological agents to growers to establish a Cooperative Research and 
Development Agreement. Through this agreement, we plan to transfer 
technology and material so the company can produce natural enemies and 
make them available to their greenhouse customers. We will be able to 
transfer most of this technology in FY 1997, with the remainder being 
transferred in FY 1998.
             import/export/veterinary diagnostic user fees
    Mr. Skeen. Provide a five year table that shows the projected 
revenue for import/export user fees and the projected revenue for 
veterinary diagnostic user fees including fiscal year 1997 estimates.
    [The information follows:]

                                 VETERINARY SERVICES ESTIMATED USER FEE REVENUE                                 
                                             [Dollars in thousands]                                             
----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal year--               
                                                                    --------------------------------------------
                                                                       1997     1998     1999     2000     2001 
----------------------------------------------------------------------------------------------------------------
Import/export user fees............................................   10,036   10,036   10,036   10,036   10,036
----------------------------------------------------------------------------------------------------------------

                    import/export inspection program
    Mr. Skeen. Please update the tables that appear on page 80 of last 
year's hearing record showing both the appropriated and reimbursed 
activities and expenses of the import/export inspection program to 
include fiscal year 1996 actualities and fiscal year 1997 estimates.
    [The information follows:]

           IMPORT-EXPORT APPROPRIATED ACTIVITIES AND EXPENSES           
                         [Dollars in thousands]                         
------------------------------------------------------------------------
                                                  FY 1996      FY 1997  
             Appropriated activity                expenses     expenses 
                                                   (act.)       (est.)  
------------------------------------------------------------------------
Inspection of military installations..........          160          140
Development of new agricultural markets.......          315          290
International Trade Support...................          633          550
Non-regulatory, Agency-initiated inspections..          628          530
Smuggled bird disease status and quarantine                             
 determinations...............................          157          135
Monitoring disease status of foreign countries          175          145
Education on scientific advances related to                             
 animal health................................          145          135
Stray Animal Retrieval........................          150          130
State and regional support....................        1,800        1,575
Export: endorse health certificates, service                            
 farms of origin for export shipments, inspect                          
 embryo transfer facilities, inspect animals,                           
 etc..........................................          874  ...........
National Center for Import and Export--NCIE...        2,472        2,807
Commercial Bird Activities....................          220          210
Maintain Truman animal import center during                             
 downtime.....................................          132          200
                                               -------------------------
      Total, appropriated.....................        7,861        6,847
------------------------------------------------------------------------
Note 1. Export user fees implemented for these activities in June 1996. 
Note 2. The National Center for Import and Export--NCIE--operations     
  consists primarily of providing information, advising, and consulting 
  with industry groups, the public, and other governments; conducting   
  risk assessments; certifying export products; and developing and      
  implementing standards, regulations, and policies. This work prevents 
  animal disease introduction from imported animals or animal products  
  and ensures that animals offered by the United States for export meet 
  criteria of the importing country.                                    

    Mr. Skeen. Also update the table that appears on page 81 of last 
year's hearing record, showing the expenses related to the program, to 
include fiscal year 1996 actualities and fiscal year 1997 estimates.
    [The information follows:]

             Foreign Affairs Administrative Support Services

                                                                  Amount
Fiscal year:
    1991................................................        $675,179
    1992................................................         802,080
    1993................................................       1,031,600
    1994................................................       1,079,446
    1995................................................       1,086,617
    1996................................................       1,023,810
    1997 (est.) \1\.....................................       1,025,000

\1\ In FY 1997, the Department of State began to transition from the 
outdated Foreign Affairs Administrative Support Services--FAASS--to the 
new International Cooperative Administrative Support System--ICASS. The 
ICASS system will be fully implemented in FY 1998.
---------------------------------------------------------------------------
                             biotechnology
    Mr. Skeen. Please update the staffing and funding for biotechnology 
table that appears on page 83 of last year's hearing record.
    [The information follows:]

                                     STAFFING AND FUNDING FOR BIOTECHNOLOGY                                     
                                             [Dollars in thousands]                                             
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year----              
                                                                    --------------------------------------------
                                                                       1993     1994     1995     1996     1997 
----------------------------------------------------------------------------------------------------------------
Funding............................................................    4,571    4,829    4,738    4,452    5,114
Staff years........................................................       59       58       56       57       71
----------------------------------------------------------------------------------------------------------------
Note: The environmental component and the National Monitoring and Residue Analysis Laboratory reimbursable of   
  the Biotechnology and Environmental Protection line-item have not been included in this table. Beginning in FY
  1997, this table includes funding for the Pesticide Data Program, formerly funded by the Agriculture Marketing
  Service.                                                                                                      

                             plant methods
    Mr. Skeen. Update the table that appears on page 84 of last year's 
hearing record, showing the amount spent by location on plant methods 
development activities, to include fiscal year 1996 actuals and fiscal 
year 1997 estimates.
    Response. The following table shows funding for all APHIS plant 
methods development activities, not just those funded by the Plant 
Methods Development Laboratories line item:

----------------------------------------------------------------------------------------------------------------
                     Center                        FY 1993      FY 1994      FY 1995      FY 1996      FY 1997  
----------------------------------------------------------------------------------------------------------------
Hoboken, NJ....................................     $568,035     $551,457     $349,555            0            0
Mission, TX....................................      696,951      603,430      598,757     $455,152     $502,953
Gainesville, FL \1\............................      180,103      184,097      206,322      249,196      167,289
Guatemala City \1\.............................      190,195      181,697      201,015      227,576      211,827
State College, MS \1\..........................      111,611       69,800       61,363      126,142      120,423
Waimanalo, HI \1\..............................      120,154      209,165      235,606      469,944      432,344
Otis Air Base, MA \2\..........................    1,131,493    1,201,933    1,371,022    1,474,692    1,648,991
Phoenix, AZ \3\................................      805,593      820,805      893,514    1,092,157    1,042,614
Brawley, CA \1\................................      250,000      239,075      232,011      176,772      162,240
Whiteville, NC \4\.............................      438,054      390,638      357,152  ...........  ...........
Dillon, SC \1\ \4\.............................      214,816      192,424      175,885  ...........  ...........
Oxford, NC \4\.................................  ...........  ...........  ...........      942,453      894,510
Gulfport, MS \5\...............................      310,084      554,702      573,445      613,317      585,512
Beltsville, MD \1\.............................  ...........  ...........      137,536      182,061      173,807
                                                ----------------------------------------------------------------
      Total....................................    5,017,089    5,199,223    5,393,183    6,009,432    5,942,510
----------------------------------------------------------------------------------------------------------------
\1\ Denotes satellite locations or substations.                                                                 
\2\ This row includes funding from the Miscellaneous Plant Pests and Diseases line item in FY 1997 for Japanese 
  beetle activities.                                                                                            
\3\ This row includes funds from the grasshopper (through FY 1995) and SLW line items. The row showing          
  ``Brawley, California'' includes funding from the SLW line item.                                              
\4\ In FY 1996, the activities formerly conducted at Whiteville and Dillon were transferred to Oxford and funded
  from the AQI User Fees line item.                                                                             
\5\ This row includes funding from the IFA line item.                                                           

                         centers of excellence
    Mr. Skeen. Update the table that appears on page 366 of last year's 
hearing record showing the amount provided to each Center of 
Excellence, by agency, for each fiscal year that funding has been 
provided. Also include the amount provided by the university and any 
private entity.
    [The information follows:]

----------------------------------------------------------------------------------------------------------------
                                                                                                        Amount  
               Fiscal year                     Center of Excellence                Agency            (estimated)
----------------------------------------------------------------------------------------------------------------
1994.....................................  Lincoln University.........  APHIS......................     $117,000
1995.....................................  Arkansas-Pine Bluff........  APHIS......................       45,000
                                           ...........................  GIPSA......................        4,000
1995.....................................  Lincoln University.........  APHIS......................      117,000
                                           ...........................  NRCS.......................      225,000
                                           ...........................  FS.........................      225,000
                                           ...........................  FSA........................       50,000
1996.....................................  Arkansas-Pine Bluff........  APHIS......................       33,000
                                           ...........................  GIPSA......................       11,000
1996.....................................  Lincoln University.........  APHIS......................      148,000
                                           ...........................  NRCS.......................      250,000
                                           ...........................  FS.........................      200,000
                                           ...........................  FSA........................       55,000
1997.....................................  Arkansas-Pine Bluff........  APHIS......................       33,000
                                           ...........................  GIPSA......................       11,000
1997.....................................  Lincoln University.........  APHIS......................      148,000
                                           ...........................  NRCS.......................      250,000
                                           ...........................  FS.........................      200,000
                                           ...........................  FSA........................       60,000
1997.....................................  Tuskeegee University.......  APHIS......................       56,000
----------------------------------------------------------------------------------------------------------------

                         international programs
    Mr. Skeen. Update the table that appears on page 85 of last year's 
hearing record showing how much you spent in foreign countries to 
include fiscal year 1996 actuals and 1997 estimates.
    [The information follows:]

                                       APHIS SPENDING BY COUNTRY 1995-1997                                      
----------------------------------------------------------------------------------------------------------------
                        Country                                 1995               1996           1997 (est.)   
----------------------------------------------------------------------------------------------------------------
Asia/Pacific...........................................         $1,115,436         $1,066,841         $1,315,702
Brazil.................................................  .................             93,303            135,493
Caribbbean.............................................            988,884          1,076,133          1,092,321
Central America........................................          6,816,091         10,521,153         10,180,358
Chile..................................................            302,993            297,939            424,254
Colombia...............................................          1,771,285          1,819,591          1,797,736
Dominican Republic.....................................            238,947            260,147            302,313
Europe/Africa..........................................          1,609,183          1,527,418          2,077,764
Guatemala..............................................          3,996,132          4,139,670          4,419,163
Mexico.................................................         26,328,441         20,192,331         22,109,675
Panama.................................................            748,803          1,106,170          1,162,930
Peru...................................................  .................            280,376            243,862
Surinam................................................            204,933            249,000            150,000
Venezuela..............................................             97,553  .................  .................
                                                        --------------------------------------------------------
      Total............................................         44,218,681         42,630,072         45,411,571
----------------------------------------------------------------------------------------------------------------

                       history of budget request
    Mr. Skeen. Provide a complete breakout of your budget request to 
the Office of the Secretary, the Secretary's request to the Office of 
Management and Budget (OMB), and the OMB allowance?
    [The information follows:]

                                                                        
------------------------------------------------------------------------
                                              Fiscal year 1998          
                                  --------------------------------------
            Line item                 Agency       Dept.         OMB    
                                     request      passback    allowance 
------------------------------------------------------------------------
Pest and disease exclusion:                                             
    AQI user fees................     $100,000     $100,000     $100,000
    AQI appropriated.............       27,979       27,814       27,814
    Cattle ticks.................        4,537        4,427        4,427
    Foot and mouth disease.......        3,991        3,803        3,803
    Fruit fly exclusion and                                             
     detection...................       22,373       20,970       20,970
    Import/export trade..........        7,873        6,815        6,815
    International programs.......        8,756        6,630        6,630
    Screwworm....................       31,713       31,335       31,335
    Tropical Bont Tick...........          535          444          444
                                  --------------------------------------
      Total, pest & dis.                                                
       exclusion.................      207,757      202,238      202,238
                                  ======================================
Plant and animal monitoring:                                            
    Animal health mon. &                                                
     surveillance................       64,040       60,564       60,564
    Animal health reg.                                                  
     enforcement.................        5,855        5,722        5,722
                                  --------------------------------------
      Total, plant & animal                                             
       monitoring................       82,220       75,018       75,018
                                  ======================================
Pest and disease management:                                            
    ADC operations...............       27,975       25,763       23,713
    Aquculture...................          913          567          567
    Biocontrol...................        6,842        6,275        6,275
    Boll Weevil..................        8,427        8,279        6,376
    Brucellosis..................       20,124       19,818       19,818
    Golden Nematode..............          444          435          435
    Grasshopper/Mormon Cricket...        2,659            0            0
    Gypsy Moth...................        5,642        4,366        4,366
    Misc. plant pests & diseases.        3,613        1,533        1,533
    Noxious Weeds................        2,170          406          406
    Pink Bollworm................        1,463        1,048        1,048
    Pseudorabies.................        4,971        4,481        4,481
    Scrapie......................        2,161        2,931        2,931
    Sweet Potato Whitefly........        1,753        1,877        1,877
    Tuberculosis.................        5,551        4,920        4,920
    Witchweed....................        1,662        1,638        1,638
                                  --------------------------------------
      Total, pest & disease                                             
       management................       96,370       84,337       80,384
                                  ======================================
Animal care:                                                            
    Animal welfare...............       10,416        9,175        9,175
    Horse protection.............          360          353          353
    Humane transp/slaughter of                                          
     horses......................          411            0            0
                                  --------------------------------------
      Total, animal care.........       11,187        9,528        9,528
                                  ======================================
Scientific and tech. services:                                          
    ADC methods development......       11,121        9,672        9,672
    Biotechnology/environmental                                         
     prot........................        7,870        8,139        8,139
    ISAP.........................        4,000        3,951        4,000
    Plant methods biocontrol labs        6,509        5,102        5,102
    Veterinary biologics.........       11,430       10,345       10,345
    Veterinary diagnostics.......       17,851       15,921       15,622
                                  --------------------------------------
      Total, scientific & tech.                                         
       services..................       58,781       53,130       52,880
                                  ======================================
    Contingency fund.............        5,000        4,443        4,443
    New user fees................            0       -7,503       -9,551
                                  --------------------------------------
      Total, S&E.................      464,946      421,191      414,940
                                  ======================================
    Buildings and facilities.....       47,788        7,200        7,200
                                  --------------------------------------
      Total, APHIS...............      512,734      428,391      422,140
------------------------------------------------------------------------

                             gao/oig audits
    Mr. Skeen. Briefly describe the findings and recommendations and 
actions taken on each GAO and OIG audit listed in the explanatory 
notes.
    [The information follows:]
                              gao reports
#RCED-96-3, 10/30/95, ADC Program: Efforts to Protect Livestock from 
        Predators
    Findings: (1) Written program policies call for field personnel to 
give preference to nonlethal control methods when practical and 
effective; (2) APHIS officials indicated that nonlethal methods are 
more appropriately used by livestock operators, have limited 
effectiveness, and are not practical for field personnel use.
    Recommendations: (1) Recommend that the Administrator of APHIS 
revise the Animal Damage Control program's written guidance to specify 
the role and use of nonlethal methods in controlling livestock 
predators.
    Actions: We are reviewing the recommendations made in the report. 
Wewill provide the Committee with actions taken on each GAO and OIG 
audit listed in the Explanatory Notes that relate specifically to APHIS 
when those actions are determined.
#T-NSAID-96-85, 1/25/96, Travel of Government Officials on Government 
        Aircraft
    This report cited in the Explanatory Notes was inadvertently listed 
as a GAO report. It was testimony presented to the House Subcommittee 
on Government Management, Information, and Technology by the Director 
of Military Operations and Capabilities Issues, National Security and 
International Affairs Division of GAO.
#RCED-986-182-R, 6/7/95, Analysis of USDA Budgets, Fiscal Year 1996 and 
        1997
    Findings: (1) Identified approximately $1.35 billion in potential 
rescissions to USDA's FY 1996 appropriation, and $2.7 billion in 
potential reductions to USDA's budget request for FY 1997
    Recommendations: No recommendations were made.
                              oig reports
#33601-0001-CH, 6/28/96, Licensing of Animal Exhibitors
    Findings: (1) Individuals use APHIS exhibitor licenses to keep 
exotic pets and circumvent State and local laws; (2) Individuals use 
APHIS licenses to circumvent State and local laws; (3) APHIS could 
conserve Agency resources and eliminate duplication of efforts through 
closer coordination with State agencies; (4) Regulations allow 
unqualified individuals to obtain a license with no limits on animals; 
(5) APHIS has no control over the number or species of animals 
maintained by a licensed exhibitor.
    Recommendations: (1) Amend the regulatory definition of an 
exhibitor to exclude those individuals who are pet owners rather than 
true exhibitors; (2a) Deny licenses to applicants whose possession of 
wild or exotic animals would violate State or local laws; (2b) 
Establish policy and procedures requiring APHIS, prior to approving an 
application for license, to submit written notification to the 
applicable State authorities; (3) Develop and enter into cooperative 
agreements with appropriate State agencies to eliminate duplication of 
efforts at both levels; (4a) Develop standards which applicants for 
APHIS Class ``C'' licenses must meet before licenses are issued, 
addressing the applicants' level of knowledge and experience in 
handling such animals; (4b) Strengthen the regulations requiring all 
individuals applying for or renewing a license to complete a package 
including documentation; (5) Strengthen the regulations to restrict the 
number and type of species a licensee may exhibit, by developing sub-
classes of the Class ``C'' license to cover specific categories of 
animals that require special knowledge, care, and handling.
    Actions: We are reviewing the recommendations made in the report. 
We will provide the Committee with actions taken on each GAO and OIG 
audit listed in the Explanatory Notes that relate specifically to APHIS 
when those actions are determined.
#33099-0001-CH, 11/15/96, APHIS' Controls over Cooperative Agreements
    Findings: (1) APHIS oversight of cooperative agreements could be 
strengthened; (2) APHIS agreement database does not contain current 
information; (3) Completed agreements need to be timely closed.
    Recommendations: (1a) Require the cited cooperators to reimburse 
APHIS for the $84,009 in unsupported and duplicate costs; (1b) 
Establish procedures requiring the Authorized Departmental Officer's 
Designated Representative--ADODR--to check supporting documentation for 
expenses prior to approving cooperators' claims; (1c) Establish 
procedures through which the Resource Management Systems and Evaluation 
Staff can evaluate compliance with its recommendations and report 
instances of disagreement or inadequate corrective actions to officials 
having the authority to resolve recommendations; (2) Issue procedures 
requiring regional offices to timely enter all agreements and 
modification into the Agreement Tracking System; (3a) Institute 
procedures to require that ADODRs ensure the timely submission of the 
cooperators' final SF-269 financial status reports; (3b) Ensure that 
agreement closeout information is timely entered into the Agreement 
Tracking System; (3c) Initiate actions to deobligate the cited 
$1,356,068 in outstanding agreement funds.
    Actions: We are reviewing the recommendations made in the report. 
We will provide the Committee with actions taken on each GAO and OIG 
audit listed in the Explanatory Notes that relate specifically to APHIS 
when those actions are determined.
#330002-01-HY, 6/6/96, ADC's Management of Hazardous Materials
    Findings: (1) ADC's regulations did not include procedures for 
storing explosive components; (2) Storage facilities were not in 
compliance with standards; (3) Safety inspection data was not submitted 
to APHIS headquarters; (4) Personal protective equipment assessment not 
documented; (5) A written hazard communication program had not been 
established; (6) Three-year self-evaluations were not conducted; (7) 
Lockout/tagout program not implemented; (8) Permit system needed for 
confined spaces; (9) Management Information Systems Data on explosives 
was not accurate; (10) Explosives inventory records were not accurate.
    Recommendations: (1) Include in ADC's policy manuals and directives 
the requirement for compliance with OSHA safety and hazardous material 
regulations; (2a) Direct the ADC facilities visited during the audit to 
correct the cited conditions that were not in compliance with OSHA 
requirements; (2b) Conduct a follow up inspection to ensure the cited 
conditions have been corrected; (2c) Determine the feasibility of 
repairing the Brandon, MS, storage facility to comply with OSHA 
regulations, or relocate explosive components to another facility; (2d) 
Reduce the inventory of ammonium nitrate and maintain at the 
Rhinelander facility to a quantity below 1,000 pounds, or relocate it 
to another facility; (3a) develop an inspection checklist to include a 
review of procedures used for handling explosives as required by OSHA 
regulations; (3b) Conduct safety inspections at least annually at each 
ADC facility, and ensure that the reports are timely submitted to APHIS 
headquarters for appropriate action; (4a) Develop appropriate 
documentation for the conduct of workplace hazard assessments to 
include requirements outlined in OSH regulations; (4b) Establish 
controls to ensure that workplace hazard assessments are timely 
performed; (5) Develop and implement a comprehensive Hazard 
Communication Program and ensure employees are properly trained; (6a) 
Develop a self-evaluation program and report the results to a 
designated safety and health official and to APHIS' National Safety and 
Health Council; (6b) Utilize the results of the self-evaluations to 
determine if the safety and health program is effective and/or whether 
improvements are needed; (7a) Develop, document, and implement a 
lockout/tagout program to provide increased safety measures for 
employees who service equipment; (7b) Provide training to employees on 
the use of lockout/tagout procedures; (8a) Develop procedures and 
monitoring devices for a permit system that regulates the safety of 
employees entering confined spaces; (8b) Provide training to employees 
in the use of permit systems to enhance the safe performance of their 
duties; (9a) Develop and implement procedures to ensure that a physical 
inventory is performed when explosives are stored, moved, or 
discontinued; (9b) Conduct an inventory of explosives at least 
annually, and document the results on the Explosives Inventory Record--
EIR; (9c) Establish procedures to ensure the accuracy of inventory 
forms andrecords, i.e., second-party reviews; (9d) Implement a 
procedure requiring periodic reconciliation between information on Site 
Blasting Records and MIS; (10) Determine whether the current EIR needs 
to be revised to facilitate accounting for explosives.
#50018-2-HY, 2/12/96, Puerto Rico Department of Agriculture
    Findings: (1) The SR-334 Minority Business Enterprise/Women 
Business Enterprise Utilization Report was not prepared by the 
department for the Pesticide Consolidation Program--PCP; (2) The 
department does not submit on a timely basis to the Veterinary Services 
field office the quarterly financial status report for the PCP; (3) 
there is no evidence that all the supporting documents of federal 
financial assistance prepared by the department for disbursements were 
verified before payment for PCP; (4) the copy of one supporting 
document prepared by the department does not contain the signature of 
the Finance Director and other authorized officials.
    Recommendations: (1) Implementation of an internal control 
procedure requiring the submission of such report to the EPA Grants 
Officer within 30 days of the end of the federal fiscal quarter; (2) 
the implementation of internal control procedures in order to assure 
compliance with reports deadlines, and to assign an official of the 
department to comply with this requirement; (3) a pre-intervention 
stamp should be placed in front of supporting documents of 
transactions, including the pre-intervention director signature and 
date of preparation, in order for the copies to show the stamp; include 
the signature of the Finance Director and other authorized officials on 
every copy of the official documents prepared by the department.
    Actions: We are reviewing the recommendations made in the report. 
We will provide the Committee with actions taken on each GAO and OIG 
audit listed in the Explanatory Notes that relate specifically to APHIS 
when those actions are determined.
                           brown citrus aphid
    Mr. Skeen. What is the status of the brown citrus aphid and what is 
your plan to control this pest?
    Response. The brown citrus aphid--BCA--is an important citrus pest 
both because of its feeding damage on citrus trees and because it is 
the most efficient vector of citrus tristeza virus--CTV, a serious 
citrus disease. In recent years, BCA has been found to be established 
in Puerto Rico, the U.S. Virgin Islands, the Dominican Republic, and 
Haiti. In November 1995, we detected it in Fort Lauderdale, Florida, 
and it has since spread to commercial groves in southern Florida. As a 
result, the groves that use sour orange rootstock--approximately 20 
percent of all citrus in Florida--are now susceptible to CTV. In the 
fall of 1996, BCA was discovered in Belize. This discovery has 
heightened our concern along the Mexican border and has prompted us to 
increase our surveillance activities there.
    To control the spread of BCA within the United States, APHIS has 
established guidelines for States to use in developing action plans to 
control this pest. Florida has already developed such a plan and 
Florida, California, and Texas have established BCA work groups. APHIS 
is participating in these work groups and has also established a State-
Federal-industry BCA task force, which includes members of the various 
State work groups as well as officials from USDA's Agricultural 
Research Service and Cooperative State Research, Education, and 
Extension Service--CSREES. Task force members are currently discussing 
various research methods, resource availability, and regulatory and 
control options. APHIS is coordinating the group's activities and 
assisting ARS and CSREES officials in their research in biocontrol 
measures to control the pest.
    Because the BCA has already expanded to such a wide area, it is not 
amenable to eradication. The spread of this pest can only be stopped or 
slowed by environmental limitations or through the use of biological 
control techniques. To examine such techniques, we are continuing to 
work with the University of Florida on a demonstration project. Through 
this demonstration, we plan to study the BCA's seasonal dynamics, 
mortality factors, and alternate hosts. Also, we are introducing and 
evaluating exotic natural enemy species, and evaluating the impact of 
population suppression on aphid biology and virus movement. In 
addition, we are continuing cooperative project surveys in Florida and 
Texas. In Florida, the natural enemy survey is one component of a 
cooperative State and Federal survey that also includes sampling for 
BCA and citrus tristeza virus--CTV--detection. Samples for the Texas 
survey, which includes both BCA natural enemies and CTV, are being 
collected during routine visits for fruit fly traps in the Rio Grande 
valley.
    In FY 1997, we will treat a 20-acre block of citrus with four 
promising isolates of insect pathogens and evaluate their ability to 
kill or control BCA under field conditions. Also, we plan to initiate 
field efficacy studies in Florida. If the BCA becomes established in 
commercial citrus production areas in Puerto Rico, we will conduct 
field efficacy studies there also. Data has been collected on the field 
biology of BCA, and alternate host plants and laboratory cultures of 
several local natural enemies have been initiated.
    Mr. Skeen. What were the findings of the economic evaluation of the 
brown citrus aphid project?
    Response. We have arranged for an economist to conduct this 
evaluation through a cooperative agreement and work is ongoing. 
However, the project is still in its initial stages and has yet to 
yield any significant results. APHIS' role, besides funding this 
agreement, is to collect data. Through this project, we intend to 
determine the feasibility of reducing the risk posed by CTV by 
developing effective management strategies for BCA.
                 trichinae pilot certification project
    Mr. Skeen. The trichinae pilot certification project is a three 
year project scheduled to end in fiscal year 1998. Give the Committee a 
status of the project.
    Response. The initial phase of the trichinae pilot certification 
project was complete in December 1996 ahead of schedule. This phase 
involved testing waste fed swine herds in New England and Ohio to 
determine if waste feeding or some other factor posed a significant 
risk for trichinae infection. Phase I test results indicated that 
rodent infestations on the farm, rather than the type of feed, 
contributed to trichinae infection. APHIS also evaluated a new 
serological test developed by the Agricultural Research Service in 
Phase I. This new test will be used in conjunction with the traditional 
muscle digestion test as part of a herd certification process. Phase II 
of the trichinae pilot certification project is now underway in Iowa. 
In this phase APHIS veterinarians are developing ``good production 
practices'' to use in the herd certification progress. Phase III, which 
will include setting up the certification program, in scheduled to 
begin in 1998.
            bovine leukosis-free herd certification program
    Mr. Skeen. In fiscal year 1995, APHIS continued to work with 
industry and the scientific community to develop the framework for a 
voluntary bovine leukosis-free herd certification program. What is the 
status of this initiative?
    Response. In FY 1995, APHIS worked with the industry and scientific 
community to finalize a protocol for a voluntary bovine leukosis-free 
herd certification program. The protocol is available to States, 
interested in establishing their own program.
                    equine infectious anemia program
    Mr. Skeen. Also in fiscal year 1995, APHIS began facilitating the 
development of a uniform policy program for States involved in the 
equine infectious anemia program. A uniform policy program was approved 
by the U.S. Animal Health Association in fiscal year 1996. Are all 
States now using this system?
    Response. Approximately 50 percent of all States have implemented 
equine infectious anemia--EIA--control programs similar to the gold-
standard prototype outlined in the uniform policy program guide. Other 
States with EIA control programs already in place--Arkansas, Louisiana, 
Minnesota, Texas, and Wisconsin--are re-evaluating and upgrading their 
existing programs.
                    national rabies management plan
    Mr. Skeen. The national rabies management plan was supposed to be 
completed and presented in December at the Rabies in the Americas 
Conference in Atlanta, Georgia. Did this occur? Describe the plan in 
further detail for the record.
    Response. A draft plan for managing rabies in the United States was 
presented by representatives of the Centers for Disease Control and 
Prevention--CDC--to participants at the Rabies in the Americas 
Conference in Atlanta, Georgia, in December 1996. The plan compiles a 
set of recommended procedures for managing rabies under various 
settings and situations. APHIS representatives attended the meeting at 
the invitation of the CDC, and provided technical input on managing 
rabies in wildlife populations in the United States. Members of three 
rabies management working groups, which include diagnosticians and 
wildlife professionals, will review and provide comments on the plan to 
CDC. CDC indicated that the management plan will be available for 
public review later this year.
                           pine shoot beetle
    Mr. Skeen. ARS scientists in France have collected a pine shoot 
beetle predator and have been working with APHIS and the Forest Service 
to import and quarantine the predator. What is the status of this 
initiative?
    Response. The PSB predator, Thanasimus formicarius (Coleoptera: 
Cleridae), is being reared at our Plant Protection Center in Niles, 
Michigan. We also are providing these predators to the Forest Service 
for competition studies at Michigan State University. These studies 
will determine how this imported predator competes with native 
predators in attacking PSB. We are also working with cooperating 
researchers to study its biology and improve our rearing techniques 
before making field releases. Biological control applications such as 
this would be especially effective in forested areas of regulated 
States where cultural or chemical methods are not practical or cost 
effective.
    We are hopeful that this imported natural enemy for PSB will be 
more effective than natural enemies native to the U.S. The results from 
two years of pre-release surveys indicate that native natural enemies 
are not well suited to attack the PSB.
           emergency animal disease eradication organizations
    Mr. Skeen. Where are the four regional emergency animal disease 
eradication organizations that respond to foreign animal disease 
outbreaks in livestock and poultry populations located?
    Response. APHIS has combined the four Regional Emergency Animal 
Disease Eradication Organizations--READEO's--into two READEO's 
representing the Eastern and Western Regions. The READEO's are not 
located in any particular State. Rather, they consist of personnel 
throughout each region that would come together in the case of an 
animal disease emergency. Personnel assigned to READEO's have regular 
field and staff assignments throughout the United States. In the event 
of an animal disease emergency, the Eastern READEO is responsible for 
the State of Minnesota and all States east of the Mississippi and the 
Western READEO is responsible for all States west of the Mississippi 
(excluding Minnesota).
                         regulatory enforcement
    Mr. Skeen. How many animal and plant health regulatory enforcement 
violation cases are pending at the agency?
    Response. As of mid-March 1997, the number is 1,195.
                          biotechnology--nmral
    Mr. Skeen. The National Monitoring and Residue Analysis Laboratory 
performs tests of various food products for pesticide residues under 
contract with requesting agencies. Provide a list of all pesticide 
residue testing the Lab conducted, who the contracting agency was, and 
the cost of the contract for fiscal years 1995, 1996, and to date in 
1997.
    Response. In all 3 years, the National Monitoring and Residue 
Analysis Laboratory--NMRAL--contracted with the Agricultural Marketing 
Service--AMS, the Consolidated Farm Services Agency--CFSA, formerly the 
Agricultural Stabilization and Conservation Service--ASCS, and the Boll 
Weevil Foundation (Southeast and Southwest).
    In FY 1995, NMRAL contracted with AMS to analyze nine commodities 
for dichlorophenoxyacetic acid, Benomyl, and Thiabendazole--TBZ--at a 
cost of approximately $575,000. NMRAL also contracted with AMS to 
analyze soybeans for seven herbicides at a cost of $12,000. In 
addition, NMRAL contracted with CFSA to analyze tobacco for 
hydrocarbons at a cost of $86,000. The Boll Weevil Foundation paid 
NMRAL $133,000 to analyze environmental samples for insecticides used 
in our boll weevil eradication program.
    In FY 1996, NMRAL contracted with AMS to analyze peaches and grapes 
for Benomyl, TBZ, and Vendex at a cost of approximately $480,000. NMRAL 
alsocontracted with AMS to analyze soybeans for seven herbicides at a 
cost of $12,000. In addition, NMRAL contracted with CFSA to analyze 
tobacco for hydrocarbons at a cost of $8,000. The Boll Weevil 
Foundations paid NMRAL $61,000 to analyze environmental samples for 
insecticides used in our boll weevil eradication program. So far in FY 
1997, NMRAL has contracted with AMS to analyze five commodities for 
Benomyl, TBZ, and Vendex at a cost of approximately $455,000. Also 
NMRAL contracted with AMS to analyze soybeans for 11 herbicides at a 
cost of $12,000. The Boll Weevil Foundation paid NMRAL $11,000 to 
analyze environmental samples for insecticides used in our boll weevil 
eradication program.
                           non-federal funds
    Mr. Skeen. Provide a breakout of the other agriculture 
appropriations and other non-Federal funds for fiscal years 1996, 1997, 
and 1998.
    [The information follows:]

------------------------------------------------------------------------
                                    1996          1997          1998    
------------------------------------------------------------------------
Obligations under other USDA                                            
 appropriations:                                                        
    Agricultural Marketing                                              
     Service:                                                           
        For administrative                                              
         support..............    $5,285,593    $5,786,000    $5,768,000
        For technical support.       482,850             0             0
    Agricultural Research                                               
     Service: for                                                       
     administrative support...        74,953        50,000        50,000
    Food Safety and Inspection                                          
     Service: for technical                                             
     assistance...............       620,216        12,000        12,000
    Foreign Agricultural                                                
     Service:                                                           
        For technical support.       142,497         8,000         8,000
        For employee services                                           
         training.............        10,403         8,000         8,000
    Forest Service: for                                                 
     technical support........       309,585       200,000       200,000
    Grain, Inspection, and                                              
     Packers and Stockyards                                             
     Administration: for                                                
     administrative support...     1,405,841     1,406,000     1,406,000
    National Agricultural                                               
     Statistics Service: for                                            
     administrative support...           557             0             0
    Natural Resources                                                   
     Conservation Service:                                              
        For administrative                                              
         support..............        33,000        33,000        33,000
        For residue testing...         7,158             0             0
    Office of the Secretary:                                            
        Support of the FISVIS                                           
         initiative...........       166,753        66,000             0
        Support of the MAPS                                             
         initiative...........       141,086       150,000       150,000
    Support of the Service                                              
     Center Implementation                                              
     Team.....................        19,938        56,000  ............
                               -----------------------------------------
      Total, Other Agriculture                                          
       Appropriations.........     8,700,430     7,757,000     7,635,000
                               =========================================
Non-Federal Funds:                                                      
    AQI receipts (greater than                                          
     $100 million.............  ............    13,079,566  \1\ 41,000,0
                                                                      00
    Funds from States and                                               
     local entities from                                                
     animal damage control                                              
     activities...............    11,174,907    11,733,652    12,320,335
    Illegally imported birds..        91,281        80,000        80,000
    Import-Export user fees...     9,077,644    10,036,000    10,036,000
    Phytosanitary certificate                                           
     user fees................     3,570,050     4,600,258     4,692,263
    Reimbursable overtime.....    12,248,358    12,655,722    13,113,950
    Truman Animal Import                                                
     Center...................     1,229,389     1,100,000     1,000,000
    Veterinary diagnostic user                                          
     fees.....................     1,630,032     1,500,000     1,500,000
    Miscellaneous contributed                                           
     funds....................     7,965,742     6,998,000     6,998,000
                               -----------------------------------------
      Total, Non-Federal Funds    46,987,403    61,783,198    90,940,548
------------------------------------------------------------------------
\1\ Funds up to $100 million of receipts are included in discretionary  
  appropriations.                                                       

             pay cost increases/employment cost reductions
    Mr. Skeen. Provide a breakout, by line item, of pay costs increases 
and employment cost reductions proposed in 1998.
    [The information follows:]

------------------------------------------------------------------------
                                         Pay cost       Employment cost 
             Line item                  increases          reductions   
------------------------------------------------------------------------
Pest and Disease Exclusion:                                             
    AQI User Fees.................               $446            -$1,219
    AQI Appropriated..............                396               -289
    Cattle Ticks..................                 63               -173
    Foot and Mouth Disease........                  3               -191
    Fruit Fly Exclusion and                                             
     Detection....................                129               -320
    Import/Export Trade...........                 55                -87
    International Programs........                 30                -43
    Screwworm.....................                 51               -429
    Tropical Bont Tick............                  2                -10
Plant and Animal Health                                                 
 Monitoring:                                                            
    Animal Health Monitoring and                                        
     Surv.........................                415               -682
    Animal Health Regulatory                                            
     Enforce......................                 72               -205
    Pest Detection................                 30                  0
Pest and Disease Management:                                            
    ADC Operations................                302               -306
    Aquaculture...................                  4                 -8
    Biocontrol....................                 63                -78
    Boll Weevil...................                 46               -120
    Brucellosis...................                 99               -243
    Golden Nematode...............                  5                -14
    Gypsy Moth....................                 60                -61
    Imported Fire Ant.............                  0                  0
    Misc. Plant Pests and Diseases                 17                  0
    Noxious Weeds.................                  2                  0
    Pink Bollworn.................                  6                -27
    Pseudorabies..................                 18                -55
    Scrapie.......................                 14                -50
    Sweet Potato Whitefly.........                 12                -23
    Tuberculosis..................                 36                -64
    Witchweed.....................                  7                -31
Animal Care:                                                            
    Animal Welfare................                107               -117
    Horse Protection..............                  4                -11
Scientific and Technical Services:                                      
    ADC Methods Development.......                 76               -129
    Biotechnology/Environmental                                         
     Prot.........................                 60                -53
    Integrated Systems Acquisition                                      
     Project......................                  0                  0
    Plant Methods Biocontrol Labs.                 85                -31
    Veterinary Biologics..........                116               -131
    Veterinary Diagnostics........                117               -218
    Contingency Fund..............                  5                -62
                                   -------------------------------------
      Total, APHIS................              2,953             -5,480
------------------------------------------------------------------------

                         legislative proposals
    Mr. Skeen. When do you plan to submit your legislative proposals to 
Congress?
    Response. The Department will submit APHIS' legislative proposal as 
soon as it is drafted, and USDA/OMB review is complete which we expect 
to be soon.
                   national center for import/export
    Mr. Skeen. Where is the National Center for Import-Export located?
    Response. The National Center for Import and Export--NCIE--is 
located at APHIS' headquarters in Riverdale, Maryland. NCIE operations 
consist primarily of providing information, advising, and consulting 
with industry groups, the public and other governments; conducting risk 
assessments; certifying export products; and developing and 
implementing standards, regulations, and policies. This work prevents 
animal disease introduction by ensuring that imported animals or 
animals products are free of disease and ensures that export animals 
offered by the United States meet the criteria of the importing 
country.
                         international programs
    Mr. Skeen. A 1996 study estimated that the total value of U.S. 
agricultural trade which is constrained by technical barriers is 
approximately $4.9 billion. What is the definition of a technical 
barrier. Did these barriers exist prior to GATT and NAFTA legislation?
    Response. Technical barriers are non-tariff restrictions to trade. 
Sanitary and phytosanitary measures designed to protect animal and 
plant health are examples of technical barriers. Questionable barriers 
can include policies that are not supported by sound science, are more 
trade restrictive or protectionist than necessary, or violate one of 
the many principles in the GATT/SPS agreement.
    To harmonize sanitary and phytosanitary measures to the greatest 
extent possible, WTO member countries are encouraged to base their 
measures on international standards, guidelines, and recommendations 
where they exist. However, WTO members may maintain or introduce 
measures which result in higher standards if there is scientific 
justification or as a consequence of consistent risk decisions based on 
an appropriate risk assessment. The WTO expects that members would 
accept the sanitary and phytosanitary measures of others as equivalent 
if the exporting country demonstrates to the importing country that its 
measurers achieve the importing country's appropriate level of health 
protection.
    Yes, these barriers did exist prior to GATT and NAFTA legislation. 
The GATT legislation extends and clarifies the Agreement on Technical 
Barriers toTrade reached in the Tokyo Round in 1979. This agreement 
concerns the application of sanitary and phytosanitary measures. The 
agreement recognizes that governments have the right to use sanitary 
and phytosanitary measures but that they should be applied only to the 
extent necessary to protect human, animal, or plant life or health and 
should not arbitrarily or unjustifiably discriminate between member 
countries where identical or similar conditions prevail. The agreement 
also describes procedures and criteria for risk assessments and the 
determination of appropriate levels of sanitary or phytosanitary 
protection.
                        foreign animal diseases
    Mr. Skeen. Please explain why the total number of foreign animal 
disease investigations increases from 270 in fiscal year 1997 to 420 in 
fiscal year 1998.
    Response. There were 270 suspected foreign animal disease--FAD--
investigations in FY 1995 and 420 such investigations in FY 1996. There 
is no single cause for the increase in the number of suspected FAD 
investigations during this period. However, some contributing factors 
include APHIS' increased surveillance activities undertaken to enhance 
emergency preparedness throughout the United States and its 
territories, and heightened awareness among producers, private 
veterinarians, and the public resulting from the outbreak of Vesicular 
Stomatitis in the Western States and BSE in the United Kingdom.
    Mr. Skeen. How many training courses were provided in fiscal year 
1996 to increase foreign animal disease awareness, where were they 
conducted, what was the number in attendance, and what did it cost?
    Response. APHIS conducted three training courses in fiscal year 
1996 to increase foreign animal disease awareness. Information on these 
courses follows:

------------------------------------------------------------------------
                                              No. in                    
                Location                    attendance         Cost     
------------------------------------------------------------------------
Washington, DC, with various down link                                  
 sites around the U.S...................             309         $37,000
University of Georgia, Georgia..........              25           5,000
Plum Island-Orient Point, New York......              26           5,000
------------------------------------------------------------------------

                electronic poultry export certification
    Mr. Skeen. Full implementation of electronic poultry export 
certification will begin in fiscal year 1997 upon Canada's final legal 
approval. What is the status of this issue?
    Response. Canada's regulations have recently changed to allow 
acceptance of electronic certification. We are working with the 
Canadians to develop operating procedures and will conduct a short 
pilot to test procedures in spring 1997. We anticipate full 
implementation of electronic poultry export certification in fall 1997.
    Mr. Skeen. What were the findings of a collaborative monthly 
feedlot cattle monitoring to report the trends in death loss and 
disease?
    Response. Monthly mortality in monitored feedlots continues to show 
seasonal trends with total losses remain within expected limits based 
on historical data. The data indicates that there have been no 
outbreaks of disease associated with high mortality or long-term 
decreasing or increasing mortality trends. The report also indicates no 
shifts in respiratory, digestive, and other disease patterns.
                   national poultry improvement plan
    Mr. Skeen. The ostrich industry joined the National Poultry 
Improvement Plan in June 1996. What is the level of ostrich 
participation in the program?
    Response. APHIS estimates that approximately 50 percent of the 
ostrich breeders in the United States will participate in the National 
Poultry Improvement Plan in FY 1997.
                 investigative and enforcement services
    Mr. Skeen. APHIS conducted 1,150 investigations involving animal 
health programs resulting in 581 violation cases. This is a 50 percent 
violation rate. How do you explain this?
    Response. Our experience has been that roughly half of the animal 
health cases investigated in a typical year result in formal 
administrative action. For example, the corresponding figures for FY 
1995 were 923 animal health investigations, and 582 violation cases. In 
the other 50 percent of investigations--those situations where a formal 
case does not result--may be due to one of several factors. Upon 
investigation, APHIS may find that (1) no violation occurred, (2) we 
were not able to obtain sufficient evidence that a violation occurred, 
or (3) upon investigation, the program official determined that 
although a violation may have occurred, it is not in the best interest 
of APHIS to pursue formal action. Also, APHIS conducts some 
investigations for traceback and/or fact finding purposes rather than 
enforcement. For example, during the recent outbreak of KB we conducted 
an investigation to obtain information on grain shipment pathways.
    Mr. Skeen. What is done once a violation is identified?
    Response. When a program identifies a possible violation, the 
responsible APHIS program official determines a course of action. One 
option frequently used is the issuance of a warning notice. A second 
option is for the program to request that APHIS' Investigative and 
Enforcement Services unit (formerly Regulatory Enforcement) conduct a 
formal investigation. Once an investigation is completed, the results 
are forwarded to the program official who determines what type of 
action is warranted and requests further actionfrom Investigative and 
Enforcement Services. Options include: (1) no action; (2) warning 
notice; (3) stipulation (Agency issues a civil penalty judgment); (4) 
work with the Office of General Counsel to issue a formal complaint, 
which can result in a fine, suspension, or disqualification, or (5) in 
the most serious instances, referral of the case to the U.S. Attorney's 
office for criminal prosecution.
                              aquaculture
    Mr. Skeen. APHIS awarded a contract to a private consultant to 
provide advisory aquaculture assistance for the further development of 
a national aquaculture program. What is the cost of this contract and 
when will you have some results?
    Response. The cost of the contract is $32,465. The final report is 
due in April 1997.
                           pine shoot beetle
    Mr. Skeen. When do you expect to release the pine shoot beetle 
predator that is being reared at the Niles, Michigan Plant Protection 
Center?
    Response. We expect to release the Thanasimus formicarius 
(Coleoptera:Cleridae) in late FY 1998. Recently, several States have 
requested additional information on the predator's biology and its 
ability compete with native natural enemies. To address these concerns, 
we are working with cooperating researchers to study the predator's 
biology and improve our rearing techniques before making field 
releases.
                   mission biological control center
    Mr. Skeen. What are the results of a study being conducted to 
compare the efficacy of females produced in vitro at the Mission 
Biological Control Center and those produced in vitro on artificial 
media developed by ARS?
    Response. The release study to which you are referring was 
conducted in FY 1996 to compare the efficacy of females produced in 
vivo at Mission and those produced in vitro on artificial media 
developed by ARS. The target organism was the Catolaccus grandis, which 
is being used as a biological control agent against the boll weevil in 
the Rio Grande Valley of Texas. As a result of this study, we have 
determined that the females that ARS has produced in-vitro are just as 
efficacious as the ones we have produced in-vivo. Therefore, we are now 
using the in-vitro process since it is more cost-efficient. Currently, 
the project encompasses 100 acres and involves a partnership among 
APHIS, ARS, Texas A&M, Sanidad Vegital, and cotton growers. In FY 1998, 
the project will expend to 1,000 acres using in-vitro process.
                            golden nematode
    Mr. Skeen. In fiscal year 1996, a panel representing APHIS, the 
National Plant Board, potato growers, and ARS conducted an extensive 
review of the golden nematode program and made a number of 
recommendations. Provide a list of these recommendations and tell the 
Committee the status of each.
    Response. The panel made 15 recommendations. We are establishing an 
implementation team to review the panel's report, determine which 
recommendations can be implemented, establish a timetable for 
implementation, and address the operational details associated with 
implementation. The recommendations follow:
    (1) the feasibility of eradication be tested in accordance with the 
parameters presented by the Panel.
    (2) ARS and Cornell University continue their research and 
development work.
    (3) the program should explore the possibility of developing other 
effective control methodologies.
    (4) the USDA or the New York State Department of Agriculture--
NYSDA--work with potato growers to obtain a special local needs or 
general registration for Basamid.
    (5) the national golden nematode detection surveys now in progress 
be completed.
    (6) the program continue to intensely manage the golden nematode in 
New York State.
    (7) the joint USDA/NYSDA/Cornell University continue to conduct the 
golden nematode management program.
    (8) that the nematode management program be restructured to reduce 
workload.
    (9) the federal-domestic quarantine be revised,
    (10) the NYSDA evaluate the New York State parallel quarantine.
    (11) ARS and Cornell University continue current research efforts.
    (12) funds now provided to the ARS/Cornell University effort from 
APHIS and NYSDA appropriations be redirected to the regulatory and 
management program.
    (13) various potato commissions be consulted in the development of 
a research initiative to identify other detection and control methods.
    (14) federal funding for USDA regulatory and management activities 
continue.
    (15) fees be established for the licensing that would be required 
by the proposed New York State Potato Production Protection Act if the 
NYSDA adopts the Panel's recommendation for a new regulatory program.
                   livestock conservation initiative
    Mr. Skeen. What is the Livestock Conservation Initiative?
    Response. Established in 1916, the Livestock Conservation 
Institute--LCI--is a nonprofit, consensus building organization with 
members from every segment of the food animal industry. The LCI's 
mission is to unify organizations, allied industries, government 
agencies, researchers, and individuals interested in cooperatively 
addressing animal health, animal care, and food safety issues affecting 
animal agriculture in North America. The organization has been involved 
in promoting a series of new programs and policies that reflect the 
changing needs of the food animal industry. Priority issues addressed 
by the LCI include food safety assurance, livestock identification, 
emerging disease preparedness, preventative herd/flock health, 
livestock care and handling, disease eradication, animal health and 
trade, and livestock industry ethics.
                   national wildlife research center
    Mr. Skeen. Specifically how has the National Wildlife Research 
Center reduced the original EPA re-registration data call for chemicals 
to support APHIS's activities from 433 studies at $13.6 million to 258 
studies at $3.0 million?
    Response. National Wildlife Research Center--NWRC--personnel have 
assembled and coordinated the operations of three data-gathering 
consortia. This allowed pooling the resources of Federal and State 
Agencies and private industry to collect and distribute more than $1 
million for meeting data needs. In addition, NWRC scientists, on behalf 
of the consortia, directly negotiated with EPA scientists and 
administrators to reduce data requirements. NWRC also provided 
technical resources to the consortia, prepared technical data waiver 
requests, and negotiated with EPA and consortia members to revise 
labeling to further reduce requirements. The APHIS re-registration 
process has been completed for five of the seven APHIS-supported 
pesticides, and the remaining two should be re-registered by the end of 
FY 1998.
    Mr. Skeen. The Institute for International Cooperation in Animal 
Biologics is a cooperative effort between APHIS, ARS, and Iowa State 
University. Where is this Institute located? What is its mission and 
accomplishments to date? Provide a table that shows how much each 
entity contributes to its operation.
    Response. The Institute for International Cooperation in Animal 
Biologics--IICAB--which was established in October 1995, is based in 
Ames, Iowa. The IICAB's mission is to work cooperatively with others 
around the world who share the goal of improving animal health and 
productivity through the effective use of biologics to control animal 
disease. During its first year of operations, the IICAB accomplished 
three major projects: organizing and hosting the Veterinary Biologics 
Training Program, and coordinating and facilitating two international 
meetings.
    The Veterinary Biologics Training Program was held in Ames, Iowa, 
from May 28 to June 28, 1996. The program provided training to 105 U.S. 
and 5 foreign industry personnel and 9 international government 
regulatory personnel. The training was conducted by scientists and 
regulatory personnel from the USDA, the Iowa State University, and 
other universities.
    In October 1996, the IICAB organized the ``Harmonization of 
Veterinary Biologics in the Americas'' meeting in Brazil. Forty-three 
individuals from 13 countries participated in the meeting. Countries 
represented at the meeting included Argentina, Brazil, Canada, Chile, 
Colombia, Cuba, France, Mexico, New Zealand, Paraguay, Peru, Uruguay, 
and the United States.
    In September 1996, the IICAB and the National Agricultural 
University of Ukraine--NAUU--sponsored the ``Biologics and 
Pharmaceuticals for Improved Animal Production in Ukraine'' meeting in 
Kiev. The World Bank provided $20,000 in funding for the meeting. Over 
200 people attended the meeting including representatives from 
international veterinary pharmaceutical and biologics companies, 
Ukrainian regulatory and industry personnel, and faculty and students 
from the NAUU.

     THE INSTITUTE FOR INTERNATIONAL COOPERATION IN ANIMAL BIOLOGICS    
                      CONTRIBUTIONS BY ORGANIZATION                     
------------------------------------------------------------------------
                                                  FY 1996        1997   
------------------------------------------------------------------------
Iowa State University.........................     $100,000     $100,000
APHIS.........................................      100,000      100,000
------------------------------------------------------------------------

                             1996 olympics
    Mr. Skeen. Did the Olympic Committee reimburse the agency for any 
costs associated with the 1996 Summer Olympic Games?
    Response. No they did not. The FY 1996 Appropriations Act provided 
that of the funds provided, the Secretary could provide for the funding 
of all fees or charges related to the cost of providing import, entry, 
diagnostic and quarantine services in connection with the 1996 
Olympics. As a result, APHIS provided these services, and funded the 
associated $428,623 in related costs from the contingency fund.
              unobligated balance/buildings and facilities
    Mr. Skeen. Provide a detailed breakout of the unobligated balance 
of $29.6 million that was available at the end of fiscal year 1996.
    [The information follows:]
Project:                                                   Amount ($000)
    National Wildlife Research Center.........................       444
    Phase I National Plant Germplasm Quarantine Center........    10,376
    Phase II National Plant Germplasm Quarantine Center.......    10,376
    Screwworm Master Plan.....................................       500
    Methods Development Facility..............................       672
    Predator Research Building................................        59
    Basic Buildings and Facilities............................     6,134
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................    29,561

    Mr. Skeen. How do you explain such a large carryover of funds?
    Response. Of the unobligated balance, approximately $22 million is 
earmarked for the National Plant Germplasm Quarantine Center--NPGQC--in 
Beltsville, Maryland. The permitting process for the NPQC has taken 
more time to complete than was originally anticipated. We are 
optimistic that the final permits will be approved sometime late this 
spring. When that occurs, weanticipate issuing invitations to bid for 
the construction of the facility. We plan to have the construction 
contract awarded no later than September 30, 1997.
    DWRC Master Plan--The FY 1996 carryover was obligated in January 
1997. Funds were used to complete work at the ARB.
    Screwworm Master Plan--The Plan should be initiated in FY 1998. 
After we complete privatization studies, the work associated with the 
architectural and engineering studies will begin.
    Methods Development Facility--There is $672,000 available for 
facility improvements at our Mission, Texas, and Phoenix, Arizona, 
sites. We anticipate obligating these funds during the fourth quarter 
of FY 1997.
    Predator Research Building--The balance is being held for any 
remaining construction improvements that may be required.
    Basic buildings and facilities--The balance of $6,134,000 accounts 
for about 20 percent of the unobligated balance. At the end of FY 1998, 
we anticipate an unobligated balance of less than $5 million.
    Mr. Skeen. The Beef '97 survey plans to take a snapshot of animal 
disease occurrence compared to 1993 data. What are the results of this 
survey and comparison?
    Response. The first phase of data collection for the Beef '97 
survey was completed in February 1997. This data is currently being 
analyzed for a report due in April 1997. Additional data collection is 
also underway. A trend report, which will include a comparison of 1993 
and 1997 data, is scheduled for completion in fall 1997.
                             saltcedar tree
    Mr. Skeen. Researchers in Salt Lake City were proposing to release 
two foreign insects in arid regions in an attempt to control the 
saltcedar tree. These two insects, one from Israel and one from China, 
are thought to feed only on saltcedar. What are the results of the 
environmental assessment of this proposal and its status?
    Response. ARS plans to release an insect agent Trabutina mannipara 
for the biological control of the saltcedar tree in the summer of 1997. 
At that point, ARS will submit a biological assessment to the FWS. Once 
this biological assessment is submitted, we can complete an 
environmental assessment--EA--based in part on the FWS opinion, and 
conclude whether releases of this agent will have no significant 
adverse environmental impacts. If we can make a ``finding of no 
significant impact''--FONSI--we plan to publish a notice in the Federal 
Register to make our EA and the FONSI available for public comment. 
These comments will then be included in the final draft of our EA. 
Based on these comments, a final decision will be made on whether or 
not to issue a permit.
                           imported fire ant
    Mr. Skeen. What is the status of the plan of a researcher in 
Florida to release a South American fly that eats the heads of fire 
ants?
    Response. This plan is still in the research stage and we are 
several years away from any possible release of this parasitic 
Brazilian fly (Pseudacteon) into the field. Currently, an ARS scientist 
is conducting this research in Gainesville, Florida. Even though the 
research established that these flies attack IFA, we are unsure whether 
or not they attack other ants that may compete with the IFA. If the ARS 
research determines that this parasite would be a feasible and 
effective natural enemy for the IFA, this would represent a significant 
development in IFA control in the United States. At this point, IFA 
lacks natural enemies and there are no effective, efficient, and 
environmentally acceptable control agents available for large scale 
application on agricultural land.
                        asian longhorned beetle
    Mr. Skeen. I read where USDA is planning to contribute $500,000 to 
efforts in New York to replace trees being removed and destroyed 
because of the Asian longhorned beetle. What is the status of this 
initiative? Where will this funding come from?
    Response. We have contributed $450,000 through a cooperative 
agreement to the New York Department of Agriculture and Markets for 
tree removal. Tree removal is nearing completion and the program will 
have removed all known infected trees by April 1, 1997. In doing so, we 
will be able to eliminatethe next generation of Asian Longhorned Beetle 
where it is known to occur. Our role in tree removal involves oversight 
to assure that the trees are properly handled, processed, and disposed. 
This funding came from our Contingency Fund.
                    bovine spongiform encephalopathy
    Mr. Skeen. Describe in detail how you would respond if a case of 
BSE were detected in the U.S.
    Response. APHIS and FSIS are jointly preparing a BSE Emergency 
Response Plan which will provide a step by step plan of action in the 
event that a case of BSE is detected in the United States. The BSE 
Response Plan is scheduled for final approval in April 1997.
    The plan outlines appropriate procedures if there is a presumptive 
diagnosis of BSE either at the slaughter plant, on a farm or by the 
National Veterinary Service Laboratories. It covers the following 
topics: (1) composition of a response team, (2) briefing and 
notification plans, (3) herd and product control plans, (4) sample 
documents which will routinely be updated, (5) protocol to confirm 
diagnosis, (6) timeliness, (7) a master checklist of actions, (8) 
depopulation options, and (9) a list of state quarantine authorities.
    Since laboratory confirmation of BSE takes several days, the plan 
recommends that numerous activities take place during this time period. 
For example, after the NVSL determines there are significant 
histological changes in a brain sample, the sample should be examined 
using the immunohistochemical or western blotting technique. If this is 
positive the sample should be flown to England for final confirmation. 
During this interval, two teams should be assembled. One team would 
perform field activities including quarantining the herd, tracing 
movement of progeny, products, and other sales, and investigating the 
suspected source of infection. these field actions are detailed in the 
Herd Control section of the BSE Response Plan. If necessary, a Regional 
Emergency Animal Disease Eradication Organization--READEO--may be 
established. The other team, the BSE Response Team, would handle the 
communication aspects of the outbreak.
    Mr. Skeen. A cheetah in a French zoo, which came from Britain, has 
been put down because it was suffering from BSE. This is the fifth 
known case of BSE in cheetah since 1992. How did the cheetah's get BSE? 
Does this provide support for the theory that BSE can cross species?
    Response. The source of the cheetah's infection is still unclear. 
The theory is that the cheetah developed Feline Spongiform 
Encephalopathy--FSE--from eating food contaminated with BSE. This 
theory has been supported by work conducted in the Great Britain which 
indicates that BSE strains in cattle and FSE strains are the same. Both 
strains are different, however, from any known strains of scrapie in 
sheep.
                 government performance and results act
    Mr. Skeen. GPRA, known as the Results Act, requires each executive 
agency to issue, no later than September 30, 1997, a strategic plan 
covering at least five years. In addition to a mission statement 
grounded in legislative requirements, the plans are to contain general 
goals and objectives that are expected to be outcome or results 
oriented (such as to improve literacy) as opposed to output or activity 
oriented (such as to increase the number of education grants issued).
    (a) What progress is the agency making in developing its strategic 
plan, including defining its mission and establishing appropriate 
goals?
    Response. APHIS has drafted a Strategic Plan, currently being 
reviewed by Department officials. Included in the plan are our mission 
and vision statements and our goals.
    (b) Has the agency identified conflicting goals for any of its 
program efforts? If so what are the performance consequences of these 
conflicting goals and what actions--including seeking legislative 
changes--is the agency making to address these conflicts?
    Response. At this stage, we have not identified conflicting goals 
for any of our programs.
    Mr. Skeen. Stategic plans must be based on realistic assessments of 
the resources available to the agency to accomplish its goals. As you 
are developing your strategic plan, how are you taking into account 
projected resources that likely will be available--especially as we 
move to a balanced budget?
    Response. The APHIS planning process is closely integrated with 
budget development, through a process we call multi-year program 
planning and budgeting. In this process, we develop program goals at a 
reduced level, at a current level, and at a slightly increased level. 
These funding levels allow us to develop a realistic set of goals based 
on varying resource levels, and to make adjustments once funding is 
available.
    (b) What assumptions are you making?
    Response. Under the balanced budget environment, budget increases 
are unlikely. Given the continued increases in the international 
movement of people and cargo, we are certain that we will need to 
maintain current funding levels and programs to accomplish our mission 
of protecting American agriculture and facilitating the trade of 
agricultural products. There may be a shift of resources to meet these 
needs.
    (c) How are you ensuring that your goals are realistic in light of 
expected resources?
    Response. APHIS has been involved in risk assessment as a means of 
protecting American agriculture. Because today's agriculture is driven 
by competition in the global marketplace, we must protect U.S. export 
markets. Therefore, APHIS activities are much more focused on pests and 
diseases that present the greatest risk to exports.
    To ensure that our goals are accomplished with the resources 
available, APHIS forms alliances--with international organizations, 
other federal agencies, State departments of agriculture, universities, 
and industry organizations. For example, our first goal is to protect 
U.S. agriculture from the introduction of foreign pests and diseases. 
With millions of people bringing in personal belongings from foreign 
countries which have economicallyimportant agricultural pests and 
diseases, it is difficult to safeguard against every pest that could 
hurt U.S. agricultural production. APHIS scientists have partnered with 
other scientists to assess the risk of various pests and diseases 
entering the country. At the same time, we partner with U.S. Customs at 
many border ports to help in intercepting high risk agricultural 
material. Developing these cooperative alliances allows us to use the 
limited resources most effectively.
    Mr. Skeen. For Congress, the heart of the Results Act is the 
statutory link between agency plans, budget requests, and the reporting 
of results. Starting with fiscal year 1999, agencies are to develop 
annual performance plans that define performance goals and the measures 
that will be used to assess progress over the coming year. These annual 
goals are to measure agency progress toward meeting strategic goals and 
are to be based on the program activities as set forth in the 
President's budget.
    (a) What progress have you made in establishing clear and direct 
linkages between the general goals in your strategic plan and the goals 
contained in your annual performance plans? OMB expressed concern last 
year that most agencies had not made sufficient progress in this 
critical area.
    Response. For our pest and disease exclusion programs, we have made 
good progress in linking annual goals to our general strategic goals. 
For example, our general goal is to protect U.S. agriculture from the 
introduction or foreign pests and diseases, while at the same time 
ensuring access to foreign markets for U.S. agricultural products with 
regard to their health status. One of the annual performance goals 
linked to this general goal is to eradicate screwworm from Nicaragua by 
the end of 1997. There is a direct linkage in that the farther we push 
screwworm from the U.S. border, the better our livestock is protected.
    On the other hand, for some programs, it is more difficult to set 
annual goals which can be directly linked to our long term general 
goals. Our agricultural quarantine inspection program is a good 
example. Every day our inspectors intercept agricultural products with 
the potential of harboring pests such as Mediterranean fruit flies or 
diseases such as African swine fever. The probability of any one 
interception preventing an outbreak of one of these pests or diseases 
is very difficult to quantify, and therefore it is difficult to set 
annual interception targets. The AQI program has been testing ways to 
quantify these kinds of risks, and to set annual risk reduction targets 
which will be linked to our general protection goal. We have several 
other programs like AQI, in which the complex biology of the 
agricultural risk we are dealing with makes quantifiable linkages to 
our general goals very difficult.
    (b) More specifically, how are you progressing in linking your 
strategic and annual performance goals to the program activity 
structure contained in the President's budget?
    Response. The program activity structure in the President's budget 
is basically the same as the general goals in our strategic plan.
    (c) Do you anticipate the need to change or modify the activity 
structure to be consistent with the agency's goals?
    Response. We do not anticipate needing to change the current 
activity structure to be consistent with the Agency's goals.
    (d) Overall, what progress has your agency made--and what 
challenges is it experiencing--defining results-oriented performance 
measures that will allow the agency and others to determine the extent 
to which goals are being met?
    Response. For many pest and disease management programs, results 
measures were already in place before the GPRA. For example, since the 
brucellosis Rapid Completion Plan has been in place, we have had a 
results-oriented goal of eradicating brucellosis from the U.S. by 1998.
    For other programs with ongoing regulatory or service-oriented 
goals, it has been difficult for program managers to define results-
oriented measures. For our largest program, AQI, we have been testing 
ways to measure the effectiveness of ports of entry inspection programs 
as part of the GPRA program measurement pilot. This has led to a set of 
performance measures which should help everyone understand how well AQI 
is achieving its goals. We are developing results-oriented measurements 
for the FY 1999 budget formulation.
    Mr. Skeen. If applicable, what lessons did the agency learn from 
its participation in the Results Act pilot phase and how are those 
lessons being applied to the agency-wide Results Act efforts?
    Response. Our pilot project in AQI results monitoring yielded 
several lessons learned, including:
    Working with another agency can be very complex. (APHIS and U.S. 
Customs Service carry out joint probability sample surveys at ports of 
entry to estimate the amount of prohibited material entering the U.S.) 
The different approaches in the mission and measurement need to be more 
compatible if collaboration is to succeed.
    Obtaining useful data can take time. An effective monitoring system 
requires a long term commitment and involves continual learning.
    A strong commitment is needed at all levels to continually improve 
data quality. A year or more of data collection may be required before 
sufficient information is available to identify all areas potentially 
needing improved quality. Data must be accurate for the system to be 
trusted and used.
    Communication is critical, both in written materials and in 
personal visits.
    A strong commitment at all levels is essential in gaining support 
for the effort.
    These lessons have been shared across APHIS programs and will be 
used to further define results management for all programs.
    (b) What steps is the agency taking to build the capacity 
(information systems, personnel skills, etc.) necessary to implement 
the Results Act?
    Response. The Agency has recognized the need for information 
systems to support program measurement. Recently, the AQI port 
information network received the highest priority for our Information 
Technology Community resources. The random sample surveys performed to 
monitor AQI results will be part of this port information network. We 
also provide personnel in APHISprograms advice and guidance on setting 
measurable goals and planning for results. Training about GPRA is also 
made available.
    Mr. Skeen. The Results Act requires agencies to solicit and 
consider the views of stakeholders as they develop the strategic plans. 
Stakeholders can include state and local governments, interest groups, 
the private sector, and the general public, among others. Who do you 
consider to be your agency's primary stakeholders and how will you 
incorporate their views into the strategic plans?
    Response. APHIS has a wide variety of stakeholders, ranging from 
congressional committees and members, to agricultural industry 
associations, to State departments of agriculture, to other Federal 
agencies such as Fish and Wildlife Service and U.S. Customs Service, to 
individual farmers and ranchers, to consumers. APHIS has a wide variety 
of mechanisms which provide feedback about its programs at many levels. 
For example, our program in Puerto Rico recently carried out a program 
needs assessment in which Puerto Rican livestock industry 
representatives were interviewed. These kinds of interactions take 
place every day throughout the country and the world with many 
stakeholders. The program views are expressed in these interactions and 
incorporated into program plans which are reflected in the budget 
formulation process. These plans form the basis for our strategic plans 
revisions.
    Mr. Skeen. For the Results Act to be successful, agencies with 
similar missions, goals, or strategies, will need to ensure that their 
efforts are coordinated. What other federal agencies are you working 
with to ensure that your strategic plan are coordinated?
    Response. Several other USDA agencies, including the Agricultural 
Marketing Service, Grain Inspection and Packers and Stockyards 
Administration, Foreign Agricultural Service--FAS, FSIS, and ARS have 
shared draft plans. The Chief Financial Officer--CFO--for USDA is 
coordinating an analysis of cross cutting issues affecting several USDA 
agencies. The CFO has asked agencies to check other strategic plan 
drafts to ensure that our efforts complement each other.
    (b) What steps have you taken to ensure that your efforts 
complement and do not unnecessarily duplicate other federal efforts?
    Response. We are working with other agencies within the Marketing 
and Regulatory Programs umbrella to ensure that our missions, goals, 
and strategies complement each other and that efforts are not 
duplicated. In addition, we will work with our sister agencies 
including FAS, ARS, and FSIS to ensure that our efforts complement each 
other.
    Mr. Skeen. The Results Act requires agencies to consult with 
Congress as they develop their strategic plans. Since these plans are 
due in September, now is the time for agencies to begin the required 
consultations. What are your plans for congressional consultations as 
you develop your strategic plan? Which Committees will you consult 
with? How will you resolve differing views?
    Response. All USDA Mission Areas/Agencies have prepared draft 
Strategic Plans which are currently being reviewed by Department 
officials and OMB. Upon completion of the review, the Department plans 
to provide copies of the Strategic Plan (including an overall 
Departmentwide Executive Summary and the Strategic Plans for individual 
Mission Areas/Agencies) to relevant Congressional Committees. 
Thereafter, we will look forward to begin congressional consultation to 
discuss our Strategic Plan and to solicit input and advice on 
refinements of the Plan.
    We plan to provide copies of the Department Strategic Plan to the 
following Committees/Subcommittee:
          House Agriculture Appropriations Subcommittee;
          House Agriculture Committee;
          House Education and Work Force Committee;
          House Government Reform and Oversight Committee;
          Senate Agriculture Appropriations Subcommittee;
          Senate Agriculture Committee;
          Senate Energy and Natural Resources Committee; and
          Senate Governmental Affairs Committee.
    Mr. Skeen. In passing the Results Act, Congress sought to 
fundamentally change the focus of federal management and decision 
making to be more results-oriented. Organizations that have 
successfully become results-oriented typically have found that making 
the transformation envisioned by the Results Act requires significant 
changes in what they do and how they do it.
    (a) What changes in program policy, organization structure, program 
content, and work process has the agency made to become more results-
oriented?
    Response. One of the changes that the agency has made is to 
participate in the Vanguard Initiative to improve service and 
enforcement at U.S. ports-of-entry. The Federal Inspection Services--
FIS--including APHIS, the Immigration and Naturalization Service, and 
U.S. Customs Service, have worked to improve and streamline the primary 
inspection process. This process is the most visible and critical 
element of passenger inspection and is where we screen passengers and 
baggage and decide whether to allow entry into the U.S. or conduct more 
detailed inspections. The FIS named 10 ports-of-entry as pilot sites 
for testing the passenger processing recommendations. The pilot sites 
are: Miami International Airport; Houston Intercontinental Airport; Los 
Angeles International Airport; Boston's Logan International Airport; 
Nogales, Arizona; San Ysidro, California; Brownsville, Texas; Blaine, 
Washington; Buffalo, New York; and Champlain, New York. The goal of the 
pilot is to test and evaluate recommendations aimed at improving FIS' 
enforcement while at the same time facilitating passenger processing.
    Our Animal Damage Control programs have conducted two customer 
service surveys. Both of those surveys revealed a high degree of 
customer satisfaction with the work being conducted in these programs. 
Respondents to the ADC technical assistance survey included homeowners, 
media, farmers, ranchers, other federal agencies, and others who have 
asked for technical assistance from the program. ADC also surveyed 
recipients of their direct control program. Survey respondents included 
recipients of direct control work--farmers, ranchers, airport 
authorities, and other federal agencies. The results of the surveys 
have helped ADC strategically position their programs for 5-10 years.
    Our Animal Care program is conducting a customer satisfaction 
survey. As of March 17, 1997, we had received 1,700 responses out of a 
goal of 1,825 responses. More than half of the responses have been 
entered into a database.The trial data indicated that 57 percent of the 
respondents rate USDA's Animal Care program as excellent or very good. 
Respondents to this survey included individuals, licensed dealers, 
research institutions, universities, and private industry. Survey 
results will be used to identify measurable results-oriented program 
goals.
    In December 1995, a small group of multi-disciplinary employees 
called the Business Practices Team was formed from various units within 
APHIS to help service providers to critically examine their business 
practices and identify strategies for improving service, reducing 
costs, and enhancing quality. Some of the results of these efforts are 
worth noting:
          International agreements processing time has been reduced 
        from an average of 3 years to as low as 42 days;
          Processing time for tort claims of $2,500 or less has been 
        reduced from 80 work days to 5 days;
          Billing for ADC services has been reduced from four months to 
        three days. Accounts receivable dropped from $30 million to 
        under $4 million; and,
          Refund of excess funds for customers of bird quarantines 
        reduced from up to 3 weeks to 72 hours.
    (b) How are managers held accountable for implementing the Results 
Act and improving performance?
    Response. The Assistant Secretary for Marketing and Regulatory 
Programs has negotiated a set of performance goals, developed for our 
strategic plan. From this program manager will be held accountable for 
achieving results through the annual performance evaluation process.
    (c) How is the agency using Results Act performance goals and 
information to drive daily operations?
    Response. In programs such as brucellosis eradication and 
screwworm, managers are focused on using results information. For 
example, if screwworms are detected in Nicaragua, more sterile 
screwworm flies are dropped on an area and eventually the screwworm 
will be eradicated. For other ongoing programs which are more service 
oriented, such as ADC, results of customer service surveys and other 
measurement information are used to make decisions about which 
activities to carry out and how to improve performance. For other 
ongoing programs, managers are still learning how to use results 
information to drive program decisions.
        Animal Damage Control Program, Zero Funding for Arkansas
    Mr. Dickey. The Animal Damage Control--ADC--program in Arkansas, as 
I understand it, deals almost exclusively with migratory bird problems. 
Those are inherently interstate problems, aren't they? It also deals 
with problems concerning wildlife on federal lands and problems 
involving federally protected species.
    Response. Migratory bird problems occur throughout the Central 
Flyway in the United States. As such, many of the same bird species 
that cause damage in Arkansas may also cause damage in other States. 
Because of the magnitude of the problem, many States recognize the need 
to cooperate with Federal efforts to minimize the damage caused by 
these migratory birds.
    Mr. Dickey. Why shouldn't such activities be paid for with federal 
dollars?
    Response. Wildlife is a publicly owned resource in the United 
States. Because both migratory and resident wildlife are regulated by 
State and Federal Governments, they have the responsibility to maintain 
healthy, stable populations. Accordingly, when wildlife causes damage, 
those governments also have an obligation to help manage the damage. 
The State and Federal Governments involvement in managing wildlife 
damage ensures that control activities are conducted in a biologically 
and environmentally sound manner and in accordance with all applicable 
laws and regulations.
    Mr. Dickey. In Arkansas, non-migratory pest species such as beaver, 
deer and coyote are controlled by private sector companies and the 
Arkansas Game and Fish Commission. This is not the case in other states 
where ADC programs charge a fee to help deal with such ``state 
species.''
    Don't Animal Damage Control operations cooperatively financed by 
such fees compete directly with the private wildlife control industry? 
Is that appropriate? Why?
    Response. The ADC program works closely with the pest control 
industry to ensure that competition with private enterprise does not 
occur. Where private resources exist, ADC personnel routinely refer 
people seeking assistance to local pest control or nuisance wildlife 
operators. APHIS personnel provide technical assistance, training, and 
instructional sessions in the use of various methods, both lethal and 
nonlethal to members of the pest control industry. Agency personnel 
also provide assistance to industry members in obtaining the required 
migratory bird depredation permits. Additionally, APHIS has developed a 
training and certification program allowing pest control operators and 
others access to the avicide Compound DRC-1339 and the tranquilizer 
Alpha-Chloralose. Formerly, these chemicals were authorized for APHIS 
use only, but not may be used by the pest control operators under APHIS 
supervision.
    The Federal Government, by law, has a responsibility to provide 
leadership and assistance to the States, local governments, and private 
individuals in managing damage caused by the Nation's wildlife. Federal 
interest is in protecting threatened and endangered species and human 
health and safety, as well as wildlife damage control. The Government's 
involvement in wildlife damage management activities assures that 
control work is regulated, environmentally sound, and in compliance 
with all Federal, State, and local laws and regulations.
    Mr. Dickey. Why is it fair to penalize Arkansas because we deal 
with our local pest species through private sector companies and 
through our state game and fish commission?
    Response. In an attempt to make the cooperative partnership more 
equitable, APHIS is proposing to eliminate federal contributions toward 
efforts in which the cooperators or program beneficiaries are providing 
little or no funding, and to reduce federal contributions where 
cooperators are providing less than APHIS. The purpose of this proposal 
is to enhance the value of federal dollars invested and therefore the 
results of program efforts, by investing federal funds where 
cooperative funds are also committed. There is no intention on the part 
of APHIS to penalize States. On the contrary, APHIS anticipates that 
this approach would result in increased cooperator commitment in 
several States, and this commitment would provide a strong basis for 
requested increases in federal funds for renewed or enhanced efforts 
when cooperators provide additional program funding in the future.
                         Animal Damage Control
    Mr. Bonilla. I am concerned to see that the President's budget once 
again has proposed a severe cut in funding for a program of particular 
importance in rural communities, the Animal Damage Control--ADC--
program. The President's Budget proposes a $3 million decrease in 
funding for this program. It's true that ADC is an important program 
for agricultural producers--direct losses to agriculture from predator 
damage totaled $461 million in 1996. Without ADC losses would 
undoubtedly be much higher, but the benefits of ADC go far beyond 
agricultural producers.
    ADC also protects air travelers from the problems that can be 
caused by wildlife interference on runways and in the immediate 
airspace or airports--635 airports nationwide participate in the ADC 
program to avoid just these types of problems.
    From a public health perspective, ADC is one of the leading methods 
of controlling the spread of rabies which is a particular problem along 
the border. Rabies is a problem that is not confined to rural areas--
from 1988 to 1972, 1,761 people were treated for rabies in New York.
    From an environmental perspective, ADC programs help to protect 
endangered species from predators, while many of the techniques 
employed by ADC are non-lethal to the targeted species.
    Finally, ADC is a major tool for combating other kinds of predator 
problems that have arisen as human development expands in urban areas. 
For instance, in Los Angeles, a three year old girl was killed by a 
coyote in her front yard. ADC helps to control threats by wildlife 
generally as well as particularly dangerous individual animals like the 
coyote who killed the three year old girl in Los Angeles.
    What was the reasoning behind decreasing funding for this program?
    Response. The ADC operations program functions as a partnership 
between the Federal Government, State, and local cooperators. The 
proposals is not intended to decrease funding for this important 
program, but rather to provide a more equitable mix of federal 
cooperation support, and a more consistent level of support among 
States. We are therefore limiting federal support to no more than half 
of a state's current program level, with expectation that states will 
be willing to pay for at least half of the total benefits they 
received. In an attempt to make this partnership more equitable, APHIS 
is proposing to limit federal contributions toward efforts in which the 
cooperators or program beneficiaries are providing little or no 
funding, and to reduce federal contributions where cooperators are 
providing less than APHIS. The return on program investment is 
inherently much greater where federal funds are at least matched by 
cooperators, thereby stretching the value of federal dollars. APHIS 
anticipates that this approach would result in increased cooperator 
commitment in several States, and this commitment would provide a 
strong basis for requested increases in federal funds for renewed or 
enhanced efforts when cooperatives provide additional program funding 
in the future.
    Mr. Bonilla. You mention in your justification the disparity 
between the percentage of ADC costs shared by different states. How 
will the cut rectify this problem?
    Response. The current disparity among levels of support is from 
zero to 94 percent. Requiring a minimum match of 50 percent will reduce 
the disparity by over half.
    Mr. Bonilla. I understand that you recently met with 
representatives from the Texas Oral Rabies Vaccination Program--ORVP--
to discuss the successes the program has experienced in Texas and the 
potential for this program to serve as a nationwide model in protecting 
citizens from rabies carried by wildlife. Obviously, this program is 
very important to my district and has halted the south and west Texas 
epidemic from spreading to other states. I know that APHIS-Animal 
Damage Control was an original partner in this initiative. Would your 
agency be willing to explore a renewed partnership with states to 
continue this program?
    Response. In both FY 1994 and FY 1995, APHIS provided Agency 
contingency funds totaling approximately $1.8 million toward the 
development of a bait-delivery system for ORVP. APHIS worked with the 
State of Texas in the aerial distribution of 850,000 oral vaccine/bait 
units in FY 1995, 2.5 million units in FY 1996, and an additional 2.5 
million in early 1997.
    APHIS anticipates spending approximately $150,000 of federal and 
cooperative funding for the Texas rabies control efforts in FY 1997. 
The Agency is very much interested in continued involvement in and 
support of such rabies control projects, and will continue to provide 
support in FY 1998.
    Mr. Bonilla. You acknowledged in regard to Animal Damage Control 
that some states are contributing to the cost share at a level below 
the intended 50/50 cost share, while some states are at levels greater 
than 50 percent of the total costs of ADC. In regard to the states 
currently contributing at a level greater than 50 percent of the costs 
of ADC programs, is it your position that the reduction in the total 
budget of ADC would not affect the amount of federal dollars going to 
fund ADC programs in those states? In other words are the proposed 
reductions intended to first bring the amount of ADC expenditures from 
the Federal Government to no more than 50 percent in any state before 
the federal ADC contributed share of dollars is affected in the states 
that are currently paying for at least 50 percent of the costs of ADC?
    Response. The intention of the proposal is to limit federal funding 
to no more than 50 percent of the current total program in each State. 
Federal contributions to states that are currently willing to pay more 
than 50 percent would not be affected.
    Mr. Bonilla. Has any thought been given to the effect reduced 
funding in states that are not currently at the 50 percent cost share 
level will have on the predator populations in neighboring states that 
are contributing at the required level? Predators don't pay any 
attention to state boundaries.
    Response. Because of varying political boundaries, APHIS may not be 
able to provide direct control assistance to resource owners in 
adjacent political jurisdictions nor would personnel be able to deal 
with the source of a problem that is located away from the site of 
predation. This proposal establishes a minimum State matching amount. 
Individual control projects use alternative cost-share formulas a long 
as State-wide support for all projects is at least 50 percent. APHIS 
would be able to continue to provide limited technical assistance on a 
limited basis in areas in which a cooperative program does not exist.
                              karnal bunt
    Mr. Fazio. I applaud USDA's decision to relieve the southeastern 
states of any quarantine restrictions related to Karnal bunt. However, 
it raises questions as to why California is being treated differently.
    Karnal bunt restrictions should apply to only those fields where 
bunted wheat kernels are detected. Last year, every field in Imperial 
County, California and the eastern half of Riverside County, California 
was tested for Carnal bunt, and no bunted kernels were found in any 
fields.
    Why aren't these fields being deregulated immediately?
    Response. We are drafting an interim rule that could affect the 
status of all fields which have no association with bunted kernels. 
Action to deregulate these fields would ensure that all U.S. wheat 
producers and handlers are treated equitably regarding Karnal bunt--
KB--and that U.S. wheat can remain competitive in global markets. Any 
new standard for the identification of KB will be consistent with the 
Department of Agriculture's objective to protect unaffected growers 
from this fungal disease while removing or minimizing restrictions as 
much as possible on those who have been affected.
    Mr. Fazio. Why has a different set of criteria been applied to the 
southeastern United States than was applied to these areas of 
California last year?
    Response. When we originally established regulations for the 
Imperial and Riverside Counties of California, we had identified spores 
that we thought to be KB. Since then, however, we have found that the 
teliospores of a previously unidentified ryegrass smut are, at certain 
stages, indistinguishable from the teliospores of Tilletia indica, 
which is the fungus that causes KB. Based on this finding, APHIS has 
decided that the detection of teliospores alone does not allow us to 
determine conclusively that KB is present in area or article. Rather, 
we will require that bunted kernels, which are kernels that display 
obvious signs of KB, must also be associated with areas or articles 
found to contain teliospores before we make a positive determination 
regarding the presence of KB. If we should determine that KB is present 
in a particular area, we would propose adding that area to the current 
federal quarantine area that we have determined to be infected. APHIS 
and the States would continue to take regulatory actions to conduct the 
full range of containment and control measures that have the least 
impact on production and do not impede export trade.
    Mr. Fazio. The harvest season will begin in a few short weeks in 
areas of California. What is the status of the proposed standard for 
determining the presence of Karnal bunt, and will it be released in 
time for California wheat growers?
    Response. We expect to have these new standards published.
                  50/50 cost share/cooperative funding
    Mr. Obey. ADC is a critical partner in Wisconsin's damage control 
services with Wisconsin farmers and in protecting Wisconsin's natural 
resources. I understand that the Administrations budget proposes a 50/
50 cost share ratio for USDA-ADC cooperative programs. Wisconsin has 
supported such a proposal for some years and has made it a part of its 
Cooperative agreement goal.
    However, federal funding has always fallen behind cooperative 
funding. Currently, the USDA-ADC share of field operations funding is 
$362,000, or about 35 percent, while the State and County share is 
$1,011,000 or about 65 percent. Wisconsin strongly supports the 
proposal to make both parties equal partners whereby USDA-ADC would 
match cooperator funding and recommends that the cost share 
consideration focus only on field operations, and not include 
administrative costs. I would like to know how USDA-ADC plans to 
implement the 50/50 cost sharing.
    Response. Under this proposal, APHIS would provide no more than 50 
percent of total federal and cooperative program costs in any State. 
Base on the most current federal/cooperative contribution data 
available, federal funding would cease in States where the cooperative 
contribution is little or nothing. However, technical assistance would 
continue to be available on a limited basis.
    Mr. Obey. What is the field operations cost share breakdown across 
both USDA-ADC Western and Eastern Regions?
    Response. [The information follows:]

----------------------------------------------------------------------------------------------------------------
                                         Eastern                                          Western               
                                        Region FY    Eastern                             Region FY     Western  
        Eastern Region States             1996      Region FY   Western Region States       1996      Region FY 
                                         approp.   1996 coop.                             approp.     1996 coop.
----------------------------------------------------------------------------------------------------------------
AL...................................    $159,900     $31,963  AK.....................      $45,000     $680,459
AR...................................     258,890  ..........  AZ.....................      448,799      265,791
CT...................................       9,370  ..........  CA.....................    1,414,915    2,264,991
DE...................................      10,580  ..........  CO.....................      790,480      240,854
Dist. of Col.........................       4,761  ..........  HI.....................      100,000      670,262
FL...................................     151,950      78,743  ID.....................      936,144      411,400
GA...................................     103,800     109,477  KS.....................       75,000       33,804
IL...................................     117,050     326,137  MT.....................      973,500      547,194
IN...................................      96,700      21,513  NE.....................      393,874      332,556
IA...................................      68,960       4,361  NV.....................      814,872      619,852
KY...................................      81,600     126,212  NM.....................    1,242,585    1,098,776
LA...................................     361,600     221,520  ND.....................      772,052      331,948
ME...................................     135,700      45,320  OK.....................      789,852      927,322
MD...................................      90,459      71,885  OR.....................      974,440      724,621
MA...................................      75,897      36,450  SD.....................      300,000      786,136
MI...................................      97,800      28,855  TX.....................    2,290,752    5,564,171
MN...................................     242,500          96  UT.....................      996,992      840,175
MS...................................     567,700     849,499  WA//Guam...............      588,637    2,230,392
MO...................................     103,440      54,063  WY.....................    1,006,781      471,136
NH...................................     175,306      68,549                                                   
NJ...................................     109,340     208,182                                                   
NY...................................     119,634     115,898                                                   
NC...................................     185,850     575,420                                                   
OH...................................     148,900      70,000                                                   
PA...................................      79,178  ..........                                                   
RI...................................       8,433  ..........                                                   
SC...................................     163,611     269,778                                                   
TN...................................     244,800     280,701                                                   
VT...................................      61,594      39,710                                                   
VA...................................     168,400     179,034                                                   
WV...................................      89,700     120,582                                                   
WI...................................     525,500     951,596                                                   
                                      --------------------------------------------------------------------------
  Total Eastern Region...............   4,818,903   4,885,544    Total Western Region.   14,954,675   19,041,840
----------------------------------------------------------------------------------------------------------------

    Mr. Obey. How much of field operations are cooperators funding and 
how much is USDA-ACD funding on a state-by-state basis?
    Response. The following table contains the amount of federal 
appropriated funds and cooperator contributed funds allocated by State 
for FY 1996. These funds are used for efforts such as resolution of 
wildlife conflicts at airports, the rabies control project in Texas and 
other human health and safety issues, as well as for the protection of 
endangered species and public and private property.
    [The information follows:]

------------------------------------------------------------------------
                                                   Fiscal year--        
                                         -------------------------------
                  State                        1996            1996     
                                           appropriated     cooperative 
------------------------------------------------------------------------
Alabama.................................        $159,900         $31,963
Alaska..................................          45,000         680,459
Arizona.................................         448,799         265,791
Arkansas................................         258,890  ..............
California..............................       1,414,915       2,264,991
Colorado................................         790,480         240,854
Connecticut.............................           9,370  ..............
Delaware................................          10,580  ..............
District of Columbia....................           4,761  ..............
Florida.................................         151,950          78,743
Georgia.................................         103,800         109,477
Hawaii..................................         100,000         670,262
Idaho...................................         936,144         411,400
Illinois................................         117,050         326,137
Indiana.................................          96,700          21,513
Iowa....................................          68,960           4,361
Kansas..................................          75,000          33,804
Kentucky................................          81,600         126,212
Louisiana...............................         361,600         221,520
Maine...................................         135,700          45,320
Maryland................................          90,459          71,885
Massachusetts...........................          75,897          36,450
Michigan................................          97,800          28,855
Minnesota...............................         242,500              96
Mississippi.............................         567,700         849,499
Missouri................................         103,440          54,063
Montana.................................         973,500         547,194
Nebraska................................         393,874         332,556
Nevada..................................         814,872         619,852
New Hampshire...........................         175,306          68,549
New Jersey..............................         109,340         208,182
New Mexico..............................       1,242,585       1,098,776
New York................................         119,634         115,898
North Carolina..........................         185,850         575,420
North Dakota............................         772,052         331,948
Ohio....................................         148,900          70,000
Oklahoma................................         789,852         927,322
Oregon..................................         974,440         724,621
Pennsylvania............................          79,178  ..............
Rhode Island............................           8,433  ..............
South Carolina..........................         163,611         269,778
South Dakota............................         300,000         786,136
Tennessee...............................         244,800         280,701
Texas...................................       2,290,752       5,564,171
Utah....................................         996,992         840,175
Vermont.................................          61,594          39,710
Virginia................................         168,400         179,034
Washington/Guam.........................         588,637       2,230,392
West Virginia...........................          89,700         120,582
Wisconsin...............................         525,500         951,596
Wyoming.................................       1,006,781         471,136
                                         -------------------------------
      Total.............................      26,746,984      23,145,843
------------------------------------------------------------------------

    Mr. Obey. Would the proposal for 50/50 cost sharing result in net 
federal savings or would it require an increased allocation of funds to 
this program?
    Response. The intention of the proposed reduction is that the 
amount of Federal funding contributed toward ADC activities in each 
State would only be reduced in those States in which the federal 
contribution exceeds the cooperator contribution. Because Federal 
contributions to all other States would not be affected by this 
proposal, the net result would be a decrease in federal funding for the 
ADC program. We would expect that States would increase their 
contributions to make up for the reduced Federal funding levels, so 
that Federal and State shares would each be 50 percent.
    Mr. Obey. How much is spent on administration at the Washington, 
Regional and state office level compared with the district (field) 
level?
    Response. For FY 1997, a total of $37,934,860 in appropriated funds 
is for ADC line items, including ADC operations, ADC methods 
development, and a portion of the aquaculture line item. Of this 
amount, approximately $4,172,492 is used for Agency and program level 
administrative and policy support costs at the National level. The ADC 
Unit also maintains two regional offices for administrative support at 
the field level. These offices were allocated a total of $1,555,030 in 
FY 1997. Nearly all activity at the field level is directly program 
activity related, and any administrative support would be accomplished 
by the same people, using the same space, equipment, supplies, etc. 
APHIS does not differentiate between program delivery and 
administrative costs at the State/field level.
                     Agricultural Marketing Service

                         organic certification
    Mr. Skeen. Your agency planned to publish a proposed rule for 
accreditation of certification agents and product and processing 
standards in support of the Organic Foods Production Act by the summer 
of 1996. What is the status of this initiative?
    Response. We anticipate that the proposed rule for national 
standards for organic products will be published during the late Spring 
of this year. In addition to standards for production, the national 
organic program will include provisions for labeling of organic 
products; certification of organic farms and processing facilities; 
USDA accreditation of private and State agents who will conduct 
certification; compliance and enforcement measures; user fees; and 
criteria for determining the equivalency of imported organic products. 
Accreditation of private and State agents, and the certification of 
farms and processing facilities, should begin once the rule is final.
    Mr. Skeen. Please update the table that appears of page 115 of last 
year's hearing record showing how much has been spent each year along 
with a brief description of what the funding was used for to include 
fiscal year 1997.
    [The information follows:]

                                                                        
------------------------------------------------------------------------
                Activity                    Year        Amount spent    
------------------------------------------------------------------------
Developed a charter for the National         1991  None                 
 Organic Standards Board, or NOSB, and                                  
 initiated a process to receive                                         
 nominations in the event Federal                                       
 Advisory Committee funds became                                        
 available for the NOSB.                                                
The Department allocated $120,000 to         1992  $120,000             
 NOSB from the Department's advisory                                    
 committee account. We arranged three                                   
 NOSB meetings and 11 meetings of                                       
 committees of the NOSB following                                       
 Federal Advisory Committee Act, or FACA                                
 procedures. Continued to provide                                       
 communication to the organic community                                 
 and encouraged them to work together                                   
 with the NOSB to assist the program.                                   
The Department allocated $45,646 to NOSB     1993  45,646               
 from the Department's advisory                                         
 committee account. We provided support                                 
 for three NOSB meetings and served as                                  
 liaison with other agencies and the                                    
 organic community.                                                     
Provided $500,000 from AMS' Marketing        1995  540,000              
 Services account to draft regulations,                                 
 communicate with the organic community                                 
 on issues and concerns, provide                                        
 mailings on USDA recommendations,                                      
 participate in development of                                          
 international guidelines development                                   
 under Codex. We also coordinated and                                   
 implemented the required Technical                                     
 Advisory Panel reviews of substances                                   
 under consideration for the national                                   
 list. The Department allocated $40,000                                 
 to NOSB from the Department's advisory                                 
 committee account, and two meetings                                    
 were held.                                                             
Provided $500,000 from AMS' Marketing        1996  533,000              
 Services account for drafting                                          
 regulations subsequent to NOSB                                         
 recommendations for the Program. We                                    
 participated in a Codex meeting to                                     
 develop international guidelines for                                   
 organic production and processing,                                     
 continued to provide support for the                                   
 NOSB, and discussed the proposed                                       
 organic rule with other agencies that                                  
 may be affected, such as the                                           
 Environmental Protection Agency and the                                
 Food and Drug Administration. The                                      
 Department allocated $33,000 to NOSB                                   
 from the Department's advisory                                         
 committee account, and one meeting was                                 
 held.                                                                  
Provided $490,000 from AMS' Marketing        1997  490,000              
 Services account. We are completing the                                
 drafting of the proposed rule and will                                 
 publish it for public comment by late                                  
 spring, 1997. We will review the public                                
 comments following the comment period.                                 
 The Department's advisory committee                                    
 account was eliminated, no additional                                  
 funding was allocated for NOSB.                                        
------------------------------------------------------------------------

    Mr. Skeen. Last year you reported to us that there were about 4,050 
state and private certified organic producers, but that a substantial 
number of self-certified organic producers existed. Can you tell us how 
many self-certified organic producers are out there?
    Response. We cannot state the exact number of self-certified 
organic producers in the U.S. because these producers are not accounted 
for by any regulatory or certifying organization. Based on discussions 
with an organic farmers marketing association, we estimate there are 
between 2,000 and 3,000 self-certified producers.
    Mr. Skeen. How are these producers monitored?
    Response. These producers would only be monitored if they were 
located in a State that had regulations on organic production, but 
which did not require producers to be certified. One such State is 
California, which requires only that producers register with the State.
    Mr. Skeen. What impact will the new regulations have on all organic 
producers?
    Response. Producers will benefit in many ways from the new 
regulations. The labeling of organic products will protect producers 
from competition with fraudulently labeled products. At the present 
time, the FDA temporarily allows use of the word ``organic'' on labels 
while the proposed rule is still in draft. Also, FSIS does not 
currently allow for the use of the word ``organic'' on meat and poultry 
labels. This will change once the regulation is in place. Producers 
will also benefit from improved trade, both domestically and 
internationally. A single national standard of organic production will 
facilitate the domestic trade of products used as ingredients in 
processed food. International trade will be facilitated by the 
development of agreements establishing country to country equivalency 
of organic standards.
    Mr. Skeen. Has there been any progress made to get the U.S. added 
to the list of countries provisionally approved for shipment of organic 
products to the European Union?
    Response. No, however, based on discussions with the European 
Union, we will pursue this matter after the U.S. has a regulation in 
place.
    Mr. Skeen. When do you anticipate the National Organic Standards 
Program to be fully operational and the collection of fees to begin?
    Response. The final rule will establish a procedure and a time 
frame for designating private persons and State officials as accredited 
certifying agents under the program. We anticipate requiring 
applications to be submitted to AMS within two months following 
publication of the final rule. We will then begin the process of 
accrediting certifying agents which, once accredited, will begin the 
process of certifying producers and processors. As certifying agents 
become accredited, and producers and processors become certified, it 
will be possible to begin collecting fees.
    [Additional information follows:]

 AGRICULTURAL MARKETING SERVICE, NATIONAL ORGANIC PROGRAM FEE COLLECTION
                           SCHEDULE--MAY 1997                           
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Summer 1997.....................  Publication of the  ..................
                                   Proposed Rule.                       
July 1998.......................  Publication of the  ..................
                                   Final Rule.                          
October 1998....................  Receive Certifier   Collect           
                                   Application along   Application Fee  
                                   with the            with each        
                                   Application Fee.    submission.      
January 1999....................  Publish list of     Collect           
                                   Accredited          Administrative   
                                   Certifiers after    Fee from each    
                                   receipt of the      Certifier.       
                                   Administrative                       
                                   Fee (initial                         
                                   Accreditation).                      
                                  Once the list is    Collect Annual    
                                   published,          Certification Fee
                                   farmers and         from farmers and 
                                   handlers who wish   handlers.        
                                   to be certified                      
                                   would begin                          
                                   paying an annual                     
                                   fee for                              
                                   Certification                        
                                   Operations.                          
                                  Within 12 months    Collect Site      
                                   of a certifier's    Evaluation Fee   
                                   initial             plus travel and  
                                   Accreditation, a    per diem         
                                   site evaluation     expenses.        
                                   must be performed  Collect           
                                   which will be       Verification Fee 
                                   billed upon         from each        
                                   completion at an    Accredited       
                                   hourly rate plus    Certifier.       
                                   travel and per                       
                                   diem expenses.                       
                                   Once this is                         
                                   completed, the                       
                                   Certifier will                       
                                   pay a fee for                        
                                   verification.                        
January 2000....................  The fee for the     Collect Renewal   
                                   annual renewal of   Fee and          
                                   Accredited          Administrative   
                                   Certifiers would    Fee from         
                                   be received plus    Accredited       
                                   an additional       Certifiers.      
                                   annual                               
                                   administrative                       
                                   fee, 12 months                       
                                   from the                             
                                   Accredited                           
                                   Certifier's                          
                                   verification.                        
                                  After verification  Collect Site      
                                   of the Accredited   Evaluate Fee plus
                                   Certifier, site     travel and per   
                                   evaluations will    diem expenses.   
                                   be performed at                      
                                   least every three                    
                                   years and will be                    
                                   billed upon                          
                                   completion at an                     
                                   hourly rate plus                     
                                   travel and per                       
                                   diem expenses.                       
------------------------------------------------------------------------

    Mr. Skeen. Provide a detailed breakout of the $505,000 requested 
increase to continue implementation of the Organic Certification 
program.
    [The information follows:]

Fiscal Year 1998

        Obligations                           Increased funding breakout
Salaries and Benefits.........................................  $325,000
Travel and Transportation.....................................    76,000
Rent, Communications and Utilities............................    49,000
Printing......................................................    16,000
Contractual Services..........................................         0
Supplies......................................................    12,000
Equipment.....................................................    27,000
                    --------------------------------------------------------------
                    ____________________________________________________

    Total increase............................................   505,000

    Mr. Skeen. When do you expect to publish the proposed rule to 
establish national standards and definitions governing the marketing of 
agricultural products as organically produced? How long will the 
comment period be? How long do you anticipate it will take to review 
all comments received and published a final rule?
    Response. We anticipate that the proposed rule for national 
standards for organic products will be published during the late Spring 
of this year. The comment period for the proposed rule will be a 
minimum of 90 days. We expect a large number of comments. While the 
volume of comments will affect the rulemaking process, we are committed 
to publishing a final rule as quickly as possible.
    Mr. Skeen. Will the final rule include a fee structure?
    Response. Yes, the National Organic Program's fee structure will be 
included in the final rule.
    Mr. Skeen. How long after the final rule is published do you 
anticipate it will be before fees are assessed and collected and the 
program is self-supporting?
    Response. Certifiers will be assessed fees as they are accredited. 
Thus, the first step in implementing the final rule will be to 
accredit, for a fee, the state and private certifiers. Thereafter, 
producers and processors will be charged fees when they are certified. 
Since we are uncertain of the number of applicants and their 
willingness to pay for certification services, we do not know when the 
organic program will be self-supporting.
    Mr. Skeen. You plan to monitor state programs' compliance with the 
national regulations. What is the Federal cost and the number of AMS 
staff needed to do this?
    Response. We are not sure of the Federal cost and number of staff 
that will be needed to monitor the state programs' compliance with the 
national regulations.
    Mr. Skeen. You state that the user fees collected will be deposited 
in Treasury. Does this mean you will need continued funding as part of 
your appropriations for the programs continuation?
    Response. Yes, AMS will continue to need appropriated funding for 
the organic program. Under current statutory authority, we have 
authority to assess fees, but we do not have authority to keep them. 
Any fees collected will be deposited in Treasury. Legislation would be 
required for AMS to retain the fees.
                    pesticide recordkeeping program
    Mr. Skeen. USDA has a program to ensure that records of Federally 
restricted use pesticides are maintained by certified pesticide 
applicators and requires records be surveyed to provide a database on 
the usage of Federally restricted use pesticides. Through a Memorandum 
of Understanding, your agency oversees restricted-use pesticides that 
private certified applicators apply; Environmental Protection Agency, 
EPA, oversees the commercial applicators; and the National Agricultural 
Statistics Service, NASS, collects and maintains data on agricultural 
use of Federally restricted use pesticides. Are the regulations to 
provide a national standard for restricted use pesticide application 
records by certified private applicators in place?
    Response. The agency published the regulations in April, 1993, with 
an effective date of May 10, 1993. The agency later proposed changes to 
the regulations in April, 1994, and finalized the regulations with an 
effective date of August 1, 1995.
    Mr. Skeen. Provide a list of the states that received Federal 
funding for pesticide recordkeeping in fiscal year 1996, including how 
much Federal funding each received and how much state funding was 
provided.
    [The information follows:]

 AMS COOPERATIVE AGREEMENTS PESTICIDE RECORDKEEPING PROGRAM 1996 FISCAL 
                        YEAR FUNDING REQUIREMENTS                       
------------------------------------------------------------------------
                                            Minimum 5%                  
            State cooperator              State matching      Federal   
                                               funds          funding   
------------------------------------------------------------------------
1. Delaware\1\..........................          $5,129         $12,493
2. Florida \1\..........................          31,607          24,500
3. Idaho................................           1,500          30,000
4. Illinois \1\.........................             925          17,750
5. Michigan.............................           1,871          37,281
6. Mississippi \1\......................           3,038          48,080
7. Missouri \1\.........................           2,920          35,120
8. Ohio \1\.............................           2,424          46,061
9. Oklahoma.............................           1,756          35,993
10. Oregon..............................           1,363          26,709
11. Utah \1\............................           1,711          32,526
12. West Virginia \1\...................           1,816          34,533
13. Wisconsin \1\.......................           1,419          26,961
                                         -------------------------------
      Totals............................          57,479         407,827
------------------------------------------------------------------------
\1\ Indicates states that chose to provide funding in excess of the 5%  
  minimum required match of state funds.                                

    Mr. Skeen. Provide a table showing the resources, both dollars and 
staff, that have been expended on this program since its inception, 
including fiscal year 1997 estimates.
    [The information follows:]

                                             PESTICIDE RECORDKEEPING                                            
                                             [Dollars in thousands]                                             
----------------------------------------------------------------------------------------------------------------
                                              1992      1993      1994      1995      1996      1997      1998  
----------------------------------------------------------------------------------------------------------------
Obligations...............................    $1,023    $1,436    $1,273    $1,352    $1,412    $2,556    $2,570
Staff-years...............................         5         8         8         9         9         9         9
----------------------------------------------------------------------------------------------------------------

    Mr. Skeen. Specifically, how does AMS use the information obtained 
during NASS pesticide usage surveys in determining the degree of 
compliance with recordkeeping requirements?
    Response. NASS provides AMS with a yearly report of the States that 
were surveyed by NASS for pesticide usage. Among other things, the 
report indicates the percentage of those applicators surveyed that 
referred to pesticide records during the survey. AMS uses these figures 
as an indicator of compliance with the requirement to maintain records 
by applicators.
    Mr. Skeen. What is the percentage of compliance with this 
requirement? What actions are taken to enforce this law?
    Response. In 1996, AMS conducted approximately 3,300 inspections of 
private applicator's records. Of those applicators inspected, more than 
95 percent had the required records. AMS inspects applicators' records 
for enforcement of the regulations through a random sampling process. 
These inspections are conducted either by State inspectors under a 
cooperative agreement with AMS or by Federal inspectors. The private 
applicators' restricted use records are checked through personal visits 
and the requirements are explained in full detail at the time of the 
visit. Applicators who are found not to have maintained records are 
given a written warning for non-compliance with the regulations. The 
applicators are then revisited the next year for a follow-up inspection 
and check of records. To date, 100 percent of applicators were found to 
be in compliance in the follow-up inspections.
                        standardization program
    Mr. Skeen. Please update the table on page 119 of last year's 
hearing record showing standardization program costs by commodity for 
fiscal year 1996.
    [The information follows:]

Standardization Program Cost--Fiscal Year 1996

                         [Dollars in thousands]

        Commodity graded                               Standards program
Cotton Classing...............................................    $1,138
Dairy Grading.................................................       360
F&V Fresh.....................................................       667
F&V Processed.................................................       264
Meat Grading..................................................       507
Poultry Grading...............................................       246
Domestic Tobacco..............................................       117
Imported Tobacco..............................................        51
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................     3,350

    Mr. Skeen. What standards are currently being worked on by AMS?
    Response. AMS recently completed new U.S. Standards for Grades of 
Florida grapefruit, oranges and tangelos, tangerines, almonds in the 
shell and shelled almonds. The new U.S. Standards for Grades of apples 
is currently in the rulemaking process. AMS is currently working on 
U.S. Grade Standards for canned apples, beets, carrots, pears, sweet 
and white potatoes, whole kernel corn, frozen okra, field and black-
eyed peas, and apple juice from concentrate. AMS is developing a 
Handbook of Drained Weights and Fill Weights, and will remove these 
criteria from the U.S. Grade Standards. AMS has petitions for frozen 
broccoli, corn, corn-on-the-cob, and leafy greens but are not working 
on them due to changes in food industry priorities.
    We are currently working on revising the slaughter cattle and 
feeder cattle grade standards in order to bring them more closely in 
line with industry marketing practices. Five standards are being 
revised involving skin-on and skinless whole birds and parts and 
boneless parts. Two new standards are being developed for boneless, 
skinless parts and for boneless, skinless size-reduced sliced or diced 
products. Standards for dry whey, dry whole milk, and burley tobacco 
are being reviewed.
                            tobacco programs
    Mr. Skeen. Please update the table that appears on page 120 of last 
year's hearing record showing all the funds, both appropriated and user 
fees, spent on work related to tobacco to include fiscal year 1996 
actuals and fiscal year 1997.
    [The information follows:]

                             TOBACCO FUNDING                            
                         [Dollars in thousands]                         
------------------------------------------------------------------------
                                          FY 1996                       
                                           actual   1997 est.  1998 est.
------------------------------------------------------------------------
Appropriated:                                                           
    Market News........................        899        965        975
User fee:                                                               
    Domestic tobacco grading...........     12,469     13,600     13,740
    Imported tobacco grading...........      2,335      3,700      3,736
    Standards..........................        168        202        204
    Market news (printed reports)......          3          6          6
------------------------------------------------------------------------

    Mr. Skeen. The Dairy and Tobacco Adjustment Act of 1983 requires 
that all tobacco, except cigar and oriental types, imported into the 
U.S. be inspected. Why are cigars and oriental type tobacco exempted?
    Response. According to legislative history, imported cigar and 
oriental types of tobacco were exempted from inspection because they 
were not marketed through auction warehouses in the U.S.
    Mr. Skeen. Agriculture Marketing Service held a Burley Tobacco 
Conference in Lexington, Kentucky in February. What was the purpose of 
this conference?
    Response. The Agricultural Marketing Service conducted a Visitors' 
Tobacco Information course February 20-28, 1997 in Lexington, Kentucky. 
The purpose of this course, attended by tobacco industry personnel, was 
to promote a better understanding of USDA grade standards. All costs 
associated with this course were recovered through fees charged to 
participants.
                           grading activities
    Mr. Skeen. Grading activities are performed by both Federal 
employees and Federally-supervised state employees. Provide a table 
that shows the total number of grading employees and Federally-
supervised state employees for the past five fiscal years.
    [The information follows:]

         AMS GRADING ACTIVITIES PERFORMED BY FEDERAL EMPLOYEES AND FEDERALLY SUPERVISED STATE EMPLOYEES         
----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal years--              
                                                                    --------------------------------------------
                                                                       1996     1995     1994     1993     1992 
----------------------------------------------------------------------------------------------------------------
Number of Federal Employees........................................    1,830    1,931    2,059    2,050    2,242
Number of federally supervised State employees.....................    5,976    6,010    6,027    6,010    6,027
Cross licensed employees of other Divisions or USDA agencies.......       34       39       17       21       26
                                                                    --------------------------------------------
      Total........................................................    7,840    7,980    8,103    8,081    8,295
----------------------------------------------------------------------------------------------------------------

                              fee changes
    Mr. Skeen. Did any grading fees increase or decrease during fiscal 
year 1996? What was the amount of the increase or decrease and why?
    Response. During fiscal year 1996, two AMS programs changed their 
grading fees. The Dairy grading fee increased by 80 cents to cover 
employee pay increases. The Cotton classing fee was reduced by 10 cents 
due to the large crop size and increased efficiency in classing 
operations.
    Mr. Skeen. Did any other fees increase or decrease? By how much?
    Response. In 1996, the Perishable Agricultural Commodities Act fee 
for basic licenses was increased by $150.00 due to increasing salary 
costs and also to offset the statutory requirement that retailer 
licenses be phased-out.
                              market news
    Mr. Skeen. Were any market news reports eliminated or consolidated 
during fiscal year 1997? Do you have any plans to eliminate or 
consolidate any market news reports in fiscal year 1998?
    Response. Yes, there were several reports eliminated or 
consolidated during fiscal year 1997. The Northern California and Los 
Angeles Area Egg reports were consolidated into a single California Egg 
report, and the Southern and Northern California egg inventory reports 
were consolidated into one report. The Chicago, Detroit, and Ohio 
Broiler/Fryer Parts reports wereconsolidated into a single Midwest 
Region Broiler/Fryer Parts report, and the West Mexico Vegetable Report 
was consolidated into the Western Melon and Vegetable Report. Weekly 
cattle summary reports were also consolidated. Reports eliminated 
include livestock auction reports, as well as the Hens Slaughtered in 
Federal Inspected Plants report for regions where fewer than four 
plants were reporting. In fiscal year 1998, the Agency plans to 
consolidate several reports into National level reports, such as the 
National Potato and Onion Report, or commodity specific reports, such 
as the Tomato Report. AMS also plans to eliminate or consolidate 
several reports for sheep and wool, hay, hogs, and cattle.
                     business process reengineering
    Mr. Skeen. What were the results of the business process 
reengineering effort that was underway last year?
    Response. Beginning in October 1995, the Agricultural Marketing 
Service conducted Business Process Reengineering (BPR) of its commodity 
purchase programs. The program delivery team, a working group, analyzed 
the current operations, identified areas of emphasis, and developed 
recommendations for an executive steering committee. These included 
recommendations for streamlining the approval process, implementing a 
management information system, developing a selling kit for vendors 
interested in doing business with USDA, moving to electronic commerce, 
improving funds management, and educating customers of AMS services. 
The steering committee has approved the recommendations, and the 
program delivery team is implementing a plan to accomplish 
reengineering goals. Through this effort, we expect to streamline and 
automate the entire commodity procurement process for improved 
performance.
    AMS conducted or begun similar reengineering, or BPR, projects for 
the Perishable Agricultural Commodities Act Program (PACA), Meat 
Grading and Certification, Marketing Order Administration, and Market 
News. The PACA program received the 1996 Hammer Award from the National 
Performance Review for that program's achievements in identifying 17 
percent redundancies in its business processes, reducing processing 
time for formal reparation complaints by 40 percent, reducing errors 
and improving service with toll-free telephone numbers for customers, 
and developing an automated system that allows the issuance of licenses 
one day after receipt of the application. The Meat Grading and 
Certification program's BPR generated more than 150 new ideas for 
increasing efficiency and expanding services. The program expects to 
reduce admnistrative tasks by 75% and increase service by 15%. For 
marketing order administration, a reengineering model and 
implementation plan have been developed. The Market News BPR project 
has developed a model and implementation plan to improve operational 
areas critical to the business of the program.
                         shell egg surveillance
    Mr. Skeen. How much was spent to cover the Federal costs and how 
much was spent to cover the state costs associated with shell egg 
surveillance in fiscal year 1996?
    Response. In fiscal year 1996, $568,116 was paid to States to 
conduct shell egg surveillance inspections within their State. During 
the same year, $1,852,744 was used to cover the Federal costs for 
inspections, supervision, and administration of the shell egg 
surveillance program.
                          center of excellence
    Mr. Skeen. Were any funds provided to the Center of Excellence in 
World Food Distribution at Prairie View A&M University in fiscal year 
1996?
    Response. In 1996, AMS did not provide funding toward the Center of 
Excellence in World Food Distribution project at Prairie View A&M 
University.
               national laboratory accreditation program
    Mr. Skeen. What is the status of the standards your agency has been 
working on with FDA and FSIS regarding the National Laboratory 
Accreditation Program?
    Response. The proposed rules for the National Laboratory 
Accreditation Program are being reviewed by the Office of General 
Counsel of USDA for the operation of the program and by the OGC at FDA 
for the laboratory and related performance standards of the program. 
After review by each OGC, the proposed rules will be simultaneously 
published in the Federal Register.
                         field office closings
    Mr. Skeen. You planned to close six field offices in fiscal year 
1996. What is this status of the initiative.
    Response. We actually closed eleven field offices in fiscal year 
1996: a Livestock and Grain Market News office in West Fargo, North 
Dakota; Poultry Market News Offices in Edison, New Jersey and Glen 
Ellyn, Illinois; Fruit and Vegetable Market News offices in Presque 
Isle, Maine, Cincinnati, Ohio, McAllen, Texas, Nogales, Arizona, 
Inwood, West Virginia, and Rochester, New York;a Meat Grading office in 
Des Moines, Iowa; and a Milk Market Administrator's office in Columbus, 
Ohio.
    Mr. Skeen. Do you have plans to close any offices in fiscal year 
1997?
    Response. We closed a cotton grading office in Harlingen, Texas 
this fiscal year; we do not plan to close any more offices this year.
                            imported peanuts
    Mr. Skeen. As a result of NAFTA monitoring requirements, your 
agency was developing regulations to require that imported peanuts meet 
certain quality requirements. What is the status of this initiative?
    Response. A final rule establishing minimum quality requirements 
and handling procedures for imported peanuts was published in the 
Federal Register on June 19, 1996. The rule became effective on July 
19, 1996. The regulation and procedures are based on the Peanut 
Marketing Agreement Number 146, that covers domestically produced 
peanuts. The intent of the import regulation and Agreement Number 146 
is to ensure that all peanuts intended for domestic human consumption, 
whether shelled or in the shell, meet quality and wholesomeness 
requirements. Imported peanut shipments are required to be sampled and 
graded by the Federal-State Inspection Service and chemically tested by 
USDA or approved private labs. The rule also established handling and 
reporting procedures, consistent with U.S. Customs Service regulations, 
which should enable AMS to monitor disposition of all lots and to help 
assure that all import requirements are met.
                          emerging democracies
    Mr. Skeen. Last year, you provided the Committee with a summary of 
the work your agency has been doing with several countries to assist 
them in developing market information programs using funds provided by 
the Support Eastern European Development Act and Emerging Democracies. 
Please give us an update.
    Response. AMS has been working in Kazakhstan, Russian Federation, 
and Ukraine through Emerging Markets. AMS has been assisting Kazakhstan 
in the development of a market news information system. All 19 oblasts 
now have been introduced to the market information system and 
collection of information has started.
    AMS has assisted the Russian Federation with the Ministry of 
Agriculture in establishing a core market information system in 12 
oblasts or autonomous republics. The World Bank, as a part of its 
Agricultural Reform Implementation Support Project, or ARIS, has 
extended credit financing to Russia to expand the work begun by AMS 
into a nationwide Market Information System. Once the expansion occurs, 
AMS will have a limited role in providing U.S.-based training to market 
specialists from additional oblasts as they are added to the program 
under ARIS.
    In Ukraine, AMS has made significant progress in training market 
information specialists from 5 key oblasts. By the end of fiscal year 
1997, each of the offices will be able to exchange market information 
directly and to disseminate it widely.
    Mr. Skeen. What is the level of funding you received by the Support 
Eastern European Development Act? Where does this funding come from?
    Response. AMS did not receive any funding from the Support Eastern 
European Development Act in 1996. However, we did receive $1,050,775 
from the Foreign Agricultural Service for Emerging Democracies 
activities.
                      wholesale market development
    Mr. Skeen. For the record, please provide the Committee with a 
listing and status of all Wholesale Market Development projects 
underway in fiscal year 1996 and to date in fiscal year 1997.
    [The information follows:]

------------------------------------------------------------------------
               Projects                              Status             
------------------------------------------------------------------------
Chicago, IL, Randolf and Fulton         Completed--FY 1997.             
 Streets Market Study.                                                  
Maine, Identifying Specific Marketing   Published--FY 1997.             
 Facility Requirements.                                                 
Atlanta, GA (market modernization)....  Underway.                       
Jackson, MS, New retail Produce Sales   Completed--FY 1996              
 Building.                                                              
Computer Simulation of Market           Underway.                       
 Operations.                                                            
Benton Harbor, MI, Facility Design      Underway.                       
 Study.                                                                 
Thomasville, GA, Assembly Market Study  Published--FY 1997.             
Asheville, NC, Urban Market Project...  Underway.                       
Columbus, OH, Urban Market Project....  Published--FY 1997.             
Reading, Pennsylvania Urban Market      Completed--FY 1997.             
 Project.                                                               
An Economic Analysis for Establishing   Underway.                       
 Shipping Point Marketing Facilities                                    
 in Southwestern Virginia.                                              
Los Angeles, CA, Floral Market Study..  Published--FY 1997.             
Mid-Hudson Valley, NY, Regional         Published--FY 1997.             
 Marketing Study.                                                       
Northern Ohio Food Terminal Wholesale   Underway.                       
 Market Expansion Master Plan Study.                                    
Assessment of Delaware Direct Market    Completed--FY 1997.             
 Operations Customers Needs and                                         
 Opinion.                                                               
Sea Islands Alternative Market          Underway.                       
 Development Study, Sea Islands.                                        
Montgomery State Farmers' Market        Completed--FY 1997.             
 Study, Montgomery, AL.                                                 
Boston Public Market Initiative,        Underway.                       
 Boston, MA.                                                            
Maryland Food Center Collection Market  Underway.                       
 Facility.                                                              
Farmers' Market Study, St. Paul, MN...  Underway                        
Public/Farmers' Market Feasibility      Underway.                       
 Study, Camden, NJ.                                                     
California Farmers' Market Web Site     Underway.                       
 Development.                                                           
Cincinnati Public Market Study,         Underway.                       
 Cincinnati, OH.                                                        
Oakland, CA Wholesale Market Study....  Underway.                       
Direct Marketing Survey...............  Spring 1997.                    
------------------------------------------------------------------------

    Mr. Skeen. Do you have any proposals to do additional Wholesale 
Market Development projects in fiscal years 1997 and 1998?
    Response. Yes, AMS has received proposals for this fiscal year. The 
Wholesale Market Development program completes, on average, 10-12 
projects per year which includes projects involving traditional 
wholesale and collection markets, farmers' markets, and other direct 
marketing alternatives for producers.
    Mr. Skeen. Provide a list of all ongoing and planned wholesale 
market development projects and the cost of each.
    Response. AMS costs are not accounted for on an individual project 
basis. Following is a list of cooperative agreements that supported 
wholesale market projects.
    An Economic Analysis for Establishing Shipping-Point Marketing 
Facilities in Southwestern Virginia (Phase II), $25,000.
    Reading Terminal (Public) Marketing Expansion, $25,000.
    Assessment of Delaware Direct Market Operations, Customers Needs 
and Opinions, $18,000.
    Sea Islands Alternative Market Development Study, Sea Islands, 
South Carolina, $25,000.
    Improving Opportunities for Limited Resource Farmers to Supply 
Local School Lunch Program Needs, $75,000.
    Boston Public Market Initiative, Boston, Massachusetts, $25,000.
    California Farmer's Market Web Site Development, $25,000.
    Cincinnati Public Market Study, Cincinnati, Ohio, $50,000.
    Merchant Development Program, $75,000.
          wholesale market development and payments to states
    Mr. Skeen. How do these projects differ from projects funded under 
payments to states and possessions?
    Response. Occasionally there are similarities between a wholesale 
market project and a project funded under the Payments to States and 
Possessions programs, also called the Federal-State Marketing 
Improvement Program, or FSMIP, but the programs are structured quite 
differently. Wholesale Market projects focus on distributed channels 
with emphasis on type and location of marketing facilities, and AMS 
provides the funding.
    FSMIP is a matching-grant program between USDA and State 
departments of agriculture or other State agencies in which the State 
furnishes at least half of project resources. AMS oversees the projects 
and ensures that program requirements are met. FSMIP projects involve a 
wide range of marketing issues of interest to a State, region, or 
commodity. Management of the two programs within AMS is closely 
coordinated so that projects are undertaken within the program for 
which they are best suited.
    Mr. Skeen. What is the average length of a project under the 
Federal-State Marketing Improvement Program? What is the average cost 
of a project?
    Response. The large majority of projects in the Federal-State 
Marketing Improvement Program are one-year grant agreements. 
Occasionally grants are given for two years, and occasionally one-year 
grants are extended where circumstances warrant. The administrative 
rules permit a short time following the end of the agreement period to 
submit final reports. The average size, or cost, of a project varies 
based on the number and nature of applications received. For FY 1996, 
21 grants were made with the $1.2 million appropriation, for an average 
Federal cost of just over $57,000 per project. The Federal-State 
Marketing Improvement Program is a matching-grant program with States 
at least matching the Federal share, so the total cost of an average 
project is more than twice the Federal cost, or approximately $120,000 
in FY 1996.
                        marketing order imports
    Mr. Skeen. Your agency has been working with the U.S. Custom 
Service to develop a Memorandum of Understanding to provide you with 
import data that can be utilized in monitoring Section 8e imports. What 
is the status of these negotiations?
    Response. In July 1996, the U.S. Customs Service agreed to provide 
AMS with data tapes of information on Section 8e imports. AMS began 
receiving import data tapes from Customs in November 1996. This import 
information is crucial for AMS to reconcile imports and USDA inspection 
certificates to improve importers' compliance with Section 8e 
requirements.
                         research and promotion
    Mr. Skeen. Please update the table that appears on page 130 of last 
year's hearing record showing payments by research and promotion boards 
for OGC services to include fiscal year 1996 actuals and fiscal years 
1997 and 1998 estimates.
    Response. Following is a table showing payments made by AMS 
research and promotion boards to OGC for legal services.

                RESEARCH AND PROMOTION OGC LEGAL SERVICES               
------------------------------------------------------------------------
                                             Fiscal year--              
                             -------------------------------------------
                                 1995       1996       1997       1998  
                                actual     actual    estimate   estimate
------------------------------------------------------------------------
National Dairy Board........    $15,000    $11,715    $17,000    $17,000
Egg Board...................      2,000        983      1,000      1,000
Honey Board.................          0      1,620      2,000      2,000
National Cattleman's Board..      9,000      6,758     10,000     10,000
National Pork Board.........      4,000      1,892      3,000      3,000
Cotton Board................      1,000      2,087      3,000      3,000
Potato Board................      1,000        931      1,000      1,000
Watermelon Board............      2,000      1,527      2,000      2,000
Soybean Board...............      5,000        776      1,000      1,000
Mushroom....................      2,000     12,816     18,000     19,000
Fluid Milk..................     10,000      2,961      4,000      4,000
Fresh Cut Flowers...........          0      2,272      4,000      4,000
                             -------------------------------------------
      Total.................     51,000     46,338  \1\ 66,00           
                                                            0     67,000
------------------------------------------------------------------------
\1\ FY 1997 estimates are based on the FY 1996 hours billed plus known  
  or anticipated activities (e.g., referenda, major regulation changes, 
  court cases, etc.).                                                   

    Mr. Skeen. Authority was provided in the 1996 farm bill to enable 
industry groups who want to establish a research and promotion program 
to go directly to the USDA for its development through the rulemaking 
process instead of legislatively. Has this authority been used yet?
    Response. The Supima Association of America, representing the U.S. 
Extra Long Staple cotton industry, has submitted a proposed research 
and promotion order to AMS for their industry.
    Mr. Skeen. Six of the 14 research and promotion programs spent more 
than the assessments collected in fiscal year 1996. How is this the 
case and how are these shortfalls in collections rectified?
    Response. Research and promotion programs do not depend solely on 
assessments collected in the current year. Unspent funds from previous 
fiscal years are carried over and spent in subsequent fiscal years. In 
addition, carry-over funds are invested to earn income which also can 
be used for program activities.
    Mr. Skeen. The National Dairy Promotion and Research Board's 
revenue from producer assessments in fiscal year 1996 was $76.5 million 
of the approximately $230 million collected. Where did the other $153.5 
million come from?
    Response. The entire producer promotion program is funded by a 
mandatory 15-cent per hundredweight assessment on all milk produced in 
the contiguous 48 States and marketed commercially by dairy farmers. 
This assessment totaled approximately $230 million. The Dairy 
Production Stabilization Act states that farmers can direct up to 10 
cents per hundredweight of the assessment to State or regional 
promotion and nutrition education programs which accounted for the 
$153.5 million. The remaining $76.5 million represents the 5 cents per 
hundredweight that dairy farmers must send to the National Dairy 
Promotion and Research Board.
    Mr. Skeen. Provide a list of all research and promotion programs 
that receive funding from FAS, including how much each receives, for 
fiscal years 1995 and 1996 and estimates for fiscal year 1997.
    [The information follows:]

          FAS FUNDING TO INDUSTRY RESEARCH AND PROMOTION BOARDS         
                         [Dollars in thousands]                         
------------------------------------------------------------------------
                                            1995       1996       1997  
------------------------------------------------------------------------
National Dairy Promotion and Research                                   
 Board.................................     $1,300     $2,000     $2,200
Honey Board............................         33        130        133
Potato Board...........................        890        585      1,291
------------------------------------------------------------------------

    The SoyBean, Beef, and Pork research and promotion programs do not 
receive funds from FAS directly, but do benefit from funds provided to 
industry associations.

------------------------------------------------------------------------
                 Board                           Contracts with         
------------------------------------------------------------------------
Soybean Board.........................  American Soybean Association.   
Beef Board............................  National Cattlemen's Beef       
                                         Association.\1\                
Pork Board............................  National Pork Producers         
                                         Council.\1\                    
------------------------------------------------------------------------
\1\ Subcontracts with the Meat Export Federation.                       


           FAS FUNDS PROVIDED TO RELATED INDUSTRY ASSOCIATIONS          
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                       1995         1996         1997   
           Fiscal year               (actual)    (estimate)   (estimate)
------------------------------------------------------------------------
American Soybean Association.....       $9,298       $9,095       $9,311
Meat Export Federation...........       11,149        9,997       11,874
------------------------------------------------------------------------

    AMS receives no funds from FAS for research and promotion oversight 
activities.
    Mr. Skeen. There were a number of referendums scheduled for early 
1997. Give the Committee a status on each one for the record.
    [The information follows:]
                1997 research and promotion referendums
    April 15-30, 1997 to determine if popcorn processors favor 
implementation of the Popcorn Research and Promotion Program.
    June 2-20, 1997 to determine if cut flowers and greens handlers 
favor continuation of the PromoFlor program.
    June, 1997 to determine if kiwifruit producers and importers favor 
implementation of the Kiwifruit Research and Promotion Program.
    Mr. Skeen. If a referendum fails, what is the next step that is 
taken?
    Response. If an initial referendum fails, the program is not 
implemented. If a delayed referendum fails, the Secretary suspends or 
terminates collection of assessments within 6 months and suspends or 
terminates the order as soon as practicable.
                            federal seed act
    Mr. Skeen. Update the table that appears on pages 130 and 131 of 
last year's hearing record showing the number of new complaints and the 
amount of penalties assessed under the Federal Seed Act to include 
fiscal year 1996. Also include the number you were able to resolve 
administratively.
    [The information follows:]

                            FEDERAL SEED ACT-COMPLAINTS, PENALTIES, AND PENDING CASES                           
----------------------------------------------------------------------------------------------------------------
                                                                               Fiscal years--                   
                                                          ------------------------------------------------------
                                                              1992       1993       1994       1995       1996  
----------------------------------------------------------------------------------------------------------------
Complaints...............................................        411        611        527        543        532
Penalties................................................    $17,950    $43,250    $28,400    $56,300    $42,500
Cases pending............................................        578        693        743        583        559
Resolved administratively \1\............................         66        147         71        157        112
----------------------------------------------------------------------------------------------------------------
\1\ Represents cases settled with an administrative penalty. Other cases were closed with letters of warning,   
  held in abeyance pending future performance of the shipper, or were found not to be violations of the Federal 
  Seed Act.                                                                                                     

                          research activities
    Mr. Skeen. Please provide a list of all research activities, 
including the subject, who is doing the research, and the cost for each 
contract for any research other than what occurs through the Federal-
State Marketing Program.
    [The information follows:]

             RESEARCH INVOLVING AGREEMENTS WITH COOPERATORS             
------------------------------------------------------------------------
              Project                 Cooperator/Contractor       Cost  
------------------------------------------------------------------------
An economic analysis for            Virginia Polytechnic         $25,000
 establishing shipping-point         Institute and State                
 marketing facilities in             University.                        
 southwestern Virginia (phase II).                                      
Reading terminal (public) market    Reading terminal farmers      25,000
 expansion.                          market trust.                      
Assessment of Delaware direct       University of Delaware...     18,000
 market operations, customers                                           
 needs and opinion.                                                     
Sea Islands alternative market      South Carolina Department     25,000
 development study, Sea Islands,     of Agriculture.                    
 SC.                                                                    
Impact of changes in Canadian       Upper Great Plains            40,000
 transportation and marketing upon   Transportation                     
 U.S. grain producers in the         Institute, North Dakota            
 Northern Plains.                    State University, Fargo,           
                                     North Dakota.                      
Developing a procedural guide for   Texas A&M University,         48,000
 exporting U.S. animal and poultry   College Station, Texas.            
 products to Mexico under NAFTA.                                        
Survey of processed products        California State              15,000
 exporters.                          University, Fresno.                
Study of selected grain handling    U.S. Feed Grains Council.     30,000
 ports in Asia.                                                         
Forecasting the demand for rail     Kansas State University..     30,000
 grain transportation.                                                  
Importance of regional railroads    Upper Great Plains            20,000
 to U.S. agriculture.                Transportation Institute.          
Distribution channels for U.S.      Arizona State University.     35,000
 poultry exports to Poland/Ukraine.                                     
Improving opportunities for         Georgia Department of         75,000
 limited resource farmers to         Agriculture.                       
 supply local school lunch program                                      
 needs.                                                                 
Impacts on U.S. grain distribution  Texas A&M University.....     60,000
 arising from structural changes                                        
 on the Upper Mississippi and                                           
 Illinois rivers.                                                       
Boston Public Market Initiative,    Department of Food and        25,000
 Boston, MA.                         Agriculture, Boston, MA.           
California Farmers' Market Web      California Federation of      25,000
 Site Development.                   Certified Farmers.                 
Cincinnati Public Market Study,     Cincinnati Department of      50,000
 Cincinnati, OH.                     Economic Development.              
Merchant Development program......  Avenue Market Corp.           75,000
                                     Baltimore, MD.                     
------------------------------------------------------------------------

                        transportation services
    Mr. Skeen. What is the status of the U.S. Army Corps of Engineers 
proposed management plan for the Missouri River System? Please provide 
an update on this plan.
    Response. The U.S. Army Corps of Engineers is revising several of 
the underlying studies they had undertaken on management of the 
Missouri River System. Following the completion of these studies, they 
will amend their regional economic development and national economic 
development models on alternative operating scenarios for the Missouri 
River. These revisions are expected to be completed in October 1997 and 
a new proposed operating plan for the Missouri River System should be 
completed in fiscal year 1998.
    Mr. Skeen. Your agency is monitoring three constraints that are 
restricting free trade of agricultural products to and from Mexico. 
Please provide an update on these constraints.
    Response. Although the number and intensity of constraints to 
increased agricultural trade between the United States and Mexico vary 
over time, AMS is principally involved in the monitoring of two such 
constraints at the present time. These are (1) the implementation of 
new phytosanitary and inspection requirements for imported grain, and 
(2) the bilateral access of U.S. and Mexican trucks required by the 
North American Free TradeAgreement--NAFTA. Although the Mexican 
government has imposed new restrictions on the entry of U.S. wheat into 
Mexico because of perceived problems with the Karnal Bunt disease, 
Mexico has not yet formally imposed the more restrictive phytosanitary 
rules on the importation of grain that it has been proposing for 
several years. Officials of U.S. and Mexican departments of 
transportation are negotiating a safety inspection program for Mexican 
trucks so they may enter the U.S.
                   payments to states and possessions
    Mr. Skeen. Please provide a list of the projects that were approved 
for your Payments to States and Possessions program during fiscal year 
1996 and those approved for fiscal year 1997. Also provide a brief 
description of each project.
    Response. We have not approved any projects for FY 1997 at this 
time. We are currently in the process of receiving and reviewing 
proposals for funding consideration. I will provide a list of projects 
funded in FY 1996.
    [The information follows:]

    FEDERAL-STATE MARKET IMPROVEMENT PROGRAM, FISCAL YEAR 1996 GRANTS   
------------------------------------------------------------------------
            State                       Description            Awarded  
------------------------------------------------------------------------
Arkansas.....................  Expand the capability of          $50,000
                                small and medium-size                   
                                agribusinesses to identify              
                                and develop international               
                                markets for selected value-             
                                added specialty products.               
California...................  Document and evaluate,             62,000
                                through a selected case                 
                                study approach, the                     
                                viability, effectiveness,               
                                and adaptability of Web                 
                                Page technology in                      
                                agricultural marketing.                 
Delaware.....................  Conduct surveys of different       29,640
                                potential users of Kenaf                
                                and develop a marketing                 
                                plan for the Kenaf industry.            
Hawaii.......................  Provide agricultural               69,166
                                producers, processors, and              
                                marketers with key market               
                                information that will lead              
                                to increased sales of                   
                                Hawaiian tropical fruits in             
                                the Asian-Pacific Region.               
Idaho........................  Develop a consumer based           48,000
                                understanding of national               
                                aquacultural markets in                 
                                order to assist the Idaho               
                                and U.S. trout industries               
                                in developing appropriate               
                                educational and marketing               
                                strategies.                             
Idaho........................  Develop organic                    36,450
                                certification templates,                
                                develop and implement an                
                                organic inspector                       
                                apprenticeship program, and             
                                revise the Organic                      
                                Inspection Manual                       
                                consistent with the                     
                                National Organic Program                
                                rules.                                  
Illinois.....................  Increase the value of U.S.         98,000
                                soybeans by better serving              
                                the firms producing high-               
                                value products such as tofu             
                                and miso.                               
Kentucky.....................  Assess the existing                60,000
                                diversification and                     
                                marketing activities                    
                                underway in fifteen                     
                                ``tobacco dependent''                   
                                counties; develop a                     
                                coordinated, multi-county               
                                approach to improve these               
                                programs; and document                  
                                diversification successes               
                                for use in future                       
                                educational and training                
                                activities.                             
Massachusetts................  Expand the database of             26,270
                                producers interested in                 
                                exporting high-value food               
                                and agricultural products,              
                                measure the quantities of               
                                products presently                      
                                exported, and develop a                 
                                multilingual directory as a             
                                marketing tool to link                  
                                producers with foreign                  
                                buyers.                                 
Michigan.....................  Conduct processing quality         57,650
                                assessments for new apple               
                                cultivars or promising                  
                                advanced lines, using                   
                                controlled processing                   
                                conditions.                             
------------------------------------------------------------------------


    FEDERAL-STATE MARKET IMPROVEMENT PROGRAM FISCAL YEAR 1996 GRANTS    
------------------------------------------------------------------------
            State                       Description            Awarded  
------------------------------------------------------------------------
Minnesota....................  Identify marketing                 45,000
                                opportunities and                       
                                strategies for small scale              
                                producers and processors by             
                                increasing the scale of                 
                                direct marketing of meat,               
                                fish, and fowl and by                   
                                developing niche retail and             
                                food service markets for                
                                value-added products.                   
Missouri.....................  Assemble information and           70,000
                                develop cost comparisons                
                                for the present marketing               
                                system relative to                      
                                alternative forms of an                 
                                identity-preserved                      
                                marketing system for                    
                                soybeans in the cornbelt                
                                region.                                 
Nebraska.....................  Investigate the feasibility        70,000
                                of producing and marketing              
                                turf and forage grass seed              
                                as a specialty crop in                  
                                irrigated areas of western              
                                Nebraska.                               
New Jersey...................  Form a farmers' market             48,349
                                coalition, document                     
                                characteristics and examine             
                                efficiency of farmers'                  
                                market operations, and                  
                                examine characteristics and             
                                demographics associated                 
                                with farmers' market                    
                                customers.                              
New Jersey...................  Identify, characterize, and        49,975
                                quantify the nutraceuticals             
                                market and provide                      
                                information for farmers and             
                                others on production and                
                                marketing opportunities.                
North Carolina...............  Provide additional                 50,000
                                information concerning                  
                                consumer purchasing                     
                                decisions to assist North               
                                Carolina and Southeast                  
                                regional producers and                  
                                marketers of nursery                    
                                products to better market               
                                their products and services.            
North Dakota.................  Conduct market research,           75,000
                                business plan research and              
                                development, and                        
                                engineering research and                
                                planning for a multi-state              
                                premium beef processing and             
                                marketing cooperative.                  
Oklahoma.....................  Identify various factors           38,000
                                that foreign importers and              
                                distributors in the food                
                                service industry consider               
                                in deciding which products              
                                to purchase and to discover             
                                what specialty food                     
                                products are in demand.                 
South Carolina...............  Prepare a market analysis,         71,500
                                develop alternative                     
                                production practices,                   
                                determine structural and                
                                financial requirements for              
                                establishing a farmer                   
                                marketing cooperative, and              
                                develop quality standards               
                                for domestically produced               
                                flax.                                   
Texas........................  Refine the evaluation of fat       90,000
                                deposits among different                
                                breeds of cattle and                    
                                develop a training video                
                                which will enable graders               
                                of live cattle to be more               
                                accurate in applying grade              
                                standards.                              
Vermont......................  Expand the base of regional        55,000
                                cooperative, involving both             
                                the public and private                  
                                sectors, in developing                  
                                export markets for                      
                                Northeast dairy products                
                                (Phase II).                             
------------------------------------------------------------------------

    Mr. Skeen. Please update the table that appears on page 137 of last 
year's hearing record showing obligations by geographic area to include 
fiscal year 1996.
    [The information follows:]

[Page 111--The official Committee record contains additional material here.]


                       emergency surplus removal

    Mr. Skeen. Also, update the tables that appear on the following 
page showing the amounts expended for Emergency Surplus Removal and 
Disaster Relief to include fiscal year 1996.
    [The information follows:]

Emergency Surplus Removal

                        [In thousands of dollars]

Fiscal year:                                                      Amount
    1985......................................................   $58,111
    1986......................................................    44,122
    1987......................................................    12,054
    1988......................................................    98,325
    1989......................................................     7,359
    1990......................................................    26,474
    1991......................................................    54,284
    1992......................................................   102,928
    1993......................................................    63,399
    1994......................................................    78,452
    1995......................................................    96,679
    1996......................................................    56,172

Disaster Relief

Fiscal year:
    1985......................................................         0
    1986......................................................         0
    1987......................................................         0
    1988......................................................    $3,253
    1989......................................................         0
    1990......................................................     1,743
    1991......................................................     5,642
    1992......................................................    11,175
    1993......................................................     4,636
    1994......................................................     3,463
    1995......................................................       530
    1996......................................................     1,168
                            export purchases
    Mr. Skeen. Update the table that appears on page 138 of last year's 
hearing record showing export purchases to include fiscal years 1995 
and 1996 actuals.
    [The information follows:]

Export Purchases

                        [In thousands of dollars]

Fiscal year:                                                      Amount
    1986......................................................         0
    1987......................................................         0
    1988-1989.................................................    $8,149
    1989-1990.................................................     3,788
    1990-1991.................................................    15,366
    1991......................................................         0
    1992......................................................    23,971
    1993......................................................    31,878
    1994......................................................    24,024
    1995......................................................         0
    1996......................................................         0


------------------------------------------------------------------------
                                                           Countries    
      Fiscal year                 Commodities               received    
------------------------------------------------------------------------
1988-1989..............  Sunflowerseed Oil...........  Egypt            
1989-1990..............  Sunflowerseed Oil...........  Algeria          
1990-1991..............  Cottonseed Oil..............  Egypt, Turkey,   
                                                        Venezuela       
1992...................  Sunflowerseed Oil...........  Algeria, Egypt,  
                                                        Mexico, Former  
                                                        Soviet Union    
                         Cottonseed Oil..............  Dominican        
                                                        Republic, Egypt,
                                                        El Salvador,    
                                                        Turkey,         
                                                        Venezuela       
1993...................  Sunflowerseed Oil...........  Algeria,         
                                                        Guatemala,      
                                                        Mexico,         
                                                        Venezuela       
                         Cottonseed Oil..............  El Salvador,     
                                                        Guatemala,      
                                                        Mexico,         
                                                        Nicaragua,      
                                                        Turkey,         
                                                        Venezuela       
1994...................  Sunflowerseed Oil...........  Algeria,         
                                                        Guatemala,      
                                                        Mexico, Turkey, 
                                                        Venezuela       
                         Cottonseed Oil..............  Egypt, El        
                                                        Salvador,       
                                                        Guatemala,      
                                                        Mexico          
------------------------------------------------------------------------

                          commodity purchases

    Mr. Skeen. Provide an updated table of section 32 commodity 
purchases showing fiscal year 1993 through 1996.
    [The information follows:]

[Pages 114 - 115--The official Committee record contains additional material here.]


    Mr. Skeen. Please update the section 32 table that appears on page 
141 of last year's record.
    [The information follows:]

                                                   SECTION 32                                                   
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                               Estimate                         
                        Item                         -----------------------------------------------------------
                                                             1996                1997                1998       
----------------------------------------------------------------------------------------------------------------
Appropriation or estimate...........................     $6,263,764,062      $5,923,376,725      $5,799,067,890 
1996 Rescission.....................................         (5,000,000)                  0                   0 
Unobligated balance available, start of year........        235,129,235         300,000,000         237,511,705 
Recovery............................................            739,082                   0                   0 
      Total Available...............................      6,494,632,379       6,233,376,725       6,036,579,595 
    Less transfers to:                                                                                          
        Food and Consumer Service, Child Nutrition                                                              
         Programs...................................     (5,597,858,000)     (5,433,753,000)     (5,151,391,000)
        Department of Commerce......................         (7,893,162)        (66,381,000)         66,381,000 
          Total transfers...........................     (5,670,751,162)     (5,500,134,020)     (5,217,772,000)
    Total available after transfer..................        823,881,217         723,242,705         818,807,595 
    Less total obligations..........................       (496,073,233)       (485,731,000)       (416,888,000)
    Unobligated balance reverting to Treasury.......        (27,807,984)                  0        (101,919,595)
    Unobligated balance available, end of year......        300,000,000         237,511,705         300,000,000 
----------------------------------------------------------------------------------------------------------------

                    marketing order conversion cost
    Mr. Skeen. The legislative proposal to convert the administrative 
costs of marketing agreements and orders to user fees includes a one-
time conversion cost of $536,000. Do you propose this cost be funded 
from section 32 funds.
    Response. Yes, we are proposing that they be funded from section 32 
funds.
                            surplus removal
    Mr. Skeen. The Secretary has the authority to use section 32 funds 
to remove surplus commodities from the market and bolster producers 
prices. Provide a list of each time the Secretary used this authority 
and the amount used for fiscal years 1995 and 1996. Has the Secretary 
used this authority yet this fiscal year?
    [The information follows:]

Fiscal Year 1995

        Item                                         Dollars in millions
Apricots, canned..................................................  $5.5
Asparagus, canned.................................................   1.3
Beef Roast........................................................  13.5
Cherries, frozen..................................................   7.1
Corn, canned......................................................   2.8
Corn, frozen......................................................   2.3
Currants..........................................................   0.2
Date Pieces.......................................................   2.5
Grape Juice, canned...............................................   2.7
Grapefruit, juice.................................................   1.9
Ham Roast.........................................................  11.0
Peaches, canned...................................................   4.5
Peaches, frozen...................................................   1.5
Pears, canned.....................................................   5.4
Pears, fresh......................................................   2.0
Plums, canned.....................................................   0.5
Pork, frozen ground...............................................   6.7
Potatoes, fresh...................................................   0.5
Raisins...........................................................  10.0
Salmon, canned....................................................   9.6
Salmon, nuggets...................................................   0.3
Strawberries, frozen..............................................   1.8
Walnuts...........................................................   3.1
                        -----------------------------------------------------------------
                        ________________________________________________
  Total...........................................................  96.7

Fiscal Year 1996

        Item                                         Dollars in millions
Beef Roast........................................................  $6.4
Blueberries, frozen...............................................  10.1
Date Pieces.......................................................   1.9
Dried Figs........................................................   2.4
Fig Nuggets.......................................................   0.4
Orange Juice, canned..............................................  13.3
Potatoes, fresh...................................................   1.5
Prunes, dried.....................................................   6.4
Prunes Puree......................................................   1.6
Salmon, canned....................................................  10.0
Salmon Nuggets....................................................   2.2
                        -----------------------------------------------------------------
                        ________________________________________________
  Total...........................................................  56.2

Fiscal Year 1997 thru 3/1/97

        Item                                         Dollars in millions
Beef, canned......................................................  $8.8
Beef, ground......................................................  16.0
Beef, Special Trim, boneless......................................   6.5
Cheese............................................................   1.3
Orange Juice......................................................   0.2
Salmon, pouched...................................................   1.3
Unused Authorization..............................................  34.9
                        -----------------------------------------------------------------
                        ________________________________________________
  Total...........................................................  69.0
                              pink salmon
    Mr. Skeen. Describe in further detail the pilot program for pink 
salmon packaged in a flexible pouch?
    Response. The pilot program to purchase pink salmon packaged in a 
flexible pouch was based on recommendations of a task force consisting 
of USDA officials, Alaska State officials and representatives of the 
industry. The group identified the need to find a salmon product that 
better meets the needs of the National School Lunch Program and would 
expand marketing opportunities for the salmon industry. Many items were 
submitted but the pouched pink salmon was selected due to its 
institutional pack and versatility. The pouched, pink salmon was 
purchased at a cost of $39.8640 per case, or $1.6610 per pound, 
compared to $22.3032 per case, or $1.0081 per pound, for canned pink 
salmon. The added cost to the USDA of approximately $0.65 per pound was 
due to deep skinning and removal of skin and bones. The pouched salmon 
was distributed to schools in 30 States. USDA agents conducted product 
exams with school representatives at six destinations and reported that 
recipients were highly pleased with the salmon. A final report on the 
pouched salmon will be developed from annual product acceptability 
reports submitted by States to the Food and Consumer Service at the end 
of the school year.
                perishable agricultural commodities act
    Mr. Skeen. Update the table that appears on page 140 of last year's 
hearing record showing the user fees and obligations for the Perishable 
Agricultural Commodities Act to include fiscal year 1996 actuals and 
fiscal year 1998 estimates.
    [The information follows:]

             PERISHABLE AGRICULTURAL COMMODITIES ACT PROGRAM            
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                   Fiscal year                     Revenue   Obligations
------------------------------------------------------------------------
1998 est........................................     $8,683      $7,495 
1997 est........................................      9,063       7,147 
1996............................................      9,690       6,735 
1995............................................      7,371       7,371 
1994............................................      7,464       7,338 
1993............................................      7,378       6,921 
1992............................................      7,875       6,731 
------------------------------------------------------------------------

    Mr. Skeen. Also update the table that appears on page 141 of last 
year's hearing record showing the reparations ordered related to the 
Perishable Agricultural Commodities Act to include fiscal year 1996.
    [The information follows:]

                 PERISHABLE AGRICULTURAL COMMODITIES ACT                
------------------------------------------------------------------------
                                                                 Dollar 
              Reparation fiscal year                  Orders    value in
                                                                millions
------------------------------------------------------------------------
1996..............................................        663      $12.2
1995..............................................        825       11.9
1994..............................................      1,180       17.9
1993..............................................      1,112       16.6
1992..............................................      1,217       16.1
1991..............................................      1,171       14.7
1990..............................................      1,130       12.6
1989..............................................      1,144        9.5
------------------------------------------------------------------------

    Mr. Skeen. Including Fiscal year 1996, how many notices filed by 
unpaid sellers were there for the Perishable Agricultural Commodities 
Act.
    Response. In fiscal year 1996, unpaid sellers filed 36,179 Trust 
notices, a significant decrease from the 160,490 filed with the 
Department in fiscal year 1995. This 88 percent decrease in trust 
filings is a direct result of the 1995 amendments to the Perishable 
Agricultural Commodities Act which eliminated the requirement that 
creditors file trust notices with the Department in order to preserve 
their trust rights.
    Mr. Skeen. Under PACA, traders who have been found to have 
committed unfair trade practices face license suspensions or 
revocations. During fiscal years 1995 and 1996, how many traders were 
found guilty of unfair trade practices and how many had their licenses 
suspended?
    Response. In fiscal year 1995, there were 48 traders found to have 
committed unfair trade practices. Of those 48 traders, 6 of the firms 
had their licenses suspended, 1 firm paid a monetary penalty in lieu of 
a license suspension, 9 firms had their licenses revoked, and 32 firms 
were found to have committed repeated and flagrant violations.
    In fiscal year 1996, there were 51 traders found to have committed 
unfair trade practices. Of the 51 trades, 1 firm's license was 
suspended, 10 firms paid monetary penalties in lieu of a license 
suspension, 7 firms had their licenses revoked, and 33 firms were found 
to have committed repeated and flagrant violations of the Perishable 
Agricultural Commodities Act. A finding of repeated and flagrant 
violations results in licensing and employment restrictions on a firm 
and its principals identical to those restrictions imposed by a license 
revocation.
    Mr. Skeen. Proposed revisions to PACA regulations were published in 
September 1996. The revised regulations are expected to be finalized in 
1997. When do you expect final regulations to be published? Describe 
the changes included in the final regulations.
    Response. The final Perishable Agricultural Commodities Act 
regulations should be published in late March 1997. The final 
regulations have not been changed significantly from the proposed rule, 
except that the section of the proposed rule involving the collection 
of license fees has been separated from the final rule. A notice re-
opening the comment period on the license fee issue will be published 
concurrently with the final rule in order to allow other interested 
parties to comment.
                     minnesota-wisconsin milk price
    Mr. Skeen. A new basic formula price replaced the Minnesota-
Wisconsin price to establish minimum class prices under all milk 
marketing orders on June 1, 1995. This was seen as only a short-term 
solution to allow the industry additional time to consider longer-term 
solutions. What is the status of this situation?
    Response. The Federal Agriculture Improvement and Reform Act of 
1996 directed USDA to restructure the Federal milk order program. The 
development of a replacement for the current basic formula price is 
part of this effort. AMS has appointed an internal committee to seek 
industry comments and to determine a replacement to be adopted. This 
first committee report isscheduled for release in April 1997. The 
entire restructuring process is to be completed by April 1999.
                        administrative expenses
    Mr. Skeen. Update the table that appears on page 143 of last year's 
hearing record showing the details of the administrative expenses 
account to include fiscal year 1996.
    [The information follows:]

                                       AMS ADMINISTRATIVE EXPENSES ACCOUNT                                      
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                           Fiscal year                               Receipts      Expenditures      Carryover  
----------------------------------------------------------------------------------------------------------------
1990............................................................         $39,525         $34,816         $14,996
1991............................................................          44,186          42,129          17,053
1992............................................................          48,774          47,091          18,736
1993............................................................          51,866          46,830          23,772
1994............................................................          49,127          46,652          26,248
1995............................................................          57,448          49,529          34,166
1996............................................................          51,547          46,887          38,827
----------------------------------------------------------------------------------------------------------------

    Mr. Skeen. Also update the following table showing the object class 
breakout for the limitation on administrative expenses account to 
include fiscal year 1996 actuals and fiscal year 1998 estimates.
    [The information follows:]

         ADMINISTRATIVE EXPENSE LIMITATION OBJECT CLASSIFICATION        
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                            1996                        
                                           actual   1997 est.  1998 est.
------------------------------------------------------------------------
Personnel compensation:                                                 
11.1  Full-time permanent..............    $13,237    $16,190    $16,434
11.3  Other than full-time permanent...      7,665     10,013     10,164
11.5  Other personnel compensation.....      1,415      2,649      2,689
                                        --------------------------------
      11.9  Total personnel                                             
       compensation....................     22,317     28,852     29,287
                                        ================================
12.1  Personnel benefits: Civilian.....      3,798      5,037      5,111
13.0  Benefits for former personnel....      2,169      2,100      2,100
21.0  Travel and transportation of                                      
 persons...............................      2,788      3,150      3,150
22.0  Transportation of things.........      1,191      1,560      1,560
23.1  Rental payments to GSA...........        139        335        335
23.2  Rental payments to others........      2,696      3,100      3,100
23.3  Communications, utilities & misc.                                 
 charges...............................      4,909      5,600      5,600
24.0  Printing and reproduction........         28         75         75
25.2  Other services...................      1,978      2,463      2,463
25.3  Purchases of goods and services                                   
 from Government accounts..............        206        238        238
25.7  Operation and maintenance of                                      
 equipment.............................      1,085      1,246      1,246
25.8  Subsistence and support of                                        
 persons...............................          8         14         14
26.0  Supplies and materials...........        999      1,040      1,040
31.0  Equipment 2,569..................      4,202      4,202  .........
42.0  Insurance claims and indemnities.          6          0          0
43.0  Interest and dividends...........          1          0          0
                                        --------------------------------
      99.0  Total obligations..........     46,887     59,012     59,521
------------------------------------------------------------------------

                       mailed market news reports
    Mr. Skeen. Subscription fees are charged for facsimile and mailed 
market news reports except for tobacco mailed reports which are free to 
producers as per the Tobacco inspection Act of 1935. What is the cost 
of AMS for these reports?
    Response. The cost to AMS for the tobacco mailed reports, free to 
producers, averages about $7,000 per year.
    Mr. Skeen. Provide a list of all commodity market news reports 
where fees are charged for facsimiles and mailings.
    Response. Fees are charged to all recipients of printed markets 
news reports on cotton and cottonseed; dairy and dairy products; fruits 
and vegetables; livestock, grain, and meat; poultry and eggs; and to 
non-producer recipients of tobacco reports.
                      usda pesticide data program
    Mr. Skeen. Since 1991, how many agricultural use pesticides have 
been reregistered using data gathered by the Pesticide Data Program?
    Response. To date, there have been 16 reregistration activities by 
EPA for major pesticides in U.S. agriculture for multiple commodity 
uses: aldicarb, benomyl, captan, chlorothalonil, chlorpropham, DCPA or 
dacthal, dicofol, ethion, fenamiphos, iprodione, mevinphos, 
pentachloronitrobenzene orquintozene, permethrin, propargite, 
thiabendazole, and trifluralin. There have also been four special 
review activities on: 2,4-D, diazinon, disulfoton, and methyl 
parathion. Following is an example provided by EPA of the value and 
uses for pesticide data. To determine the present status for each of 
these pesticides for registration on crop by crop basis we gathered 
information from the Office of Pesticide Programs, EPA.
    [The information follows:]

[Pages 121 - 123--The official Committee record contains additional material here.]


    Mr. Skeen. The number of commodities tested in the Pesticide Data 
Program dropped from 12 in fiscal year 1996 to 11 in fiscal year 1997. 
Which commodity was eliminated?
    Response. The EPA did not have the contracting authority to enter 
into an agreement with GIPSA to do wheat and soybean sampling and 
testing in fiscal year 1997 and they were therefore eliminated from the 
commodity count. Subsequent to the preparation of the explanatory 
notes, funding has been returned to AMS from the EPA, enabling testing 
to resume.
    In total, there are 14 commodities in the 1997 program, with no 
more than 13 being sampled at any time. The fresh commodities covered 
in the 1997 program are pears and potatoes--for aldicarb residues only, 
plus spinach, sweet potatoes, tomatoes, and winter squash. Processed 
commodities include apple and orange juice, canned or frozen green 
beans, canned peaches, and frozen winter squash alternating with fresh 
squash. We also tested wheat, soybeans, and milk.
    Mr. Skeen. Provide a list of all international trade disputes that 
have been settled using data generated from PDP.
    Response. We do not have a list of trade disputes settled using PDP 
data. AMS personnel have played a direct role in promoting U.S. exports 
by presenting PDP sampling and testing objectives to countries like 
Indonesia, Japan and Korea that are interested in importing U.S. wheat 
and other U.S. agricultural products.
    Mr. Skeen. Provide some specific examples, if there are any, of how 
the program has suffered this year under EPA's administration.
    Response. Let me begin by stating that the cooperation between AMS 
and EPA during this situation has been excellent. Extraordinary efforts 
were necessary on the part of both agencies to ensure that the program 
functioned as normally as possible. Although state program operations 
were restarted soon after issuance of EPA contracts in November, some 
problems still exist for AMS.
    The 3 month hiatus in sampling and testing (September through 
November) caused data deficiencies in the 1996 PDP Annual Data Summary, 
because of the resulting inability to calculate national statistical 
estimates.
    AMS lost half of its PDP headquarters staff, curtailing some of 
PDP's operations. I am pleased to state that the current staff has made 
extraordinary efforts to maintain monthly data collection in 1997, to 
complete the 1995 Annual Data Summary, and to hold an Executive 
Steering Committee meeting and a Federal/State planning meeting. 
Operating on minimal staff required postponing revisions in the 
standard operating procedures, eliminating sampling and laboratory 
reviews, eliminating newsletters, evaluating new technologies, and 
delaying the 1996 Summary.
    With 14 organizations in the program, about 900 sampling sites, and 
over 100 sampling personnel, the use of EPA's contract authority 
instead of AMS' cooperative agreement authority has created a rigid 
structure for the program.\1\ Changes in program needs periodically 
occur, necessitating shifts in resources. AMS had more flexibility to 
address problems by rearranging program resources as necessary. 
Significant changes in program delivery to address any emerging food 
safety issues requires more time using EPA contracts. Also, authority 
to purchase needed equipment is restricted under EPA contracts, which 
resulted in no EPA funds being spent on capital equipment this year. 
This will postpone upgrades of testing equipment and the implementation 
of new technology.
---------------------------------------------------------------------------
    \1\ Unlike AMS, EPA does not have the legal authority to enter into 
cooperative agreements.
---------------------------------------------------------------------------
    Mr. Skeen. What has been done to date with Congress' directive that 
EPA enhance in-house PDP data collection abilities?
    Response. It is our understanding that EPA expressed concerns about 
managing the Pesticide Data Program. I will include in the record the 
EPA memorandum to Congressman Lewis proposing the transfer of funds to 
the USDA to administer the Pesticide Data Program, and the House 
Committee on Appropriations response approving the proposal. An 
interagency agreement transferring funds to AMS from EPA for 
administering the program was signed on February 25, 1997.
    [The information follows:]

[Pages 125 - 130--The official Committee record contains additional material here.]


                   transportation regulatory actions

    Mr. Skeen. How many transportation regulatory actions did AMS 
participate in during fiscal 1996?
    Response. AMS participated in three transportation regulatory 
proceedings during fiscal 1996. First, AMS filed comments several times 
before the Surface Transportation Board, or STB, in the Union Pacific-
Southern Pacific Railroad merger proceeding. In those comments, AMS 
highlighted the importance of competitive rail service for agricultural 
producers and shippers and the entire rural economy, as well as the 
adverse effects of continuing consolidation and concentration in the 
railroad industry. AMS recommended several measures designed to 
maintain or increase competitive options for grain shippers. Secondly, 
AMS filed comments on proposed rail line abandonment procedures by the 
STB. AMS advised the STB that its proposed reduction in service and 
financial data requirements for petitioning railroads in branch line 
abandonment proceedings could have an adverse impact on rural 
constituents. Finally, AMS also filed comments on proposed STB fee 
schedules which would have significantly increased filing fees for 
shippers that pursue rate or service complaints against railroads. AMS 
cautioned the STB that the proposed fee increases for many of its 
services were prohibitive for all but the largest and most well-
financed businesses that ship by rail. In the most extreme example, the 
STB had proposed raising the fee for bringing a rate complaint from 
$1,000 to $233,000. AMS advised STB that small to medium-sized 
agricultural rail shipping establishments cannot afford to pay such 
exorbitant fees.
                          oig and gao reports
    Mr. Skeen. Provide a brief status of each ongoing OIG and GAO 
report.
    Response. Following is the status of each ongoing OIG and GAO audit 
included in the FY 1998 Explanatory Notes.
    The OIG audit reports were completed for the ``Investment Program'' 
on February 18, 1997, and for ``Cotton Classing'' on February 21, 1997. 
The OIG draft report on the ``Certification Process of the Fruit and 
Vegetable Division'' is expected to be completed by April 1997.
    The GAO ``Opportunities to Reduce Federal Inspection/Grading 
Costs'' draft report was completed on February 3, 1997. The 
GAO``Assessment of Concentration Within the Meat Packing Industry'' is 
expected to be completed by April 1997, and the ``Study of School Lunch 
Meal Program's Best Practices'' is expected to be completed by 
September 1997.
                          performance measures
    Mr. Skeen. Two performance measure indicators show a percentage 
reduction from fiscal year 1996 to fiscal year 1997. Under Federal 
seed, the percentage of cases submitted that are completed is projected 
to decrease from 100 percent to 92 percent and under cooperative 
qualifications, the percentage of informal rulemaking completed within 
internal time frames is projected to decrease from 100 percent to 85 
percent. Please explain the reason for these reductions.
    Response. The 92 percent figure was cited for Federal Seed due to 
uncertainties of case load and staffing. AMS' goal is to complete 100 
percent of the cases made each year and over the past two years this 
goal has been met.
    On a regular basis, AMS can meet internal marketing agreement and 
order program timeframes for formal and informal rulemaking 85 percent 
of the time. This is a strong indicator of customer satisfaction. In 
1996, AMS exceeded its goal and met its timeframes for informal 
rulemaking 100 percent of the time.
                           peanut non-signers
    Mr. Skeen. AMS receives reimbursement from assessments for peanut 
non-signers. Briefly describe for the record how this reimbursement is 
used.
    Response. Assessments received by the Agricultural Marketing 
Service from peanut non-signers--handlers of domestically produced 
peanuts who have not signed Peanut Marketing Agreement No. 146--are 
deposited in a AMS agency fund to offset associated costs. The $39,000 
collected in assessments for the 1995-96 season went toward expenses 
for billing and collecting services performed by the Department's 
National Finance Center, administrative oversight, and compliance 
audits of individual non-signers.
                 limitation on administrative expenses
    Mr. Skeen. You are reimbursed for the grading of cotton and 
tobacco. This reimbursement was $46.9 million in fiscal year 1996. You 
project this level to be $59.0 million in fiscal year 1997. What is the 
reason for the increase?
    Response. The $59.0 million level for fiscal year 1997 is a 
statutory limitation set well in advance of the start of the fiscal 
year to insure uninterrupted services to private sector customers 
regardless of fluctuations in actual crop size. The actual obligations 
will not be known until the end of the fiscal year on September 30, 
1997.
    Mr. Skeen. Provide a breakout between cotton and tobacco for fiscal 
years 1996, 1997, and 1998.
    [The information follows:]

                  LIMITATION ON ADMINISTRATIVE EXPENSES                 
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                   1996 actual   1997 est.    1998 est. 
------------------------------------------------------------------------
Cotton...........................       32,083       41,712       42,045
Tobacco..........................       14,804       17,300       17,476
                                  --------------------------------------
      Total......................       46,887       59,012       59,521
------------------------------------------------------------------------

             reimbursements from milk market administrators
    Mr. Skeen. Why do you anticipate obligations for milk market 
administrators for Federal telecommunications system employee 
compensation and New York market administrator to increase from $18,952 
in fiscal year 1996 to $208,000 in fiscal year 1997?
    Response. The increase in fiscal year 1997 is due to additional 
reimbursements for audits of the milk market administrators' financial 
records. AMS enters into contracts with certified public accounting 
firms that conduct the audits. The cost of these audits is paid for 
from milk market order assessments.
                            travel expenses
    Mr. Skeen. You are projecting to increase your travel budget by 28 
percent in fiscal year 1997 and another 14 percent in fiscal year 1998. 
Why?
    Response. Most of the estimated travel costs in fiscal year 1997 
are for the Pesticide Recordkeeping program, which received increased 
funding to implement the program and establishcompliance monitoring 
activities. For fiscal year 1998, we requested program increases for 
our Market News and Organic Certification programs, and requested that 
the Pesticide Data program be reinstated in AMS. Each of these 
activities increased our estimated travel costs.
                        other services expenses
    Mr. Skeen. Please provide a sub-object class breakout of object 
class 25.2 Other Services, for fiscal years 1996, 1997, and 1998.
    [The information follows:]

                    OTHER SERVICES OBJECT CLASS--25.2                   
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                                     Fiscal year--      
                 Object class                 --------------------------
                                                 1996     1997     1998 
------------------------------------------------------------------------
Contractual Services (2510)..................   $2,281   $2,300   $2,303
Agreements (2550)............................    9,256      383    9,349
Telephone Equipment (2538)...................       45       45       46
NFC Processing/Greenbook (2512)..............      221      223      223
Training Tuition Fees (2523).................      130      132      132
Repair Alteration (2530).....................       57       58       58
Miscellaneous Service (2570).................      207      209      209
                                              --------------------------
      Total..................................   12,197    3,350   12,320
------------------------------------------------------------------------

                   printing and reproduction expenses
    Mr. Skeen. Please explain why your printing and reproduction costs 
increase by 30 percent in fiscal year 1997.
    Response. Printing and reproduction costs incurred by AMS programs 
vary from year to year. These costs dropped by 40 percent from fiscal 
year 1995 to 1996. In fiscal year 1997, we expected printing costs to 
increase in our Transportation Services, Wholesale Market and Organic 
Certification programs. The Transportation Services and Wholesale 
Market program print workbooks, handbooks, guides, and directories. The 
Organic program plans to publish its proposed rule in the Federal 
Register this year, with associated printing and reproduction of 
supporting documentation.
                        passenger motor vehicle
    Mr. Skeen. You are proposing the addition of one passenger motor 
vehicle for use by the cotton futures program in response to an 
expected increase in workload. For the record, describe the cotton 
futures program and tell the Committee why you expect the workload to 
increase enough to warrant an additional car.
    Response. Cotton is submitted year-round for futures classification 
and certification, as opposed to the Form 1 classification service 
provided to growers primarily during the harvest. Futures classing and 
certification services are provided only by the Standardization and 
Quality Assurance--QSA--Branch in the AMS Cotton Division complex in 
Memphis, TN, and USDA's official certification of quality is required 
for cotton traded on the New York Cotton Futures Exchange. QSA also 
provides quality control classification for the Form 1 program.
    In the past few years, the volume of cotton submitted for futures 
classification each year has grown dramatically. Large volumes of 
futures samples have been submitted with very short notice for 
certification on the October and December futures contracts. This 
futures cotton arrives during the time when the Memphis complex is very 
busy with the harvest period Form 1 classing for growers. During the 
harvest season, Form 1 classing has always taken top priority in the 
allocation of resources and equipment, especially since the futures 
volume was traditionally very small. If a small amount of futures 
samples was submitted during the fall, which was a rarity ten years 
ago, the related transportation needs could be met in conjunction with 
the Form 1 classing.
    With the growth in futures volume over the past seven to eight 
years, the transfer of related futures documents, required futures 
sampling inspections at Memphis certified warehouses where the futures 
cotton must be stored, and other related duties associated with futures 
certification have grown to the extent that these activities cannot be 
consolidated smoothly with the Form 1 needs for local transportation. 
The continuation of this pattern of heavy futures activity during 
periods when it was light in previous years indicates that the business 
patterns of the cotton market have changed on a more or less permanent 
basis. Therefore, another motor vehicle is needed for the AMS Memphis 
Cotton division complex in order to continue to provide customers with 
the responsive and expeditious futures certification services they have 
come to expect.
                       international market news
    Mr. Skeen. You are requesting an increase of $320,000 to expand 
reporting in foreign markets to include South and Central America and 
the Pacific Rim countries. You state this proposal goes beyond the 
information currently gathered by attaches. Tell the Committee, first 
what information the attaches now collect and provide, and second, how 
the information you propose to collect and provide will be different.
    Response. Attaches primarily gather information on inventory 
levels, production, outlook, analysis, consumption levels, trade 
policies, and marketing opportunities. Reports are released on a 
varying schedule depending on commodity and country, as well as on a 
monthly or annual basis. The information AMS proposes to collect and 
disseminate will be time-sensitive, based on actual market transactions 
and trading volume levels. Our market reports will be disseminated on a 
regularly scheduled basis, some daily or weekly, to provide essential 
and timely information to U.S. producers on foreign market prices and 
volumes traded. This regularly reported data will be more useful to 
U.S. exporters in their day to day decision-making on when and where to 
market their products, whereas the FAS data provides general trade 
opportunity information for longer-range planning.
                     market concentration reporting
    Mr. Skeen. I read in the budget justifications where over 75 
feedlots and major packers in five states have agreed to begin 
reporting the terms of sale for cattle traded under captive supply 
arrangements in their market areas. How many feedlots and major packers 
are there in total?
    Response. There are over 450 feedlots and 10 major packers in the 
five states.
                    marketing services--staff-years
    Mr. Skeen. Three states, New Jersey, Utah, and West Virginia 
receive marketing services funding only with no associated staff-years. 
Why is this?
    Response. The funds utilized did not equate to a whole staff-year.
                             adp purchases
    Mr. Skeen. What is the total amount your agency spent on ADP 
purchases in fiscal year 1996? What do you plan to spend in fiscal year 
1997 and 1998? Include in this amount all ADP hardware and software 
purchases and support services.
    [The information follows:]

                              ADP PURCHASES                             
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                                               Non-     
                                           Appropriated    appropriated 
------------------------------------------------------------------------
FY 1996.................................            $896          $2,214
FY 1997.................................             735           3,240
FY 1998.................................             855           3,430
------------------------------------------------------------------------

                       federal/state market news
    Mr. Skeen. Provide a list for the record of all states that 
eliminated their market news programs and the amount associated with 
each.
    Response. The following state programs for market news reporting 
have been eliminated:

Livestock and Grain

        State programs                                           Amounts
California....................................................  $455,000
New York......................................................   180,000
Ohio..........................................................    40,000
Washington....................................................    60,000

Fruit and Vegetable

        State programs                                           Amounts
Arizona.......................................................   $25,000
California.................................................... 1,200,000
Maine.........................................................    37,000
New York......................................................   186,000
Washington....................................................    62,000
                         market news home page
    Mr. Skeen. How many accessed your home page in fiscal 1996?
    Response. Although usage statistics were not captured during all of 
fiscal year 1996, the AMS Internet homepage hits averagedapproximately 
7,500 accesses per week, or 390,000 accesses per year. In fiscal year 
1996 the AMS home page contained information about the Market News 
program but was not used for actual delivery of Market News Reports. 
AMS began implementation of an Internet home page for Market News users 
early in fiscal year 1997 and formally announced its availability to 
the public through a news release on February 19, 1997. Over 1,400 
current reports are available with approximately half of them being 
updated each day. Since the system has only been available for about a 
month our statistics are limited, but we expect usage to grow as the 
availability becomes better known and the reports offered expand. The 
most commonly used statistic seen on the Internet to measure usage is 
``hits'' which counts every connection, including moving from one page 
to another within a specific site. During our first three weeks of 
operation we were receiving approximately 75,000 hits per week. 
``Visits'' measures the number of distinct times someone connects to 
the site, although one visit will usually result in several different 
reports being accessed. We have been receiving approximately 250 visits 
per day in our first few weeks of operation.
                        cotton classing database
    Mr. Skeen. I read in the budget justifications where purchasers of 
cotton, primarily merchants and manufacturers, increased their use of 
AMS' central database to obtain classing data by 48 percent in fiscal 
year 1996. What was the reason for this increase in data usage?
    Response. The increase in data usage was because many domestic 
textile mills have discontinued use of their own High Volume 
Instrument--HVI--laboratories and rely on AMS classification data for 
use in their production processes. This heavy reliance on AMS HVI data 
by the mills has also resulted in an increase in the usage of the AMS 
central database of cotton classification statistics by suppliers, 
merchants, and shippers. The mills also receive data from the central 
database either as a spot check to authenticate data received from 
other sources, or to obtain the data when it is not available from 
other sources. In 1992, interested parties accessed statistics on 2.7 
million bales. So far, in the 1996 crop year they have accessed 15.5 
million bales.
                          cotton classing fees
    Mr. Skeen. What is a voluntary central agent and why is there a 
five cent per sample discount if cotton producers are billed through 
them?
    Response. A voluntary central agent is a gin or warehouse that 
collects the cotton classification services user fee from the cotton 
producers. Since billing and collecting from approximately 1,200 gins 
and warehouses is more economical for AMS than billing and collecting 
from approximately 40,000 producers, a discount of five cents per bale 
is given to the gins and warehouses.
                  quality through verification program
    Mr. Skeen. Describe for the record the Quality Through Verification 
program used to grade processed fruits and vegetables that was 
developed by your agency.
    Response. AMS Quality Through Verification--QTV--program is a new 
service currently in the ``pilot'' phase. QTV provides a voluntary, 
user-fee, audit-based inspection service for producers of processed and 
minimally processed fruits and vegetables and other commodities. QTV 
empowers firms to apply science-based hazard analysis critical control 
point, or HACCP, principles to identify hazards in their food 
manufacturing processes and take steps to reduce or eliminate risks 
associated with these hazards.
    Under QTV, AMS reviews and assesses a firm's documented food safety 
and food quality QTV plan. After a plan meets QTV program requirements, 
AMS uses on-site audits to determine the effectiveness of a firm's 
implementation of its plan. AMS auditors review records, observe and 
interview employees, conduct pre-operation sanitation inspection, and 
follow a specialized checklist to confirm that the company is following 
its QTV plan. Only companies that are able to meet existing good 
manufacturing and sanitation practices and demonstrate that they are 
following the HACCP-based techniques called for in their QTV plan are 
qualified to be in the program. QTV provides for reduced audit costs 
where a facility has established a documented and verified food safety 
and quality history. Quality grading of processed fruits and vegetables 
may be covered under a firm's QTV plan although it is not a mandatory 
component of the program.
    Currently, several firms are participating at various levels of 
development in the pilot phase. Firms in the pilot phase meeting all 
program requirements may use a new official Department of Agriculture 
mark, ``PROCESS VERIFIED.'' The PROCESS VERIFIED mark tells commercial 
buyers and consumers that USDA has been monitoring the manufacturer's 
performance under QTV. All participants in the QTV pilot phase are 
producers of fresh-cut produce except one.
                     quality and sanitation audits
    Mr. Skeen. I read where AMS is doing quality and sanitation audits 
for a major food service business. Is this a new line of work for you?
    Response. Working with quality and sanitation audits for major food 
service business is not a new line of work for AMS. Sanitation audits 
are authorized by the Agricultural Marketing Act of 1946, and AMS has 
been performing sanitation inspections of dairy processing facilities 
for many decades. AMS' Processed Fruit and Vegetable Grading program 
begin conducting quality and sanitation audits for a major food service 
company in June 1990, and a second company audit began in July 1996.
                      plant variety protection act
    Mr. Skeen. Provide a table for the Plant Variety Protection Act 
that shows the number of applications received, the number of 
applications pending action, the number or applications approved, the 
number of certificates issued, and the number that expired for fiscal 
years 1995 and 1996.
    [The information follows:]

------------------------------------------------------------------------
                                                        Fiscal year--   
                                                   ---------------------
                                                       1995       1996  
------------------------------------------------------------------------
Applications:                                                           
    Received......................................        324        408
    Pending at end of year........................        740        870
Certificates:                                                           
    Issues \1\....................................        189        228
    Expired or Abandoned..........................        101         92
------------------------------------------------------------------------
\1\ If applications are approved, certificates are issued.              

            international carriage of perishable foodstuffs
    Mr. Skeen. Compliance with the Agreement on the International 
Carriage of Perishable Foodstuffs is mandatory in Europe and voluntary 
in the United States. What impact, if any, has this had on the export 
of U.S. perishable commodities.
    Response. Except for one incident in 1994, there has been no 
impact. In 1983 the United States declared under article 10 ``The 
Agreement does not apply to carriage in the United States of America 
and its territories.'' While France and Italy filed formal objections 
to this declaration in 1984 and other European countries supported 
their position, there has generally been no impact on exports of U.S. 
frozen food and chilled beef, pork, poultry, dairy, and seafood 
products covered by the Agreement.
    Under article 5 of the Agreement, U.S. perishable commodities 
transported in ocean containers are exempt. Air cargo shipments of U.S. 
perishable commodities are not covered by the Agreement, except when 
they are transported from European airports by highway to a third 
country. Notwithstanding the exemption of U.S. air cargo from the 
Agreement, an incident occurred 3 years ago. In February 1994, the 
French government, without warning, implemented a ban on U.S. seafood, 
closed certain airports to seafood imports, and then required stringent 
sanitary inspections. This action was in response to rioting French 
fisherman, who were angered by low prices and the large volume of 
imports during the Lenten season. Delays inherent in the new inspection 
procedures spoiled fresh seafood that had just landed and effectively 
blocked most imports. After an international outcry and pressure from 
the U.S. government, U.S. exporters, and French importers, and other 
governments, the French government reduced the inspection burden and 
reopened airports. Seasonal demand for imported product, however, had 
subsided by that time.
                  voluntary certification of equipment
    Mr. Skeen. How many voluntary certifications of U.S. manufactured 
equipment exported to Europe has AMS issued?
    Response. Since 1986, AMS has issued 240 voluntary certifications 
of U.S. manufactured equipment to Europe. One hundred and forty-two 
refrigerated trailers were exported to Greece, eighty-five were 
exported to Turkey, and thirteen were exported to Denmark.
                      bulk grain facilities study
    Mr. Skeen. AMS has entered into a cooperative agreement with the 
U.S. Feed Grains Council to study bulk grain facilities in Malaysia and 
Singapore. When do you expect this study to be completed?
    Response. This study should be completed by May 1997. We have been 
working with the U.S. Feed Grains Council to examine port grain handing 
and distribution problems in the developing grain markets in Asia. Due 
to the rapid increase of income and the demand for meat, feed grains 
exports to Indonesia and several other Asian nations have been rising 
in recent years.
    Unfortunately, some of these countries lack adequate port 
facilities to handle large-size ocean vessels efficiently.
    To take advantage of the significant economies of scale in bulk 
ocean shipping, the U.S. Exporters prefer to use large vessels. Also, 
U.S. feed grain exporters are highly interested in examining options 
for improving grain handling in order to reduce transportation costs. 
AMS and the U.S. Feed Grains Council recently conducted a study of the 
gain ports in Indonesia. This report will include an overview of 
current problems, identify specific infrastructure needs, and evaluate 
prospects for improvement.
                               jones act
    Mr. Skeen. What were the findings and recommendations of your 
research on the impact of Jones Act restrictions on the movement of 
feeder cattle from Hawaii to the mainland and on the movement of feed 
to North Carolina livestock producers?
    Response. We have a research project underway addressing that 
subject. We will make the results available when the report is 
completed later this year.
                         rail line abandonments
    Mr. Skeen. What were the results of your analysis of the scope and 
impact of rail line abandonments on railroad service to rural areas?
    Response. Among the principal findings of a recent cooperative 
study of the ``Impacts of Rail Restructuring on Agriculture and Rural 
America'' between AMS and the Upper Great Plains Transportation 
Institute at North Dakota State University were the following:
    Railroads have filed for abandonment on nearly 43,000 miles of rail 
line since 1980. More than 37,000 miles of that total were approved for 
abandonment, with more than 33,000 miles actually being abandoned 
during that time frame.
    The difference between mileage granted and actually abandoned, 
approximately 4,500 miles, represent miles taken over by short line 
railroads since 1980 that are still in use.
    For the most part, abandonment has occurred in transportation 
competitive regions much more extensively than it has in regions with 
few transport options. Transportation competitive States such as Iowa 
and Illinois had large amounts of abandonments, while States with 
little transportation competition such as Arizona, Colorado, New 
Mexico, Nevada, and Wyoming had very few miles abandoned.
    In factoring short line sales with the difference between miles 
granted and those abandoned, it is apparent that line sales to short 
line railroads have been used more in States with little transportation 
competition.
    Abandonment is often the results of rather than the cause of 
economic decline in rural communities. Nonetheless, abandonment has had 
a significant impact on many rural communities. These impacts have 
included:
          increased transportation costs to shippers;
          highway and road deterioration;
          increased highway user cost;
          reductions in rural personal income and gross business 
        volume;
          unemployment;
          reductions in local tax revenues; and
          reduced economic development opportunities.
                             rural bridges
    Mr. Skeen. What were the findings of the analysis of the adequacy 
of the rural bridges in the U.S. and what are the plans, if any, to 
address these findings.
    Response. During fiscal year 1996, the USDA released a series of 
reports that assessed the condition of rural roads and bridges, and 
analyzed financing and management issues relevant to local road 
administrators. Using 1994 Federal Highway Administration data on 
bridges, the reports showed that 23.3 percent of all county-maintained 
bridges and 12.7 percent of the town bridges were in intolerable 
condition and were classified as having a high priority for 
replacement. About 32 percent of all county bridges and almost 28 
percent of all town bridges were classified as ``structurally 
deficient''--a condition indicating that the bridge has some structural 
components needing repair. Local highway departments are facing many 
challenges in finding ways to finance bridge repairs. Declining rural 
populations have reduced tax revenues that could fund local 
infrastructure improvements. Federal assistance covering a 6-year 
period beginning in 1992 and ending in 1997 for road and bridge 
improvements was authorized by the Intermodal Surface Transportation 
Efficiency Act, or ISTEA. Because the ISTEA is due to be renewed, state 
highway officials and local road administrators will be competing with 
other public transportation and urban highway programs for Federal 
improvement funds. AMS designed this series of reports to present 
government officialsat all levels with information on the rural road 
and bridge needs of rural communities during the debate over renewal of 
ISTEA.
                      merchant development program
    Mr. Skeen. Describe in further detail the Merchant Development 
Program?
    Response. In 1996 AMS sponsored a wholesale market project with the 
Avenue Market Corporation in Baltimore to enable minorities to start 
businesses in the local market. The program includes eight weeks of 
formal training, and 1\1/2\ years of mentoring by merchants who are 
operating businesses in the market. The objective is to develop a 
publication for use by other markets across the country to replicate 
this program. AMS sponsored ten candidates for training of which seven 
completed the formal training and are operating food businesses in the 
Avenue Market in Baltimore.
                   northeast interstate dairy compact
    Mr. Skeen. What is the status of the Northeast Interstate Dairy 
Compact?
    Response. The Northeast Interstate Dairy Compact has been 
challenged in court by the Milk Industry Foundation, which last fall 
requested a preliminary injunction to block the implementation of the 
Compact. An opinion from the U.S. District Court for D.C., issued 
December 11, 1996, denied the request for an injunction, but commented 
on ``deficiencies'' in the Secretary's findings concerning compelling 
public interest. The Court stated that the Secretary failed to explain 
how the comments received supported a finding of compelling public 
interest in the Compact region, and stated that MIF would likely 
succeed on the merits of the case. At the time of the decision, the 
proceeding was on course to be briefed, with oral argument to follow. 
The Justice Department filed a motion to stay the proceeding for the 
purpose of filing an amplified decision supporting the Secretary's 
finding of compelling public interest. A 45-day stay was ordered by the 
Court to allow the Secretary time to review the administrative record 
from a fresh perspective, reach a conclusion to the existence of a 
compelling public interest, and provide a reasoned explanation. In 
addition to the amplified decision due March 20, briefs are due in 
April, and oral argument is scheduled for May on the question of 
whether the court will find the Secretary's action illegal.
    In the meantime, the Compact Commission has been formed, held 
meetings, set up committees, and appointed an executive director. The 
Commission held hearings to consider comments relative to determining 
an administrative assessment, and set that amount at $0.015 cents per 
hundredweight of fluid milk, effective for December 1996 Class I milk.
          business process reengineering for marketing orders
    Mr. Skeen. The Marketing Order Administration Branch is conducting 
a business process re-engineering project and expects to realize 
considerable cost savings as a result. What was the outcome of this 
project?
    Response. The Marketing Order Administrative Branch, or MOAB, is 
implementing numerous recommendations developed as part of its Business 
Process Re-engineering, or BPR, project. The project involved an in-
depth analysis of all its processes but focused on improvements in the 
administration of marketing orders. MOAB employees and industry 
representatives were active participants in the BPR study. Key 
recommendations of the study included increasing efficiencies and 
timeliness by streamlining processes and eliminating unnecessary levels 
of review, redefining employee responsibilities to ensure that services 
are delivered when needed, and improving internal and external customer 
satisfaction and working relationships. Over time we expect to 
reallocate resources and funds to reflect the streamlining and 
restructuring and to improve timeliness and enhance the quality of 
service provided to customers.
                       pistachio marketing order
    Mr. Skeen. What is the status of the new marketing order to cover 
pistachios grown in California, Arizona, Utah, and Nevada?
    Response. The proposed new marketing order covers the four states 
you mentioned and New Mexico. On August 20-23, 1996, the Department 
conducted a promulgated hearing to consider the new marketing order. 
Briefs on the hearing record were due by October 31. The Department is 
reviewing the hearing record and the three briefs received. If the 
record supports a proposed program, the next step would be for the 
Department to issue a Recommended Decision and provide an opportunity 
for public comment. If the comments received are favorable the 
Secretary would issue a referendum order. Approval by a two-thirds or 
larger majority of the number of producers or volume of production 
represented in a referendum is required before the program could be 
established. The proposed program wouldestablish mandatory quality and 
inspection requirements and would include authority for container, 
pack, and labeling requirements. If implemented, a 10-member 
administrative committee, with an alternate for each member, would 
locally administer the order.
                   the organic certification program
    Mr. Skeen. The Organic Foods Production Act of 1990 required the 
Secretary to establish and implement a program to certify organic 
production. Mr. Hatamiya, you are requesting a $505,000 increase in 
1998 to continue the implementation of this program. What is the value 
of the organic industry today?
    Reponse. The value of the organic industry is difficult to 
estimate. According to the trade press, the rate of growth in sales of 
organic products has been quite high in recent years. Sales of $2.8 
billion were reported for 1995 and $3.4 billion for 1996 based upon a 
growth rate of 22.6% which was reported in the Natural Foods 
Merchandiser.
    Mr. Skeen. Will all organic producers and handlers have to be 
certified under this program?
    Response. No, the Organic Foods Production Act allows for producers 
and handlers selling less than $5,000 in value of agricultural products 
to be exempt from the certification requirements of the program. We 
also will be evaluating exemptions for certain types of handlers who do 
not process an organic product.
    Mr. Skeen. How many of them are there?
    Response. We estimate that there are approximately 4,050 organic 
producers in the U.S. It is unclear how many organic producers and 
handlers will be selling less than $5,000 in value of agricultural 
products at the time of program implementation.
    Mr. Skeen. The original intent of the law is that once the program 
is established, it will become self-sufficient through user fees. Was 
it the intent of the law that AMS's costs to monitor and provide 
oversight to the program be included in those fees?
    Response. The Organic Foods Production Act of 1990 allows for the 
collection of reasonable fees from producers, certifying agents and 
handler who participate in the organic program. We believe that the 
intent of the law is the same as our goal of recovering all costs of 
the program from fees charged. However, because the program is just 
beginning, we are uncertain of the number of applicants. With that in 
mind, we are unsure whether appropriations will be needed to offset 
some of the cost of the program over the next several years. Once the 
program is fully underway, we will reassess our ability to recover all 
costs from fees.
    Mr. Skeen. How much will it cost annually to carry out this 
program?
    Response. We expect the budget request of $1,,005,000 for FY 1998 
will be sufficient to operate the program through issuance of the final 
rule.
    Mr. Skeen. How much do you expect to collect in fees?
    Response. The ultimate goal is that the program will become self-
sufficient. Due to the uncertainly of the number of applicants and the 
fees that will be charged, we cannot provide an estimate of how much 
will be collected in the early phase of program operation.
                                g.p.r.a.
    Mr. Skeen. GPRA, known as the Results Act, requires each executive 
agency to issue, no later than September 30, 1997, a strategic plan 
covering at least five years. In addition to a mission statement 
grounded in legislative requirements, the plans are to contain general 
goals and objectives that are expected to be outcome or results 
oriented (such as to improve literacy) as opposed to output or activity 
oriented (such as to increase the number of education grants issued).
    What progress is the agency making in developing its strategic 
plan, including defining its mission and establishing appropriate 
goals?
    Response. We published our first strategic plan on June 5, 1996. It 
includes an agency mission statement and establishes goals.
    Mr. Skeen. Has the agency identified conflicting goals for any of 
its program efforts? If so, what are the performance consequences of 
these conflicting goals and what actions--including seeking legislative 
changes--are the agency taking to address these conflicts?
    Response. We have not identified any conflicting goals.
    Mr. Skeen. Strategic plans must be based on realistic assessments 
of the resources that will be available to the agency to accomplish its 
goals. As you are developing your strategic plan, how are you taking 
into account projected resources that likely will be available--
especially as we move to a balanced budget? What assumptions are you 
making? How are you ensuring that your goals are realistic in light of 
expected resources?
    Response. Seventy-six percent of AMS' budget is financed from fees 
for mostly voluntary services. Our customers closely monitor the cost 
of our services. Therefore, our strategic goals are focused on 
improving services in fee programs as well as appropriated programs in 
a cost-effective and efficient manner without greatly increasing the 
resources needed. Generally, we should be able to operate within our FY 
1998 budget request.
    Mr. Skeen. For Congress, the heart of the Results Act is the 
statutory link between agency plans, budget requests, and the reporting 
of results. Starting with fiscal year 1999, agencies are to develop 
annual performance plans that define performance goals and the measures 
that will be used to assess progress over the coming year. These annual 
goals are to measure agency progress toward meeting strategic goals and 
are to be based on the program activities as set forth in the 
President's budget.
    What progress have you made in establishing clear and direct 
linkages between the general goals in your strategic plan and the goals 
to be contained in your annual performance plans? OMB expressed concern 
last year that most agencies had not made sufficient progress in this 
critical area.
    Response. AMS' broad range of marketing-related activities are 
reflected in our necessarily broad goals. However, we have established 
linkages between these general strategic planning goals, our annual 
performance goals, and our budget activities.
    Mr. Skeen. More specifically, how are you progressing in linking 
your strategic and annual performance goals to the program activity 
structure contained in the President's budget? Do you anticipate the 
need to change or modify the activity structure to be consistent with 
the agency's goals?
    Response. The program activity structure in the President's budget 
is consistent with the agency's strategic goals.
    Mr. Skeen. Overall, what progress has your agency made--and what 
challenges is it experiencing--defining results-oriented performance 
measures that will allow the agency and others to determine the extent 
to which goals are being met?
    Response. We have had some difficulty in defining results-oriented 
performance measures because of the enormous customer base for services 
related to agricultural marketing--the whole marketing chain, from 
producers through processors, wholesalers, retailers, and consumers. 
However, we continue to work to define meaningful performance measures. 
It is a process of evaluation; as we learn, we will be able to make 
improvements.
    Mr. Skeen. If applicable, what lessons did the agency learn from 
its participation in the Results Act pilot phase and how are those 
lessons being applied to agency-wide Results Act efforts? What steps is 
your agency taking to build capacity (information systems, personnel 
skills, etc.) necessary to implement the Results Act?
    Response. AMS did not participate in the Results Act pilot phase.
    Mr. Skeen. The Results Act requires agencies to solicit and 
consider the views of stakeholders as they develop the strategic plans. 
Stakeholders can include state and local governments, interest groups, 
the private sector, and the general public,among others. Who do you 
consider to be your agency's primary stakeholders and how will you 
incorporate their views into the strategic plans?
    Response. AMS stakeholders include agricultural producers, food 
processors, wholesalers, retailers, distributors, importers and 
exporters, agricultural associations, consumers, food procurement 
officials for institutions, and other government agencies. Since our 
mission is to improve agricultural marketing, each activity has its own 
stakeholder(s). We have already begun to incorporate their views into 
our strategic plans. We sent surveys to over 16,000 customers from our 
Market News, Standards, Grading, and Certification, Commodity 
Procurement, Research and Promotion, and Fair Trade and Orderly Markets 
service areas, and received responses from nearly 27%. The survey 
questions were developed as customer service standards to help AMS 
determine whether it is meeting its customers' needs and expectations. 
We are using the results of the survey to establish a baseline that 
will help us to determine how to provide better service to our 
customers in the future.
    Mr. Skeen. For the Results Act to be successful, agencies with 
similar missions, goals, or strategies will need to ensure that their 
efforts are coordinated. What other federal agencies are you working 
with to ensure that your strategic plans are coordinated? What steps 
have you taken to ensure that your efforts complement and do not 
unnecessarily duplicate other federal efforts?
    Response. AMS is coordinating its strategic planning with other 
agencies in the Marketing and Regulatory Programs mission area. We are 
also working with the Food and Consumer Service and the Farm Service 
Agency on purchasing and delivery improvements for Section 32 
commodities, and the Foreign Agricultural Service to ensure that our 
international marketing activities do to conflict with, or duplicate, 
their activities.
    Mr. Skeen. The Results Act requires agencies to consult with 
Congress as they develop their strategic plans. Since these plans are 
due in September, now is the time for agencies to begin the required 
consultations. What are your plans for Congressional consultation as 
you develop your strategic plan? Which Committees will you consult 
with? How will you resolve differing views?
    Response. All USDA Mission Areas/Agencies have prepared draft 
Strategic Plans which are currently being reviewed by an Under /
Assistant Secretary (or other relevant official), the Senior Policy 
Staff and the Secretary, and will subsequently be reviewed by OMB. Upon 
completion of the review, the Department plans to provide copies of the 
Strategic Plan (including an overall Department wide Executive Summary 
and the Strategic Plans for individual Mission Areas/Agencies) to 
relevant congressional Committees. Thereafter, we will look forward to 
meeting with Members or Staff to discuss our Strategic Plan and to 
solicit their input and advice on refinements to that Plan. We plan to 
provide copies of the Department Strategic Plan to the following 
Committees:
          House Agriculture Committee;
          House Appropriations Committee;
          House Economic and Educational Opportunities Committee;
          House Government Reform and Oversight Committee;
          House Resources Committee;
          Senate Agriculture, Nutrition, and Forestry Committee;
          Senate Appropriations Committee;
          Senate Energy and Natural Resources Committee; and
          Senate Governmental Affairs Committee.
    Mr. Skeen. In passing the Results Act, Congress sought to 
fundamentally change the focus of federal management and decision 
making to be more results-oriented. Organizations that have 
successfully become results-oriented typically have found that making 
the transformation envisioned by the Results Act requires significant 
changes in what they do and how they do it.
    What changes in program policy, organization structure, program 
content, and work processes has the agency made to become more results-
oriented?
    Response. Because of our heavy reliance on user-financing, we 
operate more like a business than most agencies so that we can provide 
cost-effective services. In the vast majority of our programs, our 
ability to continue operations depends solely on the earnings we 
generate, mostly from customers who are under no obligation to ``buy'' 
our services. Our corporate culture influences how we operate 
appropriated programs as well as user-funded activities. Under the 
Results Act, we are working to further strengthen our work processes to 
become more results oriented through our customer survey and business 
process reviews.
    Mr. Skeen. How are managers held accountable for implementing the 
Results Act and improving performance?
    Response. Managers are held accountable for improving performance 
through performance evaluation elements.
    Mr. Skeen. How is the agency using Results Act performance goals 
and information to drive daily operations?
    Response. AMS is already using its performance goals to improve 
daily operations. For example, to provide high quality service in a 
cost-effective manner, we have completed and are implementing the 
recommendations of business process reengineering studies of our market 
news, commodity procurement, meat grading, marketing order, and 
Perishable Agricultural Commodities Act programs. Also, to tailor and 
focus agency services to better facilitate strategic marketing of U.S. 
agricultural products in international markets, we are reorienting our 
market news, standardization and grading activities to include 
international as well as domestic markets.
                  dairy marketing order consolidation
    Ms. Kaptur. The Department's November 1996 ``Preliminary Report on 
Order Consolidation,'' lists seven criteria for consolidation: 
overlapping route disposition; overlapping areas of milk supply; number 
of handlers in a market; natural boundaries; cooperative association 
service areas; features common to existing orders; and milk utilization 
in common dairy markets. How were the consolidation criteria developed? 
Was there a statutory basis of legislative history for them? Will these 
criteria be applied uniformly across the nation?
    Response. The authorizing legislation for the Federal milk order 
program does not contain criteria for determining marketing areas. The 
consolidation criteria we have suggested have been developed on the 
basis of knowledge acquired over the course of 60 years of 
administering the program. They reflect the market conditions that tend 
to make mergers necessary or desirable to maintain orderly marketing 
conditions.
    Following are detailed descriptions of the consolidation criteria 
for the record.
                         consolidation criteria
    Overlapping route dispositions.--The movement of packaged milk 
between Federal orders indicates that plants from more than one Federal 
order are in competition with each other for Class I sales. In 
addition, a degree of overlap that results in the regulatory status of 
plants shifting between orders creates disorderly conditions in 
changing price relationships between competing handlers and neighboring 
producers.
    Overlapping areas of milk supply.--The location of a plant's milk 
supply indicates the competitive nature of the milk supply. The pooling 
of milk produced within the same procurement area under the same order 
allows for uniform pricing of producer milk.
    Number of handlers in a market.--Formation of larger-size markets 
is a stabilizing factor. Shifts of milk and/or plants between markets 
becomes less of a disrupting factor in larger markets. Also, the 
existence of Federal order markets with handlers too few in number to 
allow meaningful statistics to be published without disclosing 
proprietary information should be avoided.
    Natural boundaries such as mountains and deserts often affect the 
placement of marketing area boundaries.--Such barriers discourage 
movement of raw milk between areas, and generally reflect a lack of 
population (that limits the range of the consumption area) and lack of 
milk production. For the purposes of market consolidation, large 
unregulated areas and political boundaries are considered a type of 
natural barrier.
    Cooperative association service areas.--While not a criterion used 
initially to determine marketing area, cooperative membership may be an 
indication of market association. Given the need to consolidate orders, 
cooperative membership can provide additional support for combining 
certain marketing areas.
    Features common to existing orders, such as similar multiple 
component pricing payment plans.--Markets that already have agreed on 
similar regulatory provisions may have a head start on the 
consolidation process. Where different payment plans exist in markets 
suggested for consolidation, it will be necessary to determine a common 
payment plan for the consolidated order.
    Milk utilization in common dairy products.--Utilization of milk in 
similar manufactured products (cheese vs. Butter-powder) was 
considered.
    Ms. Kaptur. As you make your order consolidation decisions, what 
role will simplification of the orders play? Have you given 
consideration to proposals to base milk marketing regulation on where 
the processing plant is located rather than on where it sells its milk 
as a means to simplify administration, enforcement, and compliance with 
the consolidated orders?
    Response. Simplification of the orders is one of the goals of the 
consolidation process. In particular, the goal of simplification will 
be pursued in our effort to make the types of provisions common to all, 
or most, orders more uniform and easier to understand and administer.
    As the order areas become larger, it becomes more likely that 
plants will be regulated under the order for the marketing area in 
which they are located. In the first report on suggested 
consolidations, nearly all plants projected to be regulated under the 
suggested consolidated orders were located within the suggested 
marketing order under which they would be regulated.
    The report on suggested identical provisions contains a pool 
distributing plant definition that would regulate under a particular 
order any distributing plant located within the order's marketing area 
that otherwise meets the pooling requirements of its order, unless it 
has over 50 percent of its route dispositions in another order area. In 
addition, specialized plants that bottle primarily ultra-high 
temperature--UHT--products, which are widely distributed, would be 
regulated according to the marketing area in which they are located.
    Ms. Kaptur. What is the Department's position on bringing currently 
unregulated areas under regulation as part of this consolidation?
    Response. In the first report on suggested order consolidation, no 
non-Federally regulated territory was added to current order marketing 
areas if it would have the effect of regulating any currently 
unregulated handlers. In a number of the current orders there are 
unregulated areas currently enclosed by order marketing area, and 
unregulated areas between orders. These ``pockets'' are included in the 
resulting merged marketing areas only if their inclusion does not 
change the current regulatory status of a plant. The requirement to 
consolidate orders was not perceived by the Department as a mandate to 
regulate all currently unregulated areas.
    As the consolidation process proceeds, however, we have received 
requests to include currently-unregulated areas in consolidated orders 
from regulated handlers and producer groups who believe that they are 
disadvantaged by the existence of nearby competitors who are not 
subject to the same regulation. These proposals are being considered.
                            farmers' markets
    Ms. Kaptur. It is my understanding that the biannual Public Market 
Conference which USDA sponsored has been eliminated. Why?
    Response. In 1996, AMS contributed to a Public Market Conference 
held in Philadelphia, PA, in cooperation with Project for Public 
Spaces, Inc. We have been communication with that organization 
concerning a prospective 1998 conference.
    Ms. Kaptur. Please describe your activities in the past fiscal year 
on public and farmers' markets. What new activities do you wish to take 
up in the next fiscal year?
    Response. Following is a list of active projects involving 
farmers', public or urban markets. We anticipate additional requests to 
be submitted for FY 1997 and do not have specific work plans developed 
for FY 1998 projects.

Grove Arcade Public Market Project,            Projected completion FY  
 Asheville, NC.                                 1997.                   
North Market Project, Columbus, OH...........  Completed FY 1997.       
Reading Terminal Farmers' Market Study,        Completed FY 1997.       
 Philadelphia, PA.                                                      
Merchant Development Program, Avenue Market,   Projected completion FY  
 Baltimore, MD.                                 1997.                   
Asseessment of Delaware Direct Market          Completed FY 1997.       
 Operations, Customers Needs and Opinion.                               
Alternative Market Development Study, Sea      Underway.                
 Islands, SC.                                                           
Montgomery, State Farmers' Market Study,       Completed FY 1997.       
 Montgomery, AL.                                                        
Boston Public Market Initiative, Boston, MA..  Underway.                
Farmers' Market Study, St. Paul, MN..........  Underway.                
Public/Farmers' Market Study, Camden, NJ.....  Underway.                
California Farmers' Market Web Site            Underway.                
 Development.                                                           
Findlay Public Market Project, Cincinnati, OH  Underway.                
Direct Marketing Survey......................  Projected completion FY  
                                                1997.                   
                                                                        

    Ms. Kaptur. How are you promoting urban and rural linkages?
    Response. In recent years, the Wholesale Market Development Program 
has shifted its emphasis to include more public and urban markets 
relative to the traditional emphasis on wholesale markets. The Program 
includes wholesale, collection, farmers' and public markets in and near 
metropolitan areas which promote urban and rural linkages by studying 
the improvement of facilities enabling market access by the small- to 
medium-sized grower.
    Ms. Kaptur. What level of funding was provided for planning and 
development of new Farmers' Markets and Public Markets in FY 1997? What 
is proposed for FY 1998?
    Response. AMS costs are not accounted for on an individual project 
basis. However, in FY 1996, approximately one half of the overall 
Wholesale Market budget was spent on the planning and development of 
farmers markets and public markets. The remaining funds were used for 
the improvement of other market facilities, to correct distribution 
problems at facilities and operations, and the development of new 
technologies. The projects for FY 1997 have not yet been awarded, 
however, we anticipate the level of funding for these projects to 
remain fairly constant in FY 1997 and FY 1998. Variations in project 
allocations from year to year are based on the current opportunities 
available, and the number of requests or proposals submitted.

        Grain Inspection, Packers and Stockyards Administration

                    livestock producers' complaints
    Mr. Skeen. Update the table that appears on page 149 of last year's 
hearing record showing the number of complaints received from livestock 
producers to include fiscal year 1996 actuals and fiscal year 1997 
estimates.
    [The information follows:]

Number of investigations by fiscal year

1994..........................................................     2,301
1995..........................................................     2,504
1996..........................................................     2,265
1997 estimated................................................     2,000
                 current statutes and grain facilities
    Mr. Skeen. Update the table that appears on page 152 of last year's 
hearing record showing the number of persons or companies who 
registered under current statutes and the number of grain facilities 
involved in export activities to include 1996.
    Response. The following table provides the number of persons or 
companies who registered under current statutes and the number of grain 
facilities involved in export activities:
    [The information follows:]

             U.S. GRAIN EXPORTERS REGISTERED UNDER THE USGSA            
------------------------------------------------------------------------
                                                                Total   
                     Year                          No. of     facilities
                                                registrants   registered
------------------------------------------------------------------------
1991..........................................           86          509
1992..........................................           89          511
1993..........................................           92          499
1994..........................................           89          462
1995..........................................           96          499
1996..........................................           87          460
------------------------------------------------------------------------

                     grain inspected and/or weighed
    Mr. Skeen. Update the tables that appear on pages 153 through 155 
of last year's hearing record, showing the grains inspected and/or 
weighed for export by country of destination for fiscal year 1996.
    [The information follows:]

[Pages 145 - 147--The official Committee record contains additional material here.]


                         grain dust explosions

    Mr. Skeen. Update the table that appears on page 156 of last year's 
hearing record showing the number of explosions resulting from grain 
dust, including the number of deaths and injuries, to include fiscal 
year 1996.
    Response. The following table reflects the number of explosions 
resulting from grain dust:

------------------------------------------------------------------------
                Year                  Explosions   Injuries     Deaths  
------------------------------------------------------------------------
1992................................           7           6           1
1993................................           4           4           1
1994................................          17          27           1
1995................................          10           6           2
1996................................          15          26           1
------------------------------------------------------------------------

                       exported grain complaints
    Mr. Skeen. Update the table that also appears on page 156 of last 
year's hearing record showing the number of complaints for exported 
grain that you received and the number of open cases to include fiscal 
year 1996 actuals and fiscal year 1997 figures to date.
    [The information follows:]

                               COMPLAINTS                               
------------------------------------------------------------------------
                                                   No. of               
                  Fiscal year                    complaints   Files open
------------------------------------------------------------------------
1992..........................................           21            0
1993..........................................           50            0
1994..........................................           30            0
1995..........................................           28            0
1996..........................................           20            0
1997 (to date)................................           10            6
------------------------------------------------------------------------


[Pages 149 - 151--The official Committee record contains additional material here.]


                    heavy metal testing and analysis

    Mr. Skeen. Equipment for heavy metal analysis has been purchased 
and installed and testing and analysis programs for heavy metals in 
grain was to occur in two phases. Validation for cadmium and lead was 
to be completed by June 1996 with an initial survey of wheat samples by 
August 1996. Work on the second group of metals, mercury, arsenic, and 
selenium will begin as soon as the work on cadmium and lead is 
complete. What is the status of this project?
    Response. Our initial efforts focused on an analytical procedure 
called the slurry method. But the analytical results demonstrated this 
method was not appropriate, due to the variability of results within 
the grain samples and lack of sensitivity. Since then, efforts have 
been redirected, and we are now validating a microwave sample digestion 
procedure, to be used in conjunction with equipment already purchased, 
to detect and quantitate levels of lead and cadmium in grains. The 
microwave sample digestion procedure is automated, rapid, and provides 
the necessary sensitivity. Upon completing the validation of the method 
for lead and cadmium, a wheat survey will be conducted with an expected 
completion date of August 1997. Further evaluation of the microwave 
sample digestion procedure for mercury, arsenic, and selenium will 
continue in FY 1997.
                         aflatoxin inspections
    Mr. Skeen. For the record, please update the table that appears on 
page 162 of last year's hearing record showing the number of aflatoxin 
inspections to include fiscal year 1996.
    Response. We are pleased to provide the following information for 
the record.

Aflatoxin inspections

Fiscal Years:
    1992......................................................    59,372
    1993......................................................    59,901
    1994......................................................    44,758
    1995......................................................    66,096
    1996......................................................    68,190
                           toll free hotline
    Mr. Skeen. In February 1995 your agency established a toll-free 
telephone number to receive violation reports. What is the cost of 
maintaining this hotline? How many calls did you receive in fiscal 
years 1995 and 1996? How many were investigated?
    Response. The cost of maintaining GIPSA's Hotline for reporting 
violations of the United States Grain Standards Act and Agricultural 
Marketing Act is $40.00 per month. During fiscal years 1995 and 1996, 
GIPSA personnel received several inquiries, and one violation report 
via the hotline. We investigated the violation reported. Our onsite 
investigation did not reveal facts substantiating the allegation that 
this facility violated our water prohibition regulations.
                     poultry compliance complaints
    Mr. Skeen. Provide a table that shows the number of poultry 
compliance complaints received in fiscal years 1993, 1994, 1995, and 
1996.
    Response. The number of complaints received during fiscal years 
1993 through 1996 are listed in the following table:

Poultry complaints

Fiscal year:
    1993......................................................        95
    1994......................................................        88
    1995......................................................       104
    1996......................................................        86
                 dealer/order buyer financial failures
    Mr. Skeen. Please update the table that appears on page 163 of last 
year's hearing record showing dealer/order buyer financial failures to 
include fiscal year 1996.
    [The information follows:]

                                      DEALER/ORDER BUYER FINANCIAL FAILURES                                     
----------------------------------------------------------------------------------------------------------------
                                                       No. of    Total owed                 Recovery    Percent 
                    Fiscal year                        dealer    livestock     Recovery    from other    total  
                                                      failures    sellers     from bonds    sources     recovery
----------------------------------------------------------------------------------------------------------------
1990...............................................         15   $4,196,168     $655,700     $733,288         33
1991...............................................         16    2,723,204      499,174      158,700         24
1992...............................................         23    2,137,276      565,562       43,263         28
1993...............................................         17    2,663,023      494,249       12,000         19
1994...............................................         27    8,137,762    1,125,276      140,380         16
1995...............................................         15    1,699,739      350,452       77,684         25
1996...............................................         10    4,277,688      283,212    1,462,236         41
----------------------------------------------------------------------------------------------------------------

                     four-firm concentration ratio
    Mr. Skeen. Also, update the following table showing the four-firm 
concentration ratio for steer and heifer slaughter, boxed beef, sheep 
and lamb slaughter, and hog slaughter to include data for 1995 and 
1996.
    Response. Following is an update table to include information 
requested for 1995. Data for 1996 is not available at this time.

    FOUR-FIRM CONCENTRATION IN MEAT PACKING REPORTING YEARS 1980-1995   
------------------------------------------------------------------------
                                Steers                                  
            Year                 and       Boxed       Hogs    Sheep and
                               heifers      beef                 lambs  
------------------------------------------------------------------------
1980........................         36         53         34         56
1981........................         40         57         33         53
1982........................         41         59         36         44
1983........................         47         60         29         34
1984........................         50         62         35         49
1985........................         50         62         32         51
1986........................         55         67         33         54
1987........................         67         80         37         75
1988........................         70         79         34         77
1989........................         70         79         34         74
1990........................         72         79         40         70
1991........................         74         79         42         77
1992........................         78         81         44         78
1993........................         80         83         44         75
1994........................         81         86         44         76
1995........................         81         84         46        72 
------------------------------------------------------------------------
Note.--All figures for years 1980 through 1994 are based on firms'      
  fiscal years as reported to GIPSA. Figures for 1995, except boxed     
  beef, are based on calendar year Federally-inspected slaughter.       

                        auction market failures
    Mr. Skeen. Please update the table that appears on page 164 of last 
year's hearing record showing the number of auction market failures, 
the amount owed for livestock each year, and the amount recovered from 
bonds and other sources during each year to include fiscal year 1996.
    [The information follows:]

                                             AUCTION MARKET FAILURES                                            
----------------------------------------------------------------------------------------------------------------
                                                       No. of                                                   
                                                      auction    Total owed    Recovery     Recovery    Percent 
                    Fiscal year                        market    consignors   from bonds   from other    total  
                                                      failures                              sources     recovery
----------------------------------------------------------------------------------------------------------------
1990...............................................          5     $820,664     $239,748     $135,228         46
1991...............................................          3      200,958      168,561       30,758         99
1992...............................................         11      567,927      457,367       55,528         90
1993...............................................          4      123,191      118,651        1,330         97
1994...............................................          6      476,606      274,882            0         58
1995...............................................          6      747,344      308,380           37         41
1996...............................................          3      343,508      220,123            0         64
----------------------------------------------------------------------------------------------------------------

                          livestock slaughter
    Mr. Skeen. Update the table that appears on page 164 of last year's 
hearing record, showing what percentage of the livestock that is 
slaughtered annually comes from captive supplies and/or forward 
contracts to include fiscal year 1995 actuals and fiscal year 1996 
estimates.
    Response. Each year Packers and Stockyards Programs (P&SP) obtains 
a special report from the 15 largest steer and heifer slaughterers to 
determine what percentage of their slaughter needs are met using cattle 
obtained from packer feeding operations, forward contracts, and 
marketing agreements. The following table provides the data except for 
1996, which is not yet available.

                                           STEER AND HEIFER SLAUGHTER                                           
----------------------------------------------------------------------------------------------------------------
                                                                   Total                                        
                                                                   comm.       Top 15       Forward             
                              Year                               slaughter     firms       contract    Total \1\
                                                                   (mil.    (percentage  (percentage)           
                                                                   head)      of total                          
----------------------------------------------------------------------------------------------------------------
1988...........................................................       28.1          84          10.1        19.1
1989...........................................................       26.2          90          11          22.4
1990...........................................................       26.7          87           8.2        18.9
1991...........................................................       26.5          90           5          17.2
1992...........................................................       26.3          92           7.8        19.5
1993...........................................................       26.6          94           4.9        17.4
1994...........................................................       27.6          96           4.5        20.5
1995...........................................................       28.7          94           4.5        21.1
1996...........................................................      (\2\)       (\2\)       (\2\)         (\2\)
----------------------------------------------------------------------------------------------------------------
\1\ Includes packer-fed cattle acquired through forward contracts and marketing agreements.                     
\2\ Not available.                                                                                              

                  slaughtering and processing packers
    Mr. Skeen. Would you please update the table that appears on pages 
164 and 165 of last year's hearing record showing the number of 
slaughtering and processing packers subject to the Packers and 
Stockyards Act to include fiscal year 1996.
    [The information follows:]

         SLAUGHTERERS AND PROCESSORS SUBJECT TO THE P&S ACT \1\         
------------------------------------------------------------------------
                                    Bonded      Non-bonded   Processing-
              Year               slaughtering  slaughtering  only plants
                                   firms \2\    plants \3\       \4\    
------------------------------------------------------------------------
1986...........................          691           892         4,807
1987...........................          634           849         4,743
1988...........................          638           807         4,645
1989...........................          619           801         4,512
1990...........................          574           721         4,402
1991...........................          585           683         4,415
1992...........................          561           626         4,352
1993...........................          509           606         4,355
1994...........................          482           573         4,258
1995...........................          470           576         4,202
1996...........................          433           545         4,229
------------------------------------------------------------------------
\1\ Data are not available on the number of non-federally inspected, non-
  bonded slaughtering plants and processing-only plants subject to the  
  P&S Act.                                                              
\2\ Includes all firms operating federally-inspected (FI) and non-      
  federally-inspected (NFI) plants that are bonded by the Packers and   
  Stockyards Program, Grain Inspection, Packers and Stockyards          
  Administration (GIPSA). The P&S Act requires firms with purchases of  
  $500,000 or more to be bonded and file annual reports with GIPSA. Some
  firms with smaller volumes of purchases are voluntarily bonded and are
  included in this column, but do not file annual reports.              
\3\ This column is an estimate of the number of non-bonded slaughter    
  firms (operating FI plants) subject to P&SP regulation that are not   
  required to be bonded because they purchase less than $500,000 of     
  livestock per year. Includes slaughtering plants that also do         
  processing. May include plants operated by voluntarily-bonded firms   
  included in the first column that are too small to file reports with  
  P&SP, GIPSA. Excludes NFI plants.                                     
\4\ Firms that conduct processing-only operations are not required to be
  bonded. Excludes NFI plants.                                          

                           custodial accounts
    Mr. Skeen. Update the table that appears on page 165 of last year's 
hearing record showing the number of compliance audits conducted on 
custodial accounts, the number of markets with shortages, the total 
dollars involved, and the amount restored to include fiscal year 1996.
    [The information follows:]

                                       CUSTODIAL ACCOUNT COMPLIANCE AUDITS                                      
----------------------------------------------------------------------------------------------------------------
                                                                               No. of                           
                                                                    No. of    markets      Total        Amount  
                           Fiscal year                              audits      with     amount of     restored 
                                                                             shortages   shortages              
----------------------------------------------------------------------------------------------------------------
1993............................................................        555        199   $7,207,073   $3,767,759
1994............................................................        563        157    5,398,181    3,833,025
1995............................................................        700        185    7,112,936    4,265,410
1996............................................................        517        170    5,479,852    3,699,905
----------------------------------------------------------------------------------------------------------------

                 proper care and handling of livestock
    Mr. Skeen. At the time of last year's hearing, your agency was 
considering establishing guidelines for the proper care and handling of 
livestock under the provisions of the Packers and Stockyards Act. What 
is the status of this proposal?
    Response. Proposed guidelines for the care and handling of 
livestock at stockyards were published in the Federal Register for 
comments in May 1996. As a result of the comments received and recent 
ruling by the Department's Judicial Officer concerning the handling of 
a disabled cow at an Arizona livestock auction, we are reviewing the 
proposed guidelines to determine an appropriate course of action. The 
Judicial Officer's decision states that nothing in the P&S Act is 
designed to prevent injury or suffering apart from the effect that the 
injury or suffering may have on competition, trade, producers, 
purchasers, consumers, or other persons the P&S Act is designed to 
protect.
                            agency resources
    Mr. Skeen. Please update the table that appears on page 165 of last 
year's hearing record showing the amount of funds spent on payment 
protection, livestock marketing, competition and conflicts-of-interest, 
meat marketing, scales and weighing, drug residues, and poultry to 
include fiscal year 1996.
    [The information follows:]

                                                AGENCY RESOURCES                                                
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal year--               
                                                                    --------------------------------------------
                                                                                                         1997   
                                                                        1994       1995       1996    (estimate)
----------------------------------------------------------------------------------------------------------------
Payment protection.................................................     $4,129     $4,095     $2,651      $2,450
Livestock marketing................................................      1,085      1,109      1,838       1,650
Competition........................................................        485        197        919       1,300
Conflict-of-interest...............................................        245        250        306         300
Meat marketing.....................................................        222        192         73          75
Scales and weighing................................................        628        843        682         700
Drug residues......................................................          4          4          0           0
Poultry............................................................        700        900        754       1,000
----------------------------------------------------------------------------------------------------------------

                    generic inspection certificates
    Mr. Skeen. The agency began developing a generic sample-lot 
inspection certificate in fiscal year 1994. The design work has been 
completed and separate programs to generate generic certificates for 
each of the 13 grains are required. At this time last year, a prototype 
wheat program was expected to be ready in December 1996 with completion 
of the remaining 12 grain specific programs planned for the third 
quarter of 1997. What is the status of this work?
    Response. GIPSA is on track with the generic certificate program. 
The wheat program was complete din October 1996. However, within the 
past year, GIPSA has identified two new ADP initiatives that 
interrelate with the certificate program such that it will have to meet 
a number of additional requirements, including: (1) Data entry of an 
Electronic Data Interchange (EDI) record, and (2) producing an ASCII 
file in a standard GIPSA format. The additional requirements will delay 
the completion date until March 1998.
                             budget request
    Mr. Skeen. Provide a breakout, by item, of your fiscal year 1998 
budget request to the Secretary, the Secretary's request to OMB, and 
the OMB allowance.
    Response. The following table reflects the breakout of GIPSA's 
fiscal year 1998 budget request:

------------------------------------------------------------------------
                                    Request to                          
            Line item                  the       Request to      OMB    
                                    Secretary       OMB       allowance 
------------------------------------------------------------------------
Standardization Activities.......       $3,717       $3,552       $3,552
Compliance Activities............        4,757        4,538        4,538
Methods Development..............        2,912        2,783        2,783
Packers and Stockyards...........       15,390       14,849       14,849
                                  --------------------------------------
      Total, current law.........      $26,776      $25,722      $25,722
Proposed Legislation.............  ...........      -15,401      -15,401
                                  --------------------------------------
      Net, GIPSA Budget..........      $26,776      $10,321      $10,321
------------------------------------------------------------------------

                             other services
    Mr. Skeen. Provide a sub-object class breakout for object class 
25.2, Other Services, for fiscal years 1996, 1997, and 1998.
    Response. The following table reflects the breakout for object 
class 25.2:

------------------------------------------------------------------------
                                                    Fiscal year--       
                                           -----------------------------
                                              1996      1997      1998  
------------------------------------------------------------------------
Administrative support and statistical                                  
 services performed by other Federal                                    
 agencies.................................    $1,129    $1,129    $1,581
Personnel and data processing by other                                  
 Federal agencies.........................       187       202       262
Maintenance agreement on ADP Equipment....        82        88       115
Training Tuition fees and other related                                 
 training costs...........................       128       138       179
Applied and developmental research........       228       246       319
Repair and alteration or maintenance of                                 
 Equipment, furniture or structures.......        54        58        75
Miscellaneous services--covers publication                              
 notices advertising, and other                                         
 noncontractual services..................       189       204       265
All other services and overhead costs.....       381       411       533
                                           -----------------------------
      Total Object Class 25.2.............    $2,378    $2,566    $3,329
------------------------------------------------------------------------

                           soybean standards
    Mr. Skeen. The agency decided to defer action on amending the U.S. 
standards for soybeans to reduce foreign material grade limits until 
the industry has had an opportunity toreview and comment on the results 
of the ERS study on the costs and benefits of cleaning soybeans beyond 
current limits. At the hearing last year, you reported that the grain 
industry was reviewing the study findings. Has a final decision been 
made? If so, what was the decision?
    Response. We have decided not to change the foreign material limits 
for soybeans because the cost of change will outweigh the benefits. 
However, we believe the issue should remain open for discussion as 
genetically modified soybeans, which are resistant to herbicides, 
become available and acceptable to the soybean industry. These modified 
soybeans may offer the opportunity for producers to deliver lower 
foreign material soybeans in areas recognized for higher foreign 
material. Consequently, the cost of providing low foreign material 
soybeans may be reduced.
                             alpha-amylase
    Mr. Skeen. Alpha-amylase is an enzyme that is produced as seeds 
begin the process of sprouting and can be an important indicator of 
quality in certain crops such as Soft Red Winter wheat. Last year GIPSA 
was preparing to conduct a small scale study to gather field data on 
the performance of the DT 60 instrument and obtain a larger database 
for determining what is an acceptable ST 60 alpha-amylase activity 
range in wheat. This testing was anticipated to be complete in July 
1996. What is the status of this initiative?
    Response. DT 60 instruments were placed in the Portland, Oregon, 
and Stuttgart, Arkansas, Field Offices for evaluation purposes and to 
aid in the collection of comparative data--the alpha-amylase activity, 
the official Falling Number, and a visual determination of sprout 
damage. The data collection was completed in January 1997 and is now 
being evaluated. A report on the results of this testing is being 
prepared and should be completed by May 1997. Preliminary results 
indicate that there is a correlation between the Falling Number and 
alpha-amylase activity, and it should be possible to establish an 
alpha-amylase activity range similar to the Falling Number range.
                         central filing systems
    Mr. Skeen. The latest data we have is that 19 states had applied 
for and received certification of their central filings systems for 
prenotification of security interests against farm products. Give us an 
update on how this system is working. Have additional states been 
approved?
    Response. There were no requests for certification of new state 
central filing systems during 1996. There is interest in allowing 
electronic filing of effective financing statements. This is addressed 
in the item below. There is also some interest in removing the 
signature requirement when the time period for an effective financing 
statement is extended.
    Mr. Skeen. For the record, describe the changes to the central 
filing systems regulations that are being made to comply with the 1996 
Farm Bill.
    Response. Sections 662 and 663 of the Federal Agriculture 
Improvement and Reform Act of 1996, modified the central filing program 
by allowing electronic filing of effective financing statements without 
the signature of the debtor, provided state law authorizes such a 
filing. An interim regulation to implement this change was published in 
the Federal Register on October 22, 1996. The final regulation is being 
cleared for publication.
                   two-year study on wheat standards
    Mr. Skeen. You began a two-year study in February 1996 to determine 
if the wheat standards are current with respect to garlic tolerances. A 
preliminary report on the progress of the project is due in the first 
half of fiscal year 1997. What are the preliminary findings and 
recommendations of this study?
    Response. The researchers at the University of Illinois at Urbana-
Champaign provided a progress report of their research in December 
1996. The first 6 months of the project were focused on garlic 
collection across the soft wheat growing areas. Six grain elevators, 12 
official agencies, and 5 soft wheat mills agreed to participate in the 
collection of garlicky wheat. Five hundred ninety-three wheat samples 
were collected. The second 6 months of the project were focused on the 
analysis of garlicky wheat and the effects of garlic on the milling 
process. The garlic analysis includes separation and classification of 
garlic and physical characterization of garlic. A preliminary 
evaluation of garlic cleaning equipment for two flour mills was also 
completed with the number of bulblets per kilogram for one mill being 
reduced from 3 to 2.5 after cleaning; while another mill did not show 
any garlic reduction. Preliminary milling tests using a Buhler 
laboratory mill showed that 5 percent garlic contamination could 
produce about 99 percent plugging, which reduced flour extraction from 
61 percent to 57 percent. Since the study is not complete and only 
preliminary information is available, the project status report did not 
contain any recommendations. We do not expect any recommendations from 
the study until the economic impact analysis is completed after 
reviewing all available data.
                               user fees
    Mr. Skeen. Approximately 62 percent of GIPSA funds are derived from 
mandatory and discretionary user fees. For the record, provide a list 
of these fees and indicate which are mandatory and which are 
discretionary.
    Response. The following table reflects a list of mandatory/
discretionary user fees:
          Canadian Grain Inspection--Discretionary;
          Inspection & Weighing--Export is mandatory, domestic is 
        discretionary;
          Official Agencies--Discretionary;
          Rice Inspection--Discretionary;
          Commodity Inspection--Discretionary; and
          Registration--Mandatory.
                             investigations
    Mr. Skeen. Please explain why the number of investigations under 
Packers and Stockyards performance goals, measures, and indicators 
decreases from 2,265 in fiscal year 1996 to 1,900 in fiscal year 1998.
    Response. As the livestock industry becomes more concentrated, our 
resources are primarily being used to investigate firms and individuals 
that conduct the most business and subsequently have the greatest 
impact on the industry. Larger firms require more time and resources to 
investigate. While the total number of investigations will decrease, 
the overall percentage of the industry investigated annually will 
increase.
                   inspection and weighing reduction
    Mr. Skeen. You are projecting to reduce inspection and weighing 
services from $43,207,000 and 550 staff years in fiscal year 1997 to 
$43,092,000 and 508 staff years in fiscal year 1998, a reduction of 
$115,000 and 42 staff years. Shouldn't the dollar value associated with 
a 42 staff year reduction be much larger?
    Response. It should be noted than the dollar figure for this 
account is only a ceiling. In fiscal year 1996, actual obligation for 
this account was $34,306,943.
    The staff years for FY 1997 and FY 1998 are just estimates. We are 
hopeful that grain exports will increase in FY 1997 and our staff years 
are close to the 550 figure.
                            travel increase
    Mr. Skeen. Why do you project a 43 percent increase in your travel 
budget from fiscal year 1996 to fiscal year 1998?
    Response. The travel estimate in the table for fiscal year 1998 is 
too high. We have determined that funds should have been projected for 
personnel costs and benefits rather than for travel. Upon further 
review, we have determined that travel for fiscal year 1998 should have 
been projected at $1,550,000 which includes an increased allowance to 
cover travel costs for additional personnel to conduct investigations 
of anticompetitive practices in response to the recommendations of the 
Secretary's Advisory Committee on Agricultural Concentration. The 
remaining $222,000 should have been included in personnel costs and 
benefits for these additional personnel.
                           advisory committee
    Mr. Skeen. Provide a list of the recommendations of the Advisory 
Committee on Agricultural Concentration.
    Response. The Committee presented 55 recommendations. Eleven of the 
recommendations A.1. through A.9., B.9. and B.11. deal specifically 
with GIPSA programs. All recommendations, broken into categories, are 
provided below:
A. Antitrust and regulatory actions
    The first category of recommendations dealt with actions that 
should be taken within the framework of existing laws and policy for 
increased monitoring and enforcement of antitrust and regulatory 
policy.
    A.1. Antitrust enforcement of current regulations under the P&S Act 
should be stepped up. Any new mergers and consolidations that have the 
potential to reduce competition should be quickly challenged by the 
U.S. Departments of Justice and Agriculture. If any consolidations or 
strategic alliances are challenged, the contracting parties should be 
required to show that existing laws are not being violated, and that 
further concentration will enhance, and not diminish, competitiveness 
within the livestock industry.
    A.2. Section 202 of the P&S Act, which deals with unfair trade 
practices, should be enforced to the letter of the law.
    A.3. Congress should appropriate sufficient resources to USDA to 
allow aggressive pursuit of violations of the P&S Act and address 
problems in their incipiency.
    A.4. As to enforcing the laws as they now exist, the Secretary 
should immediately undertake a review of current enforcement practices 
and publicly report the results of that review.
    A.5. The USDA should expand the private right of action to parties 
believing themselves to be damaged by violations of the P&S Act and its 
regulations. A right to attorney's fees should be provided.
    A.6. GIPSA should investigate lamb supply contracts for their 
impact on markets and market access for participants without a supply 
contract.
    A.7. The USDA should ask the Antitrust Division of the U.S. 
Department of Justice for a report (confidential) about their findings 
to date on the question of packer concentration, including the lamb 
investigation of the 1990's. If their disclosure reveals the need for 
an investigation, it is recommended that an investigation ensue.
    A.8. Congress should amend the P&S Act to provide the Secretary 
with the same administrative and enforcement authority in all poultry 
products as in red meat, including all growers who raise and care for 
live poultry for another entity.
    A.9. Price differentiation should only be permitted with respect to 
differences in quality, verifiable differences in procurement costs 
(including differences in cost due to quantity), and time of delivery.
B. Market-based disclosure policy
    The second category of recommendations addressed needs for 
improvements in collection and reporting of market information.
    B.1. As part of a new reporting process, contract or formula 
pricing premiums and discounts, based on carcass merit, should be 
captured and reported.
    B.2. Research should be conducted on the reasons for and sources of 
economic difference in the value of market hogs--size of load, volume 
of annual business, timing of delivery, arranged time of delivery, 
plant operation economies, leanness, genetic line, etc.
    B.3. Timely, accurate price reporting should be required for all 
packer livestock transactions. Reporting must include accurate, 
verifiable data on all captive supply. Responsibility should be equal 
upon both parties to the transaction, and penalties should be imposed 
for late, inaccurate, or misleading information.
    B.4. Specifically, the Committee recommended the following packer 
reporting: numbers of cattle purchased in the cash market on a daily 
basis; all captive supplies committed for delivery at the start of each 
week; numbers of forward-contracted cattle in all out-months; Canadian 
or Mexican cattle committed for delivery at the start of each week; 
numbers and prices of cattle slaughtered on a daily basis; and exports 
on a weekly basis. For lambs, packer reporting of captive supplies for 
delivery is recommended at the start of each month.
    B.5. For hogs, research and reporting should provide, on a 
quarterly or greater frequency, the proportion of farm-packer sales 
which are formula-priced by State or region.
    B.6. A computerized decision tool which compares packers' base 
prices and pricing grids should be developed.
    B.7. The Committee strongly encouraged the Secretary to assist the 
beef industry in the development of a negotiated ``grid'' pricing 
structure, with the base price and spreads determined by competitive 
bidding between buying interests no more than seven days prior to 
shipment. AMS Market News Service should report a value matrix for 
cattle on a weekly basis.
    B.8. The producer price reporting pilot project for market hogs in 
Missouri should be expanded to include other States or regions to 
represent a broader participant base. The committee recommended working 
with industry to establish a standard leanness measurement as the 
industry's benchmark--such as the Fat Free Lean Index, and exploration 
of ways to make differentiated prices more available nationwide and 
understandable to producers.
    B.9. GIPSA should continue its long-standing work of monitoring the 
accuracy of carcass measurement equipment and devices.
    B.10. USDA should develop a standardized list of premium or 
discount categories for carcass merit purchasing, and an additional 
list of premium or discount categories based on market arrangements 
(e.g., forward contracts, marketing agreements). Consideration should 
also be given to reporting ranges as well as averages for each 
appropriate premium/discount category for livestock.
    B.11. The Committee strongly supported GIPSA's work with packers to 
review carcass merit pricing systems and changes to systems before 
their implementation, to assure fairness. Because some mistrust still 
exists between packers and producers, the feasibility of third-party 
oversight of post-slaughter carcass evaluation should be reviewed.
    B.12. The Committee recommended that the volume of boxed beef price 
reporting be increased beyond the current 36 percent of total steer and 
heifer boxed beef reported by the AMS Market News Service in 1995. It 
should include reporting of forward sales beyond the 10-day delivery 
period already reported, branded products, sales delivered as price 
basis to a forward contract, sales of less than carlot volume, and 
formulated sales. In addition to the currently reported choice/select 
price differential there should be a report of a price differential for 
USDA Prime and upper two-thirds of USDA Choice.
    B.13. USDA should encourage the development of a close-trimmed 
boxed beef futures contract as an additional means of price discovery 
for the livestock industry.
    B.14. Line-of-business profits should be reported, for both packers 
and feedyards.
    B.15. Import and export data for meat and meat products, including 
both price and volume information, should be made more timely and more 
accurate. Imports of feeder and fed cattle entering the United States 
should be reported, and information should be compiled and published 
regarding all exports of beef, veal, pork, lamb, chicken, turkey, and 
products thereof. The information should be reported within one week 
after the end of the week during which exports occurred.
    B.16. Better retail price reporting should be developed to more 
accurately reflect the farm-to-retail price spread.
C. Vertical linkages
    In the third category, the Committee presented several 
recommendations as alternatives that would enhance equitable sharing of 
risks and rewards in vertical linkages:
    C.1. Assistance should be provided to parties negotiating a 
contract or other form of alliance to make sure all are informed of 
risks and rewards.
    C.2. Rules to ``level the playing field'' in negotiations should be 
established, such as identifying, in advance, actions that would be 
deemed exploitative or inappropriate behavior.
    C.3. Rules should be established to require information be shared 
on costs, margins, and other relevant data, but with precautions to 
avoid development of overly-burdensome bureaucratic procedures that 
would discourage economically beneficial linkages.
    C.4. Standardized terminology should be developed that would place 
contractor and contractee on even ground in terms of knowing what is 
being agreed to.
    C.5. Consistent and effective rules for animal feedlots should be 
implemented that address water, air pollution, and odor problems, with 
producers allowed flexibility in their choice of available technology 
to attain mandated results.
    C.6. The USDA should initiate an effort to explain to producers the 
terms of various contracting forms, and provide guidance to producers 
as to how to make their decisions on participation.
    C.7. The USDA should research and publicize what is required to 
qualify for contracts and marketing arrangements, so that producers can 
be assured of being a part of future marketing arrangements.
D. Cooperatives and bargaining
    The Committee made several recommendations for fostering 
cooperative/collaborative behavior among producers to effectively 
address many of the concerns producers have about the marketplace:
    D.1. The right of producers to organize under the Capper-Volstead 
Act must be preserved, but the processor or integrator should retain 
the right to deal individually with the grower whose performance does 
not meet the standards of the contract.
    D.2. Some instrument for redress of producer grievances will likely 
be eventually required in large integrated production/marketing 
systems.
    D.3. Congress should amend the Agricultural Fair Practices Act of 
1967, to require handlers to engage in good-faith negotiation with 
producer cooperatives, without discrimination. As with D.1., above, the 
integrator should retain the right to deal individually with the grower 
whose performance does not meet the standards of the contract.
    D.4. Current laws should be reviewed to assure sufficient 
safeguards to protect the bargaining rights of contract grower 
associations to set terms and conditions of production contracts.
E. Other areas
    The Committee made a few additional recommendations concerning 
other issues related to its charge:
    E.1. The USDA should take aggressive action to end inequities in 
meat inspection, including taking specific steps to promote the ability 
of state-inspected packing plants to sell in interstate commerce if 
they meet Federal standards of inspection.
    E.2. The USDA and U.S. Trade Representative should speed up efforts 
to vigorously pursue and eliminate the EU ban on U.S. hormone-treated 
beef.
    E.3. The USDA should immediately begin research for new technology 
to categorize beef by tenderness and implement instrument grading to 
measure other quality indicators.
    E.4. Field testing and adoption of newly developed technologies 
should be facilitated.
    E.5. The former Farmers Home Administration, now part of the Farm 
Service Agency, and the lending arm of the Farm Credit Administration, 
including the Bank of Cooperatives, should focus their lending 
resources on family-size operations. Expansion should not be imposed an 
a condition for credit if continuation of the existing scale is 
justified. USDA lending authority should not be used to subsidize 
large-scale operations.
E. Recommendations on rail transport
    The Committee also made recommendations that focused on ways to 
alleviate rail transportation problems, including those associated with 
rail car shortages due in part to consolidation in the railcar 
industry.
    F.1. The government loan period could be extended from the current 
9 months up to 15 months to move grain into the market over a longer 
period of time.
    F.2. As an alternative, loan maturity periods could be staggered so 
that one-third of each producer's loans could mature at the end of 6, 
9, 12, and 15 months with different prices or interest rates as an 
incentive to release the grain at various times.
    F.3. Economic analysis is needed to determine the risks and returns 
associated with various financial tools such as hybrid cash contracts, 
futures contracts, and options to suggest how and when each could be 
used.
    F.4. A major educational effort is needed to educate producers, 
shippers, and buyers on how and when to use the tools.
    F.5. A process is needed to provide transportation outlook 
information to producers, shippers, and buyers.
    F.6. USDA's transportation experts should publish monthly rail 
shipper survey information.
    F.7. Private shippers, the academic community, and the USDA should 
suggest and coordinate research activities, and the USDA should become 
actively involved with the National Grain Car Council in the Surface 
Transportation Board (STB).
    F.8. A mechanism is needed to permit arbitration of transportation 
disputes.
    F.9. The USDA should provide input and advice to assure:
          Accurate information on local grain shipping issues and 
        problems;
          Recommendations for needed changes under the STB authority;
          Studies and advice for shippers that wish to purchase rail 
        lines or improve facilities and infrastructure;
          Information on access to all sources of public and private 
        funds for infrastructure and facility purchase and upgrading; 
        and
          Advice to the Secretary of Agriculture on the need for low-
        interest-rate loans or bonds.
    F.10. The USDA should encourage the establishment of a market-
sensitive car allocation system, allowing the freight market to trade 
at premiums and discounts to tariff rates, but without precluding the 
railroad common carrier obligation for a portion of its fleet.
    F.11. The USDA should recommend the STB pursue the following when 
reviewing a potential merger:
          Determine if there is sufficient competition for a fair and 
        equitable merger;
          Require that the merged carrier, if a merger is approved, 
        offer acceptable service and performance standards, with 
        penalties for nonperformance; and
          Determine whether a proposed merger will have an adverse 
        effect on competition among rail carriers in the region.
    F.12. The STB should be allowed to limit rates in market areas 
where there is little or no competition.
    F.13. The new STB fee system should be evaluated for its potential 
impacts on small and medium-sized shippers that wish to petition the 
STB.
    F.14. The USDA should establish a grain shippers' hotline in the 
STB for reporting on railcar supply problems, and the STB should make 
weekly reports to the USDA on the number and nature of reports and 
complaints to the hotline.
                             legal actions
    Mr. Skeen. How many legal actions are pending which require 
economic and statistical analysis by the agency?
    Response. GIPSA currently has two legal actions and four major 
investigations pending which will require economic and statistical 
analysis.
                   competition and industry structure
    Mr. Skeen. Provide a detailed breakout of how the $1,595,000 
requested increase for packer competition and industry structure would 
be used.
    Response. The additional funds requested for fiscal year 1998 are 
needed for GIPSA to more aggressively pursue anticompetitive practices 
related to industry concentration. We have increased the frequency of 
anticompetitive investigations during the past two years, but this has 
come at the direct expense of programs designed to protect individual 
producers from unfair practices and provide financial protection. The 
additional fund will be used to recruit and integrate more economic, 
statistical, and legal expertise into investigative units that will 
conduct investigations involving anticompetitive practices, but not at 
the expense of our other vital enforcement responsibilities. In FY 1998 
we will conduct major anticompetitive practice investigations and 
detailed analyses in the slaughter steer and heifer, slaughter hog and 
slaughter cow industries and develop detailed evidence where incidences 
of anticompetitive practices are disclosed. Additional personnel with 
economic, statistical, and legal expertise will be critical to 
completing this work.
                           advisory committee
    Mr. Skeen. One of the recommendations of the Advisory Committee on 
Agricultural Concentration was that the Secretary be provided the same 
administrative enforcement authority for poultry as currently exists 
for red meat. Do you need legislation for this to occur?
    Response. Yes, we need legislation enacted in order to have the 
same administrative authority for poultry as currently exists for red 
meat. USDA will submit proposed legislation to amend the P&S Act to 
provide administrative authority over poultry.
    Mr. Skeen. Another recommendation of the Committee has lead to an 
investigation of the lamb industry. When do you expect to complete this 
investigation?
    Response. This investigation is currently under way. The analysis 
of the data will be completed by the end of calendar year 1997. The 
final conclusion of the investigation will depend on the outcome and 
results of the data analysis.
                    increase for poultry compliance
    Mr. Skeen. Provide a detailed breakout of how the $750,000 
requested increase for poultry compliance would be used.
    Response. The additional $750,000 requested for poultry compliance 
is necessary if the Agency is to initiate and perform in-depth 
compliance investigations, that directly affect grower settlements. For 
the past several years the Agency's poultry work has been restricted to 
investigation of complaints received from poultry growers. These 
additional funds would allow the Agency to investigate many of the 
contractual concerns being iterated by contract poultry growers 
throughout the Southeast. The funds will be used to place additional 
investigators in the field to conduct broad industry-wide 
investigations. This will enable us to examine the effects of practices 
that impact grower performance and pay. These practices encompass such 
areas as probation programs that restrict grower payment, grower 
comparisons as the means of determining a grower's pay, mandatory 
equipment changes on newer housing, and the requirement that binding 
arbitration must be used to settle disputes.
                              license fees
    Mr. Skeen. You state that the user fee proposal for license fees is 
consistent with the Administration's efforts to shift funding for 
programs, which benefit identifiable groups, to user fees. You go on to 
state that the beneficiaries of license fees are the livestock 
producers and poultry growers, firms who are subject to regulation 
under the provisions of the P&S Act, and consumers. If these are the 
identifiable groups who benefit from license fees, who will pay the 
user fees and how much will each pay?
    Response. We propose that license fees be paid by those firms 
subject to the P&S Act. There are currently 9,200 market agencies and 
dealers registered that would be subject to the licensing requirement. 
In addition, there are 1,350 stockyards, 6,000 slaughtering and 
processing packers, 224 poultry processors, and 6,500 meat 
distributors, brokers, and dealers that would also be subject to the 
licensing requirement. We are currently exploring two concepts for 
structuring a fee schedule. The first is based on a basic licensing fee 
with additional fees for each branch and for each type of operation 
with minimum and maximum fees. The minimum annual fee will likely be 
about $500 and the maximum will likely be between $5,000 and $7,500. 
The second concept would be based on the volume of livestock marketed 
or product handled within similar minimum and maximum fees.
    Mr. Skeen. Provide a breakout of what the one-time cost of 
$3,000,000 to convert to license user fees is for.
    Response. The funds will be needed to maintain ongoing operations 
during a transition period that will be required to promulgate the 
necessary implementing regulations and begin collecting the license 
fees. It would also fund the leave liability accumulated under the 
appropriated program. Without appropriated funding, these costs would 
become an immediate liability to users.
                 livestock marketing unrecovered losses
    Mr. Skeen. How much of the amount of uncovered losses in the 
livestock marketing chain is dealer failures?
    Response. During fiscal year 1996, unrecovered losses from dealer 
failures amounted to $2,532,240. The total unrecovered loss from dealer 
failures for the 5-year period beginning with fiscal year 1992 is 
$14,361,174, or 75.9 percent of the total owed sellers of livestock at 
the time of failure. This results, on average, in unrecovered losses of 
$2,872,235 per annum.
                         canadian oat standards
    Mr. Skeen. Your agency plans to publish a proposal after the review 
of the Canadian oat standards to determine if harmonizing the standards 
would facilitate the international marketing of oats. What is the 
status of this review?
    Response. We have initiated the review of the oat standards, and we 
are working closely with the Canadian Grain Commission. Our first 
efforts are to determine which standards and procedural differences 
exist to determine the impact of changes to harmonize the oat 
standards. To measure this impact, we are actively collecting oat 
samples from the United States and Canada and grading these samples 
under both standards. This analysis will provide the basis to determine 
the impact of any change, if adopted. We are also working with the U.S. 
oat processors to better determine their needs to assess the value of 
the U.S. oat standards.
                             rice standards
    Mr. Skeen. What is the status of the development of more market 
oriented rice standards and cost-effective inspection programs?
    Response. Our review of the rice standards indicates the U.S. rice 
market is satisfied with the standards the way they are written. The 
rice industry has not indicated a change is needed at this time; 
however, we are working with the industry to refine our procedures and 
analytical interpretations to better reflect the industry's market 
needs. We have also initiated a field-based action team to address rice 
inspection concerns and recommend improvements to our inspection 
program. GIPSA is continuing its dialogue with the rice industry to 
assure the standards and procedures address their future marketing 
needs.
                                research
    Mr. Skeen. What were the results of the research project to assess 
the differences between the U.S. official test weight method and the 
metric method specified by the International Standards Organization for 
wheat?
    Response. The research project showed that the equation currently 
used to express U.S. test weight results in metric units (kilograms per 
hectoliter) consistently gives lower values than what would be obtained 
using the International Organization of Standardization (ISO) method. 
Two revised conversion equations, one for Durum wheat and one for all 
other wheat classes, were developed to reduce the differences between 
the two methods. The new equations will be used to express U.S. test 
weight for wheat in metric units beginning May 1, 1997.
                       world health organization
    Mr. Skeen. For the record, provide a list of the World Health 
Organization's established guidelines for select elements in grains.
    Response. The World Health Organization has proposed the following 
draft guidelines:

Proposed draft guideline levels for cereals, pulses, and legumes

        Contaminant                                                Mg/kg
Arsenic...........................................................   0.5
Cadmium...........................................................   0.1
Mercury...........................................................  0.05
Lead..............................................................   0.5
                         pesticide data program
    Mr. Skeen. What is your agency doing in support of the Pesticide 
Data Program this fiscal year?
    Response. GIPSA is responsible for developing sampling plans and 
collecting wheat and soybean samples to be analyzed for a variety of 
pesticide residues. In fiscal year 1997, GIPSA will collect 
approximately 350 wheat samples and initiate the collection of soybean 
samples. The majority of wheat samples will be analyzed in fiscal year 
1997. A total of 600 soybean samples are to be collected, but due to 
harvest times, both the collection and the analysis of the soybean 
samples will start in fiscal year 1997 and continue into fiscal year 
1998. The AMS is working with EPA this fiscal year. AMS is requesting 
$9.8 million to fund the Pesticide Data Program for FY 1998.
                       niacin in corn-soy blends
    Mr. Skeen. You state in the budget justifications that GIPSA 
scientists are developing a method for determining niacin in corn-soy 
blends. How do you coordinate the research you do with the research 
that ARS does in this area?
    Response. Methods development by GIPSA scientists generally is 
based on research previously conducted by ARS scientists or methods 
published in the scientific literature. As with any methods 
development, the research objective dictates the research approach. Due 
to the differing objectives of ARS and GIPSA, available methods often 
do not meet the specific needs of GIPSA and, therefore, GIPSA 
scientists must modify methods to satisfy specific program needs. For 
example, in developing a method to measure protein, GIPSA scientists 
modified existing methods to adapt to the grain inspection laboratory. 
GIPSA scientists look for precision, accuracy, safety, and speed. Our 
scientists share data and equipment and often discuss experimental 
approaches for solving problems. ARS scientists usually devote their 
resources to development of new methods and approaches to analyzing 
quality factors in grain.
                            computer imaging
    Mr. Skeen. Provide a brief description of the status of using 
computer imaging for grain inspection including the role you see 
computers playing in the future of the program.
    Response. Computer imaging is a critical technology for developing 
objective determinations to replace subjective visual grain grading. 
This technology is relatively new, but many researchers are developing 
algorithms to assess grain quality. The Agricultural Research Service, 
the Canadian Grain Commission, and many universities and private 
companies are working to improve the technology and make it both 
effective and efficient for grain inspection. Research has been 
successful in numerous grain applications, and some commercial 
instruments are available to perform grain or seed inspections. 
However, the speed and discriminatory capabilities of available 
instruments fall considerably short of what is needed for routine grain 
grading.
    Acquiring and processing the images needed for grain grading is 
extremely difficult. Computer imaging is computationally intensive. The 
most powerful personal computers available today are inadequate to 
process images of grain as rapidly as a human inspector. The human 
inspector's eyes provide three-dimensional information, such as 
texture, that is extremely difficult to capture using electronic 
cameras. The human inspector can physically manipulate grain kernels to 
observe all surfaces. These challenges will undoubtedly be overcome in 
time. Computers and computer imaging will certainly play a major role 
in grain inspection within the next ten years.
                  electronic odor-sensing instruments
    Mr. Skeen. What were the results of the study conducted with ARS on 
the use of electronic odor-sensing instruments?
    Response. The feasibility study regarding electronic odor-sensing 
instrumentation is not yet complete. Several instrument manufacturers 
are working with ARS to test prototype instruments using the sample set 
GIPSA provided. Early results obtained on one instrument were not 
veryencouraging. The manufacturers are performing further research to 
optimize their sampling and sensing methods for grain before analyzing 
the test sample set. Result are expected later in fiscal year 1997.
                               violations
    Mr. Skeen. What is the status of the 16 violation cases that were 
pending at the end of fiscal year 1996?
    Response. At the end of fiscal year 1996, sixteen cases involving 
alleged violations of the USGSA or the AMA were pending further action. 
Alleged violations in these cases included deceptive practices, 
altering official documents, grading discrepancies, and export quality 
specification discrepancies. During fiscal year 1997, nine of the 
sixteen cases were closed with appropriate action taken by GIPSA (e.g., 
warning letters, informational letters, cautionary letters, etc.). 
Currently, seven cases from fiscal year 1996 are pending.
                             foreign travel
    Mr. Skeen. One of the international monitoring program functions is 
to travel to other countries to explain the agency's inspection and 
weighing procedures. How many countries did the staff travel to in 
fiscal year 1996 and how many are planned for fiscal year 1997? What is 
the total cost of this travel? Do the participating countries 
contribute to these costs?
    Response. In fiscal year 1996, the staff traveled to 14 countries 
(27 trips) to explain the Agency's inspection and weighing procedures, 
attend meetings with international government officials, attend 
conferences, and respond to grain quality discrepancies. In fiscal year 
1997, the staff has traveled to 10 countries, and travel to 
approximately five other countries is planned at this time.
    In fiscal year 1996, the total cost of this travel was $31,440 to 
GIPSA, and $49,836 to other USDA agencies and cooperator groups. Total 
cost for fiscal year 1997, to date, has been $1,269 to GIPSA and 
$20,286 to other USDA agencies and cooperator groups.
    Participating countries have not contributed to these costs 
directly to GIPSA, through other USDA agencies, or through cooperator 
groups.
                 restriction of competition priorities
    Mr. Skeen. I read in the budget justifications that any information 
which indicates a possible restriction of competition is investigated 
on a priority basis. For the record, tell the Committee how this 
priority system operates.
    Response. The Agency conducts investigations of subject firms and 
individuals based on a combination of factors. Some of the factors 
include the size of the firm, their impact to the industry, nature of 
the possible violation, etc. Possible violations such as restriction of 
competition, especially if we receive a specific complaint, are a very 
high priority for the Agency and will be investigated immediately.
                    performance measures under gpra
    Mr. Skeen. Packers and Stockyards was selected as a pilot project 
for performance measurements under the Government Performance and 
Results Act of 1993 for fiscal years 1995 and 1996. Give us an overview 
of this project and its results.
    Response. The Scales and Weighing Branch was selected by the 
Department and approved by the Office of Management and Budget to serve 
as a GIPSA pilot project. The primary goal is to have accurate weights 
in subject transactions. The objectives of this program are to assure 
that entities operate scales that are correct within current 
requirements, and that weighing practices are investigated to assure 
accurate weights. We developed goals, objectives, and measures of 
performance. Our computer program was modified to automate data 
gathering and reporting criteria. Quality control measures were 
included in the Performance Plan and the Performance Report to monitor 
the reliability of the data obtained. We have continued to develop and 
refine methods of prioritizing and directing resources to areas of 
greatest economic impact. The accurate scales compliance level for 1995 
was 88.2 percent, and for 1996 was 88.6 percent. The accurate weighing 
compliance level for 1995 was 89.9 percent, and for 1996 was 89.4 
percent.
                    industry comments on rulemaking
    Mr. Skeen. The agency expects to propose an advance notice of 
proposed rulemaking to solicit industry comments in the area of feed 
weighing, live bird weighing, and growing contracts that base grower 
payment on comparison of other growers' performance in the first half 
of fiscal year 1997. What is the status of this initiative?
    Response. The advance notice of proposed rule making was published 
in the Federal Register on February 10, 1997. The comment period will 
close on May 12, 1997.
               unfair competitive practices investigation
    Mr. Skeen. An investigation into unfair competitive practices was 
made during fiscal year 1996 of the procurement of slaughter cows in 
the Northwest. The investigation revealed an alleged arrangement 
entered into between two livestock dealers for the purpose, and with 
the effect, of restricting competition and thereby controlling the 
prices for slaughter cows at auction markets. What was the outcome of 
this investigation?
    Response. As a result of this investigation an administrative 
complaint has been issued charging the two livestock dealers with 
restricting competition in the marketing of slaughter cows in the 
Williamette Valley of Oregon by entering into an arrangement for the 
purpose, and with the effect, of controlling prices for slaughter cows. 
An administrative oral hearing is scheduled for August 26, 1997, in 
Portland, Oregon.
    Mr. Skeen. Once an administrative complaint is issued by your 
agency, what actions are taken next?
    Response. After an administrative complaint has been issued and 
signed by the Deputy Administrator, it is filed with the Hearing 
Clerk's office. The Hearing Clerk sends the complaint to the respondent 
by certified mail. The respondent is given an opportunity to settle the 
complaint informally by agreeing to a consent decision or may request a 
formal administrative hearing on the charges. If a hearing is 
requested, the case will be heard by an Administrative Law Judge (ALJ) 
that will issue a ruling on the case. Both parties have the right to 
appeal the ALJ's decision to the Department's Judicial Officer, who is 
the final deciding authority for USDA. The respondent may appeal the 
Judicial Officer's ruling to the U.S. Court of Appeals. A press release 
is issued at the time a complaint is initially issued and when the case 
is concluded.
    Mr. Skeen. What is the status of the investigation underway in the 
Texas Panhandle?
    Response. We have obtained detailed procurement data from the four 
major steer and heifer slaughter plants in the Texas Panhandle. The 
data time-frame includes 16 months (February 1995 through May 1996) of 
procurement data, over 37,000 individual transactions and over 6 
million head of cattle. The outcome of the investigation depends on the 
results of the economic and statistical analysis, which is currently 
underway. The initial analysis should be completed by the end of FY 
1997.
    Mr. Skeen. What was the outcome of the administrative hearing 
scheduled for the week of January 17, 1997, in Kansas City, Missouri, 
involving charges against IBP, inc. of giving preferential treatment to 
a select group of feedlots in Kansas?
    Response. The final week of testimony from government and IBP is 
scheduled for the week of April 14, 1997. The outcome of the case will 
be determined by the Administrative Law Judge presiding over the 
hearing.
                          staff-year in canada
    Mr. Skeen. Where in Canada is the one staff-year located?
    Response. The staff-year is located in Montreal.
                         new user-fee structure
    Mr. Skeen. What has the reaction by industry to the new inspection 
and weighing system user fee structure?
    Response. The comments we have received from industry have 
generally been positive. Industry likes the idea of paying only for 
those inspection services requested. Under the old, straight hourly 
rate system, all inspection costs were incorporated into one hourly 
rate. Now industry has an opportunity to control their costs through 
the utilization of varied lengths of contracts (3-month, 6-month, and 
1-year contracts) and noncontract hourly rates, along with the ability 
to choose what specific tests and services they need.
                      intermarket tracking system
    Mr. Skeen. What were the findings and recommendations of the pilot 
intermarket tracking system for barge movements on the Mississippi 
River to compare origin and destination quality results?
    Response. The intermarket barge tracking system, begun 
approximately one year ago, has been a catalyst to increase 
communication between origin and destination offices within the 
official inspection system. We believe this communication is a vital 
component in our efforts to meet our customers' needs for corresponding 
origin and destination inspection results. Information gained through 
the intermarket program has stimulated sample exchanges between offices 
to determine the cause the resolve differences. Origin inspection 
offices and inspection agencies are now able to know how their analyses 
compare with destination results. The pilot program has taught us the 
difficulty of matching origin and destination results with a permissive 
service. Because not all barges are inspected at origin and 
destination, we have learned that positive matching of inspection 
results can be difficult and time consuming. However, we believe this 
type of information is extremely valuable in determining the quality of 
service as perceived by our customers, and we plan to continue 
exploring ways to gather this information.
                         electronic networking
    Mr. Skeen. Your agency is beginning the process of electronically 
networking its official agencies with its field offices and 
headquarters. What is the total cost and time frame of this initiative?
     Response. GIPSA hopes to have most of the 65 official agencies 
networked with the official system by March 1, 1998. GIPSA is putting 
out a directive that will spell out the hardware and software 
requirements for an official agency to become part of the FGIS network. 
FGIS plans to work with those agencies where the requirements may delay 
their joining the network.
    GIPSA estimates that the total GIPSA cost will be approximately 
$50,000 to implement, with a yearly support cost of $30,000.
                               adp costs
    Mr. Skeen. How much did GIPSA spend on ADP hardware and software 
purchases and related contractual support in fiscal years 1995, 1996, 
and estimates for 1997?
    [The information follows:]

         SUMMARY REPORT ON ADP PURCHASES AND CONTRACTUAL SUPPORT        
------------------------------------------------------------------------
                                               Fiscal year--            
                                  --------------------------------------
                                       1995         1996      (Est) 1997
------------------------------------------------------------------------
Hardware Maintenance.............      $37,665      $33,590      $53,398
Software Maintenance.............       50,497       27,101       26,240
Hardware.........................      594,451      298,743      450,609
Software.........................       77,467       89,266      104,746
Contractor Support...............      371,541      207,354       30,000
                                  --------------------------------------
      Total cost.................   $1,131,621     $656,054     $664,993
------------------------------------------------------------------------

                      organizational effectiveness
    Mr. Skeen. Provide a brief description of the initiatives GIPSA 
pursued in fiscal year 1996 to improve service delivery and 
organizational effectiveness.
    Response. In fiscal year 1996, GIPSA pursued several initiatives to 
improve service delivery and organizational effectiveness, as follows:
    GIPSA's Technical Services Division (TSD) consolidated functions 
performed at the Commodity Testing Laboratory (CTL) located in 
Beltsville, Maryland, with the quality assurance and quality control 
programs at the Technical Center in Kansas City, Missouri, in April 
1996. The consolidation of TSD and CTL has improved customer service 
and established a single point of contact for field customers. The new 
structure has provided a flexible organizational structure to meet 
service opportunities and provides increased uniformity in reporting 
data and information.
    GIPSA is implementing an enhanced quality assurance and quality 
control program to ensure the quality and accuracy of inspection 
results nationwide. The new program will include a balance of national 
and localized monitoring. A greater emphasis will be placed on 
proactive actions to prevent problems from occurring rather than 
reacting to problems once they have occurred. Work on this program 
continues and implementation is scheduled for fiscal year 1997.
    GIPSA is developing a telecommunications network that will allow 
electronic mail and daily data sharing between all offices within the 
official inspection and weighing system. Among other things, the 
network will allow GIPSA to create a national grain quality database 
that will have many uses, including providing a dynamic picture of 
nationwide grain trends and allowing timely responses to potential 
problem areas. GIPSA's target is to achieve 100 percent linkage of all 
offices in fiscal year 1998.
    GIPSA has developed an investigation and case tracking system which 
will allow the Agency to track regional and industry-wide 
investigations, thus increasing efficiencies for the Agency and 
customers alike.
           reengineered quality assurance and control program
    Mr. Skeen. It is stated in the testimony that in fiscal year 1996 
GIPSA began implementing a reengineered quality assurance and quality 
control program for the official grain inspection system to ensure the 
quality and accuracy of inspection results nationwide. Please describe 
this program in further detail.
    Response. The program focuses on both ability and performance of 
the official system's inspectors, with both local control and national 
oversight. A handbook explaining the program was finalized and issued 
in October 1996. The system is centered around front-line inspectors 
sending samples of their determinations to the appropriate local 
quality assurance specialists for verification of their grading 
ability, and the local quality assurance specialist randomly reviewing 
samples previously inspected by front-line inspectors to determine 
their actual performance.
    Local control of the program is provided to our field office 
managers so that they may tailor many of their activities to meet the 
challenges facing inspectors in their geographic area. However, a 
national supervision plan with uniform sample selection is also a vital 
part of the overall program. Data form the national supervision plan 
will be used to provide headquarters with the national oversight 
necessary to identify performance problems between offices for 
immediate action.
                              oig's review
    Mr. Skeen. When will the IG's review of current enforcement 
practices under the P&S Act be complete?
    Response. The Office of the Inspector General (OIG) for the 
Department of Agriculture completed a review of GIPSA's enforcement 
activities under the P&S Act on February 26, 1997. The OIG concluded 
that ``GIPSA has the authority to investigate anticompetitive practices 
in the meat packing industry and has a credible record at handling 
traditional investigations into fraud and unfair business dealings. In 
order to more aggressively pursue anticompetitive practices related to 
industry concentration, GIPSA needs to place more of its resources in 
regional offices, redirect its staff efforts, increase the number of 
economists, integrate legal expertise into its investigations, and 
consult with OGC as cases are started.''
                   oig's finding and recommendations
    Mr. Skeen. What are you doing to comply with the IG's findings and 
recommendations regarding concentration in the livestock and 
meatpacking industries?
    Response. GIPSA recognizes the need to place more resources in the 
field and is currently preparing a restructuring plan that will 
consolidate regional offices, place more resources in the field, and 
integrate more economic, statistical, and legal expertise into the 
investigative process.
                             gpra progress
    Mr. Skeen. GPRA, known as the Results Act, requires each executive 
agency to issue, no later than September 30, 1997, a strategic plan 
covering at least five years. In addition to a mission statement 
grounded in legislative requirements, the plans are to contain general 
goals and objectives that are expected to be outcome or results 
oriented (such as to improve literacy) as opposed to output or activity 
oriented (such as to increase the number of education grants issued).
    What progress is the agency making in developing its strategic 
plan, including defining its mission and establishing appropriate 
goals?
    Response. In fiscal year 1996, the Grain Inspection, Packers and 
Stockyards Administration (GIPSA) developed a 5-year strategic plan to 
help guide the Agency into the next century. GIPSA's mission is to 
facilitate the marketing of livestock, poultry, meat, cereals, 
oilseeds, and related agricultural products, and promote fair and 
competitive trading practices for the overall benefit of consumers and 
American Agriculture. The Agency's general goals are as follows:
    General Goal I: Ensure that programs are cost-effective and 
responsive to markets served.
    General Goal II: Ensure that the credibility of programs is 
unquestionable.
    General Goal III: Ensure that GIPSA employees are highly-skilled 
professionals providing quality customer service.
    General Goal IV: Harmonize customers' expectations with GIPSA 
authority and capabilities.
                           conflicting goals
    Mr. Skeen. Has the agency identified conflicting goals for any of 
its program efforts? If so, what are the performance consequences of 
these conflicting goals and what actions--including seeking legislative 
changes--is the agency taking to address these conflicts?
    Response. No. GIPSA has not identified any conflicting goals for 
any of its program efforts.
                               resources
    Mr. Skeen. Strategic plans must be based on realistic assessments 
of the resources that will be available to the agency to accomplish its 
goals. As you are developing your strategic plan, how are you taking 
into account projected resources that likely will be available--
especially as we move to a balanced budget? What assumptions are you 
making? How are you ensuring that your goals are realistic in light of 
expected resources?
    Response. GIPSA's goals are consistent with projected resources. 
However, to make specific programs fully cost-effective, as requested 
in the Administration's budget, additional resources are needed to 
develop the procedure to allow the industry to file reports 
electronically with the Agency, provide the Agency with the means to 
conduct detailed investigations and analyses in selected market areas, 
and enhance the Agency's poultry compliance activities.
    The Paperwork Reduction Act signed by the President on May 22, 
1995, establishes guidelines for development of simpler reporting 
requirements for businesses. In connection with the signing of this 
law, the President has instructed agencies to provide for electronic 
submission of reports. To implement this Presidential initiative, an 
increase of $225,000 is requested.
    An increase of $1.6 million and 20 staff years are needed to 
provide the Agency with the means to conduct detailed investigations 
and analyses in selected market areas on a timely basis. It would also 
enable GIPSA to meet its responsibility to foster fair and open 
competition and guard against deceptive and fraudulent practices which 
affect the movement and price of meat animals and meat food products.
    Additional resources are also needed for poultry compliance 
activities. In the past, funding and staffing levels have prevented the 
Agency from addressing the current problems and issues in the poultry 
industry. An increase of 10 staff years and $750,000 will allow the 
Agency to operate on other than a complaint driven basis and allow the 
number and scope of compliance investigations to increase. More in-
depth compliance investigations will increase the Agency's ability to 
identify and address practices in the industry that may be unfair, 
unjustly discriminatory, or deceptive before the practices escalate. 
This will allow GIPSA to more effectively counsel poultry growers when 
they have complaints.
                            direct linkages
    Mr. Skeen. For Congress, the heart of the Results Act is the 
statutory link between agency plans, budget requests, and the reporting 
of results. Starting with fiscal year 1999, agencies are to develop 
annual performance plans that define performance goals and the measures 
that will be used to assess progress over the coming year. These annual 
goals are to measure agency progress toward meeting strategic goals and 
are to be based on the program activities as set forth in the 
President's budget.
    What progress have you made in establishing clear and direct 
linkages between the general goals in your strategic plan and the goals 
to be contained in your annual performance plans? OMB expressed concern 
last year that most agencies had not made sufficient progress in this 
critical area.
    Response. GIPSA's strategic plan is structured so that each of the 
Agency's strategic goals and objectives includes details about 
supporting tasks and performance measurements. The Agency is currently 
preparing its annual performance plan for fiscal year 1999, which will 
provide even greater detail about these supporting tasks and 
performance measures.
    Mr. Skeen. More specifically, how are you progressing in linking 
your strategic and annual performance goals to the program activity 
structure contained in the President's budget? Do you anticipate the 
need to change or modify the activity structure to be consistent with 
the agency's goals?
    Response. GIPSA has developed a matrix which clearly shows the 
relationship between the Agency's annual performance goals, strategic 
goals, and five budgetary line items: Packers and Stockyards, 
Standardization, Compliance, Methods Development, and Grain Inspection 
and Weighing Activities. As a result, GIPSA does not anticipate the 
need to change or modify the Agency's budgetary line items to be 
consistent with the Agency's goals.
                          performance measures
    Mr. Skeen. Overall, what progress has your agency made--and what 
challenges is it experiencing--defining results-orientated performance 
measures that will allow the agency and others to determine the extent 
to which goals are being met?
    Response. As part of the planning process, GIPSA has identified 
annual performance measures that will allow the Agency to 
quantitatively evaluate performance. In the grain program, in Fiscal 
Year 1998, GIPSA will begin measuring the performance of the new 
quality assurance and control system for accuracy and consistency; the 
average cost of oversight per metric ton of grain inspected; the 
average cost of export grain inspection per metric ton; the number of 
new tests developed and improved methods and calibrations implemented; 
the number of inspection automation ventures initiated by the Agency; 
and the number of official agencies which are linked via the new 
telecommunication network.
    For the Packers and Stockyards Program, GIPSA has developed an 
investigation and case tracking system which will allow the Agency to 
track regional and industry-wide investigations. GIPSA will also 
develop and implement a system to electronically receive reports from 
the industry.
                              pilot plans
    Mr. Skeen. If applicable, what lessons did the agency learn from 
its participation in the Results Act pilot phase and how are those 
lessons being applied to agency-wide Results Act efforts?
    Response. The Scales and Weighing Branch of GIPSA's Packers and 
Stockyards Program is a pilot in the Results Act pilot phase. This 
pilot project has provided the Agency with a greater understanding of 
the GPRA and how the GPRA will assist the Agency in strengthening its 
planning and measurement processes. Participation in the pilot phase 
has reinforced the importance of, and need for, accurate and current 
information in achieving the performance goals outlined in the Agency's 
annual performance plan. The pilot project has also given the Agency 
first-hand experience in developing and evaluating outcome measures and 
a better understanding of the difficulties involved in moving from 
input/output measures to outcome-based measures. As the Agency has 
progressed through the pilot phase, it has become increasingly apparent 
that GIPSA's outcome measures are still evolving.
                  building capacity for implementation
    Mr. Skeen. What steps is the agency taking to build the capacity 
(information systems, personnel skills, etc.) necessary to implement 
the Results Act?
    Response. GIPSA is taking a number of steps to build the Agency's 
capacity to implement the Results Act and to meet our customers' needs. 
GIPSA currently is developing a telecommunications network that will 
allow all of the Federal offices and State and private agencies that 
comprise the official grain inspection and weighting system to 
communicate electronically and share data on a daily basis. This 
network will allow GIPSA to create a national grain quality database 
that will provide a dynamic picture of nationwide grain trends and 
further enhance the responsiveness and accuracy of the official system. 
GIPSA is automating the export inspection statistical shiploading plan, 
also known as Cu-Sum. This will improve the efficiency of the official 
system by minimizing manual data collection and calculations, and by 
permitting direct data sharing with customers and remote GIPSA offices.
    GIPSA has developed an investigation and case tracking system which 
will allow the Agency to track regional and industry-wide 
investigations. GIPSA will also develop and implement a system to 
electronically receive reports from the industry.
    As GIPSA develops its information systems, the Agency also is 
concurrently providing employees with developmental opportunities to 
ensure they have the skills and knowledge needed to effectively use 
these new systems. All inspectors have received training in statistical 
process control, and numerous employees have received training in 
customer service and team problem-solving techniques. GIPSA recognizes 
that the integration of automation into the Agency's business processes 
also means that all aspects of employees' work will become increasingly 
interconnected and interdependent. Interdisciplinary teams that cross-
cut traditional organizational boundaries, and that bring together a 
diversity of skills and perspectives, will be the key to GIPSA's 
success in continuously improving the Agency's programs, policies, 
operations, and work environment.
                              stakeholders
    Mr. Skeen. The Results Act requires agencies to solicit and 
consider the views of stakeholders as they develop the strategic plans. 
Stakeholders can include state and local governments, interest groups, 
the private sector, and the general public, among others. Who do you 
consider to be your agency's primary stakeholders and how will you 
incorporate their views into the strategic plans?
    Response. GIPSA's primary stakeholders are the producers, buyers, 
and sellers of livestock, meat, poultry, cereals, and oilseeds. The 
input of these stakeholders was essential in the preparation of GIPSA's 
strategic plan and will be essential in developing future annual 
performance plans and strategic plans. The Agency maintains open 
communications with our stakeholders via meetings, educational 
exchanges, surveys, and other available forums.
    GIPSA is developing tools to solicit our stakeholders' input on 
program performance. For example, the Agency recently completed a 
comprehensive survey of customers of the official inspection and 
weighing system. GIPSA is using the data to quantitatively assess 
customer satisfaction in terms of the key factors identified in the 
Agency's strategic goals and objectives: timeliness, accuracy, 
consistency, cost-effectiveness, responsiveness, and professionalism. 
This quantitative assessment will allow GIPSA to further measure and 
improve the national inspection and weighing system's performance this 
year and in the future.
    In addition, GIPSA's field and regional offices distribute, on an 
ongoing basis, a customer comment card which provides the Agency's 
customers with a quick, convenient way to provide feedback about the 
professionalism, courteousness, responsiveness, clarity, objectivity, 
and impartiality of the Agency's employees. The Agency uses all 
stakeholder feedback in reviews of the Agency's strategic goals and 
objectives and to continue to improve the quality of service delivery.
                     duplication of federal efforts
    Mr. Skeen. For the Results Act to be successful, agencies with 
similar missions, goals, or strategies will need to ensure that their 
efforts are coordinated. What other federal agencies are you working 
with to ensure that your strategic plans are coordinated? What steps 
have you taken to ensure that your efforts complement and do not 
unnecessarily duplicate other federal efforts?
    Response. The three agencies within the Department's Marketing and 
Regulatory Programs (MRP) mission area--GIPSA, the Agricultural 
Marketing Service (AMS), and the Animal and Plant Health Inspection 
Service (APHIS)--have developed a mission area strategic plan. As the 
plan demonstrates, each agency is unique in its mission and function, 
but there are continuous interactive opportunities within the mission 
area. Whereas the strategic goals relate to broad directions set by the 
leadership and the combined management teams of GIPSA, AMS, and APHIS, 
they will be implemented through general objectives set forth by each 
individual agency. These objectives indicate that there are many 
opportunities for shared responsibility. For example, the MRP Customer 
Services Team, supplies GIPSA with administrative, financial, and 
personnel support. GIPSA's success in delivering programs and services 
hinges directly on the Agency's ability to obtain these services in a 
timely, responsive manner. As a result, GIPSA and MRP Customer Services 
Team have developed a close supplier-customer relationship. In all 
instances, efforts have been, and will continue to be, made to 
eliminate duplicative tasks.
    GIPSA also works closely with other Federal agencies. Within the 
Department, GIPSA has developed close working relationships with the 
Foreign Agricultural Service and the Agricultural Research Service to 
respond to issues of interest to international customers. This includes 
concerns about Tilletia controversa (Kuhn), also known as TCK smut, 
Karnal bunt, and other sanitary and phytosanitary issues that may 
arise. Outside of the Department, GIPSA cooperates with the Department 
of Justice's Anti-Trust Division, the Commodity Futures Trading 
Commission, and the Small Business Administration on investigative 
matters.
                       congressional consultation
    Mr. Skeen. The Results Act requires agencies to consult with 
Congress as they develop their strategic plans. Since these plans are 
due in September, now is the time for agencies to begin the required 
consultations. What are your plans for congressional consultations as 
you develop your strategic plan? Which Committees will you consult 
with? How will you resolve differing views?
    Response. All USDA Mission Areas/Agencies have prepared draft 
Strategic Plans which are currently being reviewed by an Under/
Assistant Secretary (or other relevant official), the Senior Policy 
Staff and the Secretary. Upon completion of the review, the Department 
plans to provide copies of the Strategic Plan (including an overall 
Departmentwide Executive Summary and the Strategic Plans for individual 
Mission Areas/Agencies) to relevant Congressional Committees. 
Thereafter, we will look forward to meeting with Members or Staff to 
discuss our Strategic Plan and to solicit their input and advice on 
refinements to that Plan. We plan to provide copies of the Department 
Strategic Plan to the following Committees:
          House Agriculture Committee;
          House Appropriations Committee;
          House Economic and Educational Opportunities Committee;
          House Government Reform and Oversight Committee;
          House Resources Committee;
          Senate Agriculture, Nutrition, and Forestry Committee;
          Senate Appropriations Committee;
          Senate Energy and Natural Resources Committee; and the
          Senate Governmental Affairs Committee.
                           change for results
    Mr. Skeen. In passing the Results Act, Congress sought to 
fundamentally change the focus of federal management and decision 
making to be more results-orientated. Organizations that have 
successfully become results-orientated typically have found that making 
thetransformation envisioned by the Results Act requires significant 
changes in what they do and how they do it.
    What changes in program policy, organization structure, program 
content, and work process has the agency made to become more results-
orientated?
    Response. GIPSA's organizational structure and business processes 
are under review, and further changes are possible. With regard to 
changes in organizational structure, GIPSA's Technical Services 
Division (TSD) consolidated functions performed at the Commodity 
Testing Laboratory (CTL) located in Beltsville, Maryland, with the 
quality assurance and quality control programs at the Technical Center 
in Kansas City, Missouri, in April 1996. The consolidation of TSD and 
CTL improved customer service and established a single point of contact 
for field customers. The new structure has provided a flexible 
organizational structure to meet service opportunities and provides 
increased uniformity in reporting data and information.
    GIPSA has developed an investigation and case tracking system which 
will allow the Agency to track regional and industry-wide 
investigations, thus increasing efficiencies for the Agency and 
customers alike.
    GIPSA is in the process of implementing an enhanced quality 
assurance and quality control program to ensure the quality and 
accuracy of inspection results nationwide. The new program will include 
a balance of national and localized monitoring. A greater emphasis will 
be placed on proactive actions to prevent problems from occurring, 
rather than reacting to problems once they have occurred. Work on this 
program continues and implementation is scheduled for fiscal year 1997.
    GIPSA also continues to develop a telecommunications network that 
will allow electronic mail and daily data sharing between all offices 
within the official inspection and weighing system. Among other things, 
the network will allow GIPSA to create a national grain quality 
database that will have many uses, including providing a dynamic 
picture of nationwide grain trends and allowing timely responses to 
potential problem areas. GIPSA's target is to achieve 100 percent 
linkage of all offices in fiscal year 1998.
                        managers' accountability
    Mr. Skeen. How are managers held accountable for implementing the 
Results Act and improving performance?
    Response. In the spirit of the Results Act, the three agencies 
within MRP are working together to evaluate and redesign the mission 
area's performance evaluation process. In conjunction with the mission 
area's work in this area, GIPSA is developing a proposal to pilot test 
a redesigned performance appraisal system within the Agency. The pilot 
would be predicated on the multi-rater assessment concept and would 
incorporate the Agency's annual performance measures and strategic 
goals into the performance appraisal process.
                           use of results act
    Mr. Skeen. How is the agency using Results Act performance goals 
and information to drive daily operations?
    Response. As a result of the Agency's focus on results, increasing 
automation, and the commensurate increase in available data, GIPSA's 
focus will continue to shift from performing specific analyses to 
evaluating system performance and identifying improvement opportunities 
that benefit service providers. The integration of automation into the 
Agency's business processes also means that all aspects of GIPSA's work 
have, and will, become increasingly interconnected and interdependent. 
Interdisciplinary teams that cross-cut traditional organizational 
boundaries and that bring together a diversity of skills and 
perspectives will be the key to the Agency's success in continuously 
improving daily operations, programs, policies, and the Agency's work 
environment.
    Other examples of the Agency's progress include: development of an 
employee idea hotline; strengthening of the Agency's partnership 
efforts with State Departments of Agriculture and private inspection 
entities; and enhancement of outreach efforts to customers. All 
employees are encouraged to use information gathered from customer 
surveys and comment cards to strengthen daily communications with and 
service delivery to the Agency's customers.
                             concentration
    Ms. Kaptur. Please describe your activities to help farm producers 
deal more effectively with increasing concentration in the meatpacking 
industry. What additional activities are you planning to take up with 
the increase you requested for FY 98?
    Response. A major initiative of the Agency is to ensure the current 
level of concentration in the meatpacking industry is not deleterious 
to competition and packers are not engaging in any practices that have 
the effect of diminishing competition. The additional funds requested 
for fiscal year 1998 are needed for GIPSA to more aggressively pursue 
anticompetitive practices related to industry concentration. The 
additional resources will allow us to integrate more economic, 
statistical, and legal expertise into investigative units that conduct 
investigations involving anticompetitive practices and to step up the 
number of regional and industry-wide investigations. The funds will be 
used in 1998 to conduct major anticompetitive practices investigations 
and detailed analyses in the slaughter steer and heifer, slaughter hog, 
and slaughter cow industries. This work will require additional 
personnel with economic, statistical, and legal expertise.
    Ms. Kaptur. Is the focus of your activity strictly the red meat 
industries? Do you have staff looking into concentration in the poultry 
industry? Describe your activities to assist contract poultry growers 
deal with increased concentration in the industry.
    Response. GIPSA is concerned about the level of concentration, in 
both red meat and poultry. At the regional level, however, there is 
concern that the poultry industry may enable integrators to use their 
market strength to the detriment of contract growers in some areas. The 
additional $750,000 requested for poultry compliance is necessary if 
the Agency is to initiate and perform in-depth compliance 
investigations that directly affect grower settlements. For the past 
several years, the Agency's poultry work has been restricted to 
investigation of complaints received from poultry growers. These 
additional funds would allow the Agency to investigate many of the 
contractual concerns being iterated by many contract growers. The funds 
will be used to place additional investigators in the field to conduct 
broad industry-wide investigations. This will enable us to examine the 
effects of practices that impact grower performance and pay.
  Michael V. Dunn--Assistant Secretary of Agriculture, Marketing and 
                          Regulatory Programs
    Michael V. Dunn was sworn in as Assistant Secretary of Agriculture 
for Marketing and Regulatory Programs on Dec. 28, 1995, after being 
confirmed by the full Senate on Dec. 22 as assistant secretary and 
member of the Commodity Credit Corporation board of directors.
    Dunn manages the three U.S. Department of Agriculture agencies 
responsible for many aspects of the marketing, protection, quality and 
transportation of the nation's food, feed and fiber supply. Those 
agencies are the Agricultural Marketing Service, the Animal and Plant 
Health Inspection Service and the Grain Inspection, Packers and 
Stockyards Administration.
    Prior to this appointment, Dunn served as Acting Under Secretary 
for Rural Economic and Community Development at USDA. He was also 
Administrator of USDA's Farmers Home Administration
    Before joining USDA in November 1993, Dunn was vice president of 
the National Farmers Union, in charge of its Washington operations. 
Prior to that, he worked for Senator Patrick Leahy on the Senate 
Agriculture Committee. He is a former commissioner of the Iowa 
Development Commission and was executive director of a regional 
planning and economic development district. He also served as a city 
official in his hometown of Keokuk, Iowa and as Midwest director for 
USDA's Farmers Home Administration from 1977 to 1981.

[Pages 175 - 492--The official Committee record contains additional material here.]


                                         Wednesday, March 19, 1997.

                 NATURAL RESOURCES CONSERVATION SERVICE

                               WITNESSES

JAMES R. LYONS, UNDER SECRETARY, NATURAL RESOURCES AND ENVIRONMENT
PAUL W. JOHNSON, CHIEF, NATURAL RESOURCES CONSERVATION SERVICE
GARY A. MARGHEIM, ACTING ASSOCIATE CHIEF, NATURAL RESOURCES 
    CONSERVATION SERVICE
THOMAS A. WEBER, DEPUTY CHIEF FOR MANAGEMENT, NATURAL RESOURCES 
    CONSERVATION SERVICE
LAWRENCE E. CLARK, DEPUTY CHIEF FOR PROGRAMS, NATURAL RESOURCES 
    CONSERVATION SERVICE
CAROLE JETT, ACTING DEPUTY CHIEF FOR SOIL SURVEY AND RESOURCE 
    ASSESSMENT, NATURAL RESOURCES CONSERVATION SERVICE
FEE BUSBY, DEPUTY CHIEF FOR SCIENCE AND TECHNOLOGY, NATURAL RESOURCES 
    CONSERVATION SERVICE
STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

    Mr. Skeen.  The Committee will come to order.
    This afternoon we have the final USDA 1998 budget hearing. 
The Natural Resources Conservation Service has the honor of 
being the last agency, and one of the most important, I might 
add.
    At the table representing conservation programs are Jim 
Lyons, the Under Secretary for Natural Resources and 
Environment; and Paul Johnson, the Chief for the Natural 
Resources Conservation Service.
    Jim, we have your statement, which will be included in its 
entirety, in the record. We'd greatly appreciate it if you'd 
briefly summarize it, and we'll get on with the last agency 
that we're going to deal with. Maybe we'll dig up the money in 
the meantime.
    Mr. Lyons.  Very good. Well, does that mean we get our fair 
share plus what's left over? That would be alright?
    Mr. Skeen.  Depends on what you say fair is?

                Opening Remarks by Under Secretary Lyons

    Mr. Lyons.  Well, thank you, Mr. Chairman. It's always a 
pleasure doing business with you.
    I'm of course, accompanied today by Paul Johnson, the Chief 
of the Natural Resources Conservation Service; and Steve 
Dewhurst, who's in charge of the Policy and Budget shop, at the 
Department of Agriculture.
    As you know, Mr. Chairman, NRCS is an agency with a long 
and very successful history of work on the landscape, with 
farmers and ranchers, local communities, and more and more with 
urban and suburban residents, trying to address their 
conservation and their natural resource management concerns. A 
number of things have, I think, added to our success as of 
late. And that's what I wanted to address today and focus on, 
in terms of our budget request for fiscal year 1998.
    The critical question, I think, given the new rules and 
responsibilities that we have in implementing the new 
conversation tools in the 1996 Farm Bill, is what resources 
does it take with today's changing technologies and challenges, 
for NRCS to be able to work effectively and in partnership with 
the conservation districts and the other federal, state and 
local partners that we work with?
    Of course, not only to produce food and fiber, which is a 
critical part of the role we play in the domestic and the 
international economy, but also, the role we play in producing 
clean water, in maintaining productive and high quality soils, 
and promoting improvements in wildlife habitat, and many of the 
other environmental benefits that come from the work we do on 
the landscape. What does it take to help America's private 
lands fulfill the promise that Paul outlined in a booklet I 
hope you've had a chance to see, ``Geography of Hope?'' These 
are the key questions we had in mind in putting together our 
budget, and I'd like to highlight some of that now.
    We believe this budget, structured and constrained as it is 
due to our joint commitment to balance the budget by 2002, 
answers a lot of those questions. The budget retains its 
emphasis on Conservation Operations as the key to getting 
conservation on the landscape.
    We are asking for increases to cover some of our pay costs, 
and in particular, to increase the level of work we're going to 
do on private grazing lands, to a program we call the Grazing 
Lands Conservation Initiative.
    We are seeking to increase the rate at which we convert 
operations that we now have, to geographic information systems. 
And also, to enhance our ability to provide watershed based 
planning assistance, which is critically important as we start 
to look at the landscape in its entirety.
    It's through Conservation Operations that we put people on 
landscape, who are able to work with conservation districts 
throughout the country, to work on natural resource concerns 
and the challenges that we face. And it will be through 
Conservation Operations we anticipate seeing thegreatest 
benefit from, the locally led conservation initiative that we have 
undertaken.
    It is also through Conservation Operations that we'll do 
the critical work of implementing the conservation compliance 
and swampbuster provisions of the Food Security Act. NRCS' 
locally led initiative will also do something else. It will 
help us guide and shape, to the fullest possible extent, every 
USDA conservation program activity at the state and local 
level. That's our intent with the Small Watersheds Programs, 
the new EQIP Program; the rules for which soon will be issued, 
with the Conservation Reserve Programs, continue to sign-up or 
buffer and filter strips, which we think will do a great deal 
to address water quality concerns throughout the nation.
    And in particular, to focus on some related issues like 
threats to salmon in the Pacific Northwest and to other water 
quality concerns. The Wetlands Reserve Program, the Forestry 
Incentives Program, plus the WHIP Program, which we discussed 
at length with Chairman Cochran yesterday, who authored that 
program and the Farmland Protection Program.
    All these programs are either up and running or are close 
to it. We're excited about the ability to put together this 
conservation tool kit, if you will, and put people out on the 
landscape, to help work with land owners, to apply those tools, 
to get the best conservation we can for the dollars we have to 
invest. Another prime example of a program that we think has 
been very effective is the RC&D Program.
    You note in the budget this year, that there is an $18 
million increase for support to watershed councils and related 
interests. We'd like to work with you in that particular area, 
Mr. Chairman. We think there is value in increasing investment 
in RC&D's.
    We also think though, it's critically important that RC&D's 
have the technical support that's necessary from conservation 
districts and from NRCS field staff, to get the job done. The 
two have to be in place in order to be successful.
    One of things I think that's so amazing and exciting about 
what we're doing and what NRCS is doing, is that we're doing it 
through and consistent with our philosophy of a voluntary 
approach to conservation. The more I work at this, Mr. 
Chairman, the more I'm amazed, and frankly, grateful that other 
agencies, which have, albeit different responsibilities, 
whether it's protecting endangered species or fish, or working 
with us on other roles on the landscape, more and more they 
look at NRCS with envy because of our ability to work directly 
with land owners, providing incentives, assistance, and 
guidance in getting good conservation on the landscape.
    And I think it's that kind of partnership that's critical 
to the success we've realized so far, and would be critically 
important to the successes we realize in the future. The 
greatest conservation challenge this nation will face, Mr. 
Chairman, is the conservation on the private lands. That's the 
issue that Paul highlighted in the ``Geography of Hope.'' And 
it's an issue that the Secretary addressed as he gave a keynote 
speech Monday, at what's called the North American Wildlife 
Natural Resources Conference, which is the largest professional 
conference of its kind. USDA is uniquely positioned with the 
tools we've gotten in the 1996 Farm Bill, and with the support 
you've provided us in recent years, and hopefully will in 
fiscal year 1998, to get out there and apply conservation on 
the landscape that represents 70 percent of America.
    We're excited about the opportunities. We're up to the 
challenges and hopefully, with your support, Mr. Chairman, 
we'll do even a more effective job in years to come. We 
appreciate the support you provided us so far, and we look 
forward to working with you in the future.
    [Clerk's note.--Mr. Lyons' prepared statement appears on 
pages 670 through 704. Biographies of Mr. Lyons and Mr. Johnson 
appear on pages 668 through 669. The budget justifications 
appear on pages 705 through 853]
    Mr. Skeen.  Thank you very much. Paul Johnson, we've 
enjoyed reading your book, and I think we're going in the right 
direction. I think your philosophy is really getting back down 
to the real business of conservation work. You've outlined it 
very well. Do you have anything you'd like to add?
    Mr. Johnson.  As usual, I do. Thank you, Mr. Chairman, for 
the opportunity to be here.
    Mr. Skeen.  We don't want you at a loss for words.

                     opening remarks by mr. johnson

    Mr. Johnson.  The ``Geography of Hope,'' by the way, is the 
work of a whole agency and the people we serve and we're trying 
to capture in that, the feelings that people have across this 
country, who do work on their private land day in and day out.
    On the way up here today, I mentioned to Steve Dewhurst, 
that we were the last ones here and was it worth coming? His 
response was, they always listen to the last one. So, don't 
leave, I'm not done. In fact, in trying to figure out what to 
say that would influence you, I thought the best thing to say 
is, you need to know you've got the best staff in all of 
Congress. So, if that doesn't influence this process----
    Mr. Skeen.  They appreciate that. We have no argument 
there.
    Mr. Johnson.  Well, first of all, we have four new deputy 
chiefs since the last time I was here. We have Larry Clark, who 
is now Deputy Chief for Programs; Tom Weber, Deputy Chief for 
Management; Carole Jett, Deputy Chief for a new arena that we 
felt really needed emphasis and that's Soil Survey and Resource 
Assessment. We don't want to leave Soils behind as we become a 
Natural Resources Conservation Service.
    Mr. Skeen.  Absolutely not.
    Mr. Johnson.  And then, Fee Busby, who is our new Deputy 
Chief for Science and Technology. We also have a new Acting 
Associate Chief, Gary Margheim, who has been with this agency 
for a long, long time. As you know, Pearlie Reed was asked to 
take up the Assistant Secretary job. And so, we have Gary on 
now as the Acting Associate Chief.
    Mr. Skeen.  I met Pearlie yesterday, I believe.
    Mr. Johnson.  Yes. We'll miss him a great deal. It'll take 
four Gary's to make up for it. But he'll learn fast.
    Mr. Skeen.  We're proud of him.
    Mr. Johnson.  This is my fourth hearing before you, And it 
seems like a life time. But it's, as you look back on it--not 
because of you.
    Mr. Skeen.  We know what you mean.
    Mr. Johnson.  I should stop now.
    Mr. Skeen.  We have the same feeling from up here 
sometimes.
    Mr. Johnson.  Yes, I know. The first two years were the 
toughest.
    Mr. Skeen.  So, you're doing great.
    Mr. Johnson.  Anyway, we wanted to mention a few of the 
things that have gone on in the last four years. As you know, 
we've restructured the agency. We have a whole batch of new 
state conservationists and regional conservationists. We want 
you to know that they are a fine bunch.
    Our agency does not pick people out of the air. But they 
come up through the system and all of these people have worked 
from the ground on up through the system. We're very proud of 
our people.
    As you've heard me say over and over again, we're an agency 
that is filled with very good people. It really is a national 
treasure; the expertise that we have. We have depth, and we 
have strength. But we continue to upgrade our skills. I think a 
good example of that is what we've done just this last year in 
the grazing lands arena.
    As you know, we stepped out a year or two ago with a very 
strong support of the Grazing Lands Conservation Initiative. 
And I'd cite for you just a half a dozen things that we've done 
in that arena, to give you an example of how our agency 
continues to grow and build its expertise.
    We have more than 100 new grazing land specialist positions 
within the agency today, than we had a year ago. Fourteen new 
states now have grazing land specialists, that didn't have them 
a year ago. We have over 330 nationwide, that are focusing on 
grazing lands.
    We trained over 800 people last year in grazing lands 
techniques, all the way from range land to pasture land work. 
We have 3,000 additional grazing land owners receiving 
assistance on their lands, than we've had in the average of the 
last three to four years. So, we think that we've made great 
strides there. There's a terrific demand out there for that. If 
we had more people we'd do more. But we're working at it.
    We have over 60 special projects going on in grazing lands 
across the country today. Marketing and outreach is part of 
every one of our regions now, to make sure that land owners 
know that we have these services available and would like to 
work together with them.
    A good example was in my home town newspaper. Just 
recently, I picked up a copy of it. They had their Soil 
Conservation Week in a special section. A good share of that 
was about grazing lands issues. I've never seen that before, 
for a dairy area.
    But there were a number of examples of intensive rotational 
grazing and things like that. So, it is moving along and our 
people are building on the strength that we have, and I think, 
getting better at it very fast. We continue to try to move a 
higher percentage of our people into the field. Although we've 
lost an awful lot of people, we're trying our best to do that.
    As part of that, we're also continuing to revamp our 
information technology, so that those that are in the field 
don't have to sit behind computers a good share of their time.
    Although I can't tell you we're where we need to be, we are 
moving in that direction. I think partnerships have never been 
stronger than they are today. And a good example is with the 
new CRP sign-up and the information that we're getting back 
from across the country.
    Probably never before have we delivered a Federal program 
with so many groups helping out. We've got people coming in 
donating time in the office, from state agencies, to other 
federal agencies, to nonprofit groups. The wildlife groups, for 
example, are providing help, and a number of other groups. So, 
I think, at least from my experience, and that goes back many, 
many years with the soil conservation movement, I've never seen 
such participation and such partnership.
    We also have just established a new partnership with the 
Wildlife Habitat Council, which is a group of corporate 
America, to try to get them to pay more attention to their 
corporate lands. We're working together with them. We now have 
a new effort working with urban people, trying to bring some of 
the agricultural practices into the urban areas, but on a much 
smaller scale. We're doing that for two reasons. One is to try 
to get people to understand agriculture better.
    But secondly, to break down these barriers between urban 
and rural and get people to recognize, that even in your 
suburban backyard, you can do some of the things that we're 
doing on agricultural land, such as mulching, and composting, 
and the establishment of small wet areas for wildlife, that 
sort of thing.
    On the other programs, as Jim mentioned, we are 
implementing them. Farmland protection is implemented and is 
off and running. I would like to highlight an issue there 
though. As we travel around the country and talk to our people, 
I think there's more and more concern developing about farmland 
protection and landscape protection, as we see much of our 
American landscape being divided up into smaller and smaller 
pieces and sprawled, spreading out from our urban areas. I 
think it's an issue that we need to spend some time thinking 
about.
    I think the American Farmland Trust has a report coming out 
tomorrow. And I think we all ought to take a look at it. But 
beyond that even, what's happening in the West even, with many 
of the ranchers being split into small pieces, and ranchers, I 
think, are being--are very concerned about that. And I think we 
all ought to be. I don't know where we should go with it. But 
we'd like to work with you on that issue.
    Conservation compliance, which began in 1985, was fully 
implemented by 1995. Our numbers show that we're holding our 
own. We wish we could continue to reduce soil erosion, but 
given the freedom to farm legislation and uncertainty in the 
market conditions, the fact that we are holding our own and 
we're not slipping backwards, I think is a good sign.
    We did a mini status resource inventory of our statistical 
assessment of erosion on crop land. Our numbers are showing 
that we're holding right where we were a year ago, when we did 
the same study. So, I think that it's good in that we haven't 
slipped. But we need a renewed effort, I believe, to keep going 
in the right direction, because we certainly have a ways to go.
    Our State Technical Committees are up and running. And the 
experience in that process has been a good one. I think we have 
a lot more people sitting at the table working together on how 
to make these programs work and how to tiethem together with 
state and local programs and programs that nonprofits can bring to the 
conservation effort, as well.
    As Jim mentioned, locally led conservation is on it's way. 
And it's interesting to see it develop. We have many different 
ideas. In 50 states, we have 50 different mind sets. And even 
within those, as you know, there are different groups.
    And so, our conservation districts are experimenting with a 
number of ways to try to get the community more involved, set 
some goals for themselves, and then use our programs to move 
forward on it.
    As we mentioned to you, the ``Geography of Hope'' is out, 
and it's getting very good play across the country from I think 
all sectors of our society. There's a theme there that I think 
we need to continue to work on. And that is, that farmers and 
ranchers want to be good stewards. By and large, they are. And 
a good public, private partnership is very, very much supported 
by people across this country.
    But I don't want to leave you with the feeling that our job 
is done, or that we're really happy with everything. As we look 
at our numbers and look at where we are, we still have some 
real hot spots in soil erosion in the country. We have some 
areas, such as areas in the Paloose, in west Texas, central 
plains of Colorado, Loess Hills of my home State of Iowa, where 
we got soil erosion in some areas. It still exceeds four times 
the sustainable rate.
    We've got to renew our efforts to work with land owners and 
to try to get good science and technology to work on that. Even 
with the remarkable progress that we've made over the past 10 
years, 44 million acres of highly erodible land are still 
eroding at more than two times the sustainable rate, over the 
long haul.
    Over 60 million acres of non-highly erodible land are 
eroding at levels that are above what we would consider 
sustainable. We really need a proactive effort, to continue to 
work with. We think that the voluntary approach does work. 
We've made great strides. The trends were in the right 
direction. The status is still not where we want it. And so, we 
want to make you aware of that.
    As far as water quality goes, agriculture has made great 
strides there. But as we look at non-point source pollution 
issues, agriculture is recognized as a major source. We think 
that with continued efforts, we can continue to make progress.
    Ground water overdraft is still serious in much of our 
country. In fact, 21 states were reporting salt water 
intrusions into fresh water aquifers. As we pump water, water 
seeps in. These are things that are red flags that tell us 
we're not quite there yet.
    Over 60 percent of all of our range lands still have 
problems; in some cases, serious problems, such as noxious and 
exotic weeds. We know how to do better. But it's going to take 
a major effort to do that.
    What is our response to all of this? We've been told by 
many that we're too aggressive, that our goals are unrealistic. 
But my answer to that is, I don't agree. I think, if anything, 
we're too humble, and perhaps, even too wimpy in some cases. We 
ought to be willing to move out in a very aggressive way in 
partnership with land owners. Land owners want to do better and 
I think we can do that.
    But even if we meet our most aggressive goals by the year 
2002, 90 million acres of our crop land will still be eroding 
at unsustainable rates. We're saying that we can lay out, and 
this is a wild idea, but we think that we can lay out two 
million miles of vegetated buffers by the year 2000.
    Even if we could achieve that, that would still be only 
half of what the need is out there. We view, and in fact, many 
producers view these buffers as a buffer between a regulatory 
approach and a voluntary approach to water quality in the 
future.
    Even if we work as hard as we can with the resources we 
have, 55 percent of our private range land will still be in 
need of conservation efforts. And we'll have many watersheds 
that will still be untreated. Can we afford to do better? I 
believe we can. If we double what we now have in conservation 
on private lands we will get to the level that we were at in 
1937.
    Let me say that again. If we double our present effort, our 
resources, our financial resources, from the Department of 
Agriculture in conservation on private lands, in real dollars 
we will be at the level that we were in 1937. We're less than 
half of that level right now.
    Our conservation budget is only 17 hundredths of one 
percent of the federal budget in 1996. If you look at public 
lands, versus private, and please, I do not want to take money 
from private lands. But we're running at about $10 per acre, 
per year investment on public land. And private lands are 
running at about $2 per acre, per year, to get conservation 
benefits.
    Now, I recognize that public lands are a national treasure 
and something that we want to care for. But private lands are 
also in real need of conservation. We're here to ask you for 
your support on that.
    What would another billion dollars in conservation amount 
to? We've calculated that it's 13 hundredths of one percent of 
farm real estate value. It's 22 hundredths of one percent of 
our food spending; 62 hundredths of one percent of our 
entertainment spending in this country annually, and 55 one 
hundredths of one percent of our cash receipts from farming.
    We are a rich nation. We're a nation that is probably as 
rich as any nation has ever been on the face of this earth. I 
think, if there's one disappointment that I have, after the 
wonderful years and the honor of being part of this process, 
it's that we still have not, it seems, gotten through to the 
American public, the importance of conservation on private 
lands and the need for support on that.
    I'd like to close with a quote from the Geography of Hope. 
It's the very end of our publication. It states as follows. 
``As we move into the next millennium, our nation must strive 
for a state of harmony. We can no longer be satisfied with 
slowing erosion, water pollution and other forms of land 
degradation.
    ``Harmony will demand that we set our sights higher, to 
improve the land upon which our destiny rests, by restoring 
those places that are damaged, by enhancing those places, whose 
condition is merely adequate, and by protecting those areas 
that remain pristine.
    ``Achieving the ideal may well prove impossible, but 
helping farmers, ranchers and others try, is the fundamental 
mission of our agency, the Natural Resources Conservation 
Service. Only then will private land become an integral part of 
our nation's geography of hope.''
    Again, I want to say thank you for the support you've given 
us. We'd like to take your questions at this time.
    Mr. Skeen.  Well, let me say at the outset, you touched 
very close to my heart and mind, as a soil conservation 
engineer, which was my field. I have a real desire to see us do 
something that we hadn't done in a long time, since the Dust 
Bowl days.
    We had a conservation program that worked, because they put 
the conservationists and the technological people out in the 
field to do the job. Slowly we eroded it away. We pulled the 
technicians out. We stuck them in an office and put them with a 
telephone in one ear, and their work and contacts were limited. 
We decided to leave private lands out, because the Federal 
government had such a big stake in the public lands.
    You can't do conservation work on one, if you don't do it 
on both to be effective. You've brought that philosophy back, 
and I want to commend you for it. All of you in the Department 
have gotten down to the real bare--I don't want to use the 
terminology bare earth--but back to the real problem of dealing 
with the earth and the fields of production, be they cropped or 
grazing and so forth. We're going in the right direction.
    Of course, we're running into the problem now, where are we 
going to get the money? And I just want to say that the 
philosophy is fine. Now it's up to us to come up with the 
funding. We're going to try to do that.
    So, we appreciate very much the work that you've done, the 
philosophy that you've propounded, because it's brought us 
back, once again, down to earth. And let's get the job done.
    Well, let me start with the Watershed Program, Paul. The 
budget request for the Watershed and Flood Prevention 
Operations is $100 million. The proposal is to shift $60 
million for technical assistance to the Conservation Operations 
Program, and $40 million for financial assistance to ongoing 
projects in the account. How many ongoing watershed projects 
are there?

                           watershed projects

    Mr. Johnson.  I'm told that it's nearly 600 projects out 
there right now. I think we have a backlog on those that we 
haven't started, in fact, over $800 million worth of projects.
    Mr. Skeen.  But you've got 600 operational projects going 
on at the present time?
    Mr. Johnson.  That's right.
    Mr. Skeen.  What's the financial assistance needed to 
complete all the ongoing projects you have underway?
    Mr. Johnson.  That is the $800 million and some.
    Mr. Skeen.  $800 million?
    Mr. Johnson.  The backlog. Yes.
    Mr. Skeen.  $800 million?
    Mr. Johnson.  Yes.
    Mr. Skeen.  How many projects are on the waiting list to 
receive financial assistance?
    Mr. Johnson.  Once again, you got my partner here saying, 
oh, Lord.
    Mr. Skeen.  He isn't going to help you right now. He told 
us to take care of this.
    Mr. Johnson.  Well, the total operational projects right 
now are 1,600.
    Mr. Skeen.  Sixteen hundred.
    Mr. Johnson.  So, we're probably in the neighborhood of 
close to 600 probably currently being installed.
    Mr. Skeen.  So, you've got 600 of these that have not come 
to completion?
    Mr. Johnson.  Yes, and even those that are being funded, 
I'm not sure all the money is in the bank to complete all of 
those. We work at it as we get money.
    Mr. Skeen.  Well, these are just things we basically have 
to know, if we're going to justify what kind of outlay we can 
get for you. How many projects on the waiting list receive 
financial assistance?
    Mr. Johnson.  I think that's in the neighborhood of close 
to 600.
    Mr. Skeen.  We can do the math.
    Mr. Johnson.  Well, we have 531 in planning.
    Mr. Skeen.  531?
    Mr. Johnson.  Yes.
    Mr. Skeen.  What amount of money do we need to complete 
those that are on the waiting list? What do we need to complete 
it?
    Mr. Johnson.  We'll have to get that to you in writing.
    Mr. Skeen.  That'll be fine.
    Mr. Johnson.  We'll give you exact details.
    [The information follows:]

    $881 million is needed to complete the P.L. 566 projects 
waiting to receive assistance. Of this $881 million, in today's 
dollars, approximately 30% is for technical assistance and 70% 
is for financial assistance.

    Mr. Skeen.  Right now, you're spending about 60 percent of 
the program on salaries?
    Mr. Johnson.  Yes. And that includes our planning for our 
watersheds and, then, the technical assistance.
    Mr. Skeen.  This is also recruitment of new technicians, as 
well or technical assistant people?
    Mr. Johnson.  Well, it certainly is supporting the 
technical assistants that we use for our Watersheds Program, 
yes.
    Mr. Skeen.  It's a little more costly than having them all 
in the headquarters some place, because you've got them 
scattered all over.
    Mr. Johnson.  They're not in headquarters, I can tell you 
that.
    Mr. Skeen.  We needed to move them out of there. The 
erosion is taking place outside.
    Mr. Johnson.  I think we have them in just about every 
State in the country.
    Mr. Skeen.  Can you tell us what the percentage breakout 
between technical and financial assistance was for the past 
five years? If you don't have that at your fingertips, you can 
just supply it also for the record.
    Mr. Johnson.  We'll supply that for the record.
    [The information follows:]

                                    WATERSHED AND FLOOD PREVENTION OPERATIONS                                   
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                              1993       1994       1995       1996       1997  
----------------------------------------------------------------------------------------------------------------
PL 534:                                                                                                         
    Technical assistance.................................    $16,438    $17,785    $10,000     $9,000     $9,000
    Financial assistance.................................     23,754     22,921          0          0          0
    Loan services........................................         80         80          0          0          0
                                                          ------------------------------------------------------
      Total..............................................     40,272     40,786     10,000     15,000     15,000
                                                          ======================================================
PL 566:                                                                                                         
    Technical assistance.................................     63,663     72,278     60,000     51,000     52,036
    Financial assistance.................................    101,343    100,098          0     34,000     34,000
    Loan services........................................        172        172          0          0          0
                                                          ------------------------------------------------------
      Total..............................................    165,178    172,548     60,000     85,000     86,036
----------------------------------------------------------------------------------------------------------------

    Mr. Skeen.  We've been waiting for the Administration to 
submit its emergency supplemental requests. I thought it was 
supposed to be here a couple of weeks ago. Can you tell us when 
we'll see it? Or is it in preparation?

                        ewp supplemental request

    Mr. Lyons.  Mr. Chairman, I think Steve has the latest 
information, in terms of the supplemental request, which I 
believe the President signed today.
    Mr. Skeen.  Today?
    Mr. Lyons.  Yes, sir. Well, we were waiting for some waters 
to recede, I think. So, we forgot what we needed.
    Mr. Skeen.  All right.
    Mr. Dewhurst.  We were told the President signed the 
request this morning.
    Mr. Skeen.  This morning?
    Mr. Dewhurst.  It should be here or almost here.
    Mr. Skeen.  What are the latest estimates for the need of 
emergency watershed work?
    Mr. Dewhurst.  The President, we believe, his request will 
ask for $84.1 million for emergency watersheds.
    Mr. Skeen.  Last week, the Secretary announced the 
preliminary State allocations for the fiscal year 1997 EQIP 
Program. Are we jumping the gun a little, since the final rules 
and regulations haven't been published yet? And in fact, you 
don't expect to publish them until sometime I believe in April, 
if everything goes the right way, and we know how seldom that 
occurs. Could you give us some idea?

                         eqip state allocations

    Mr. Johnson.  Yes. I don't think we'll be jumping the gun, 
because the final rules that deal with, certainly with how we 
allocate money are very similar to the proposed rule. So, we 
don't see major changes there.
    Mr. Skeen. Transitional?
    Mr. Johnson.  No. Our people wanted that information, as 
people come in for signing up CRP and so on, to start talking 
about the opportunities that we will have in EQIP. That's why 
we put that out.
    Mr. Skeen.  Well, you're going over the criteria for the 
breakout on the funds, as I understand it, and that's part of 
it. Did you wipe the slate clean and start all over this year 
and establish new criteria for EQIP, or did you just use the 
criteria from the four old conservation programs?

                             eqip criteria

    Mr. Johnson.  We have a set of criteria that we use, that's 
based on needs across the country, that's based on our NRI and 
our strategic planning and so on. There were 26 factors, I 
believe, included in that. That was the basis for the 
allocations.
    Then, we looked at the combined amounts that were received 
in the last three years, I believe it was, for ACP, Great 
Plains, Colorado Salinity and Water Quality Incentives Program, 
and said that we would not reduce anybody by more than 5 
percent, I believe, and increase them by more than 30. I think 
everybody just about fit within that level. So, it really is 
based on a fairly objective look at needs, these 26 points.
    Mr. Skeen.  Those estimates got to the main bulk of your 
work.
    Mr. Johnson.  Oh, yes. Yes.
    Mr. Skeen.  You were in disagreement with OMB, on how much 
you had received from EQIP for technical assistance. When we 
did the bill last year, you stated that you needed $38 million, 
to carry out a $200 million dollar program. OMB, on the other 
hand, decided to only reimburse you to the tune of some $10 
million, and they have since increased this number to $20 
million. Where does this disagreement stand today?

                     technical assistance for eqip

    Mr. Johnson.  We are still negotiating with them. They 
asked us to put together some justification for our base 
program and what the needs were out there for that. And we've 
done that. I think that, that is being forwarded to OMB, or 
maybe was yesterday, or it will be today or tomorrow. We're 
still in negotiation with them, hoping to reachthe $38 million 
mark.
    Mr. Skeen.  How much of the $200 million will you receive 
to carry out the program?
    Mr. Johnson.  Well, right now, we're----
    Mr. Skeen.  That's what you're trying to figure out.
    Mr. Johnson.  Yes. And right now, we're authorized at 20 
million.
    Mr. Skeen.  Will you appeal OMB's decision?
    Mr. Lyons.  Well, we have, Mr. Chairman.
    Mr. Johnson.  It's one constant appeal.
    Mr. Skeen.  Well, you're under appeal now?
    Mr. Lyons.  Yes. When we discussed this the other day, I 
think I misspoke somewhat. I want to clarify. You know, the 10 
percent that was in the budget reflects----
    Mr. Skeen.  We misspeak around here all the time.
    Mr. Lyons.  Oh, yes. Well, but that's what happens behind 
closed doors. We had made a request consistent with the 
instructions we got from the Committee last year.
    Mr. Skeen.  Yes.
    Mr. Lyons.  And we got a small part of that. We appealed. 
We got a little more back. We'll just keep appealing until we 
get to the right point, and hopefully we'll be there.
    Mr. Johnson.  The important issue here, I believe, is an 
understanding for a need for a base program across the country, 
to service not only EQIP, as it comes along, but emergencies 
and all of the daily work that we do together with conservation 
districts.
    And we're going to do everything we can to try to explain 
that better to policy makers here in Washington and people 
across the country. This fabric of technical assistance that's 
woven across the country is really an extremely important part 
of our conservation on private lands. And I have a feeling that 
many of us don't understand it as well as we should. And part 
of it is our fault, perhaps for not explaining it better. So, 
we are working on that.
    Mr. Lyons.  On the other hand, as you've pointed out, Mr. 
Chairman, in your remarks today and previously, you know, this 
is fairly simple stuff. It's people out on the ground, working 
with land owners one-on-one.
    Mr. Skeen.  Absolutely.
    Mr. Lyons.  If we don't have the support for that technical 
assistance, we can't deliver all the great conservation 
programs that we now have authorized through the 1996 Farm Bill 
and other legislation. It's critically important. This stuff 
doesn't happen without knowledge and exposure to the 
opportunities, that we can afford land owners, to improve their 
conservation practices. And that's why that support is so 
critical.
    Mr. Skeen.  You need $38 million, and you got $20 million. 
What programs may suffer, or will you try to eliminate any?
    Mr. Johnson.  Well, those are people. We figure about 20 
people for every million dollars.
    Mr. Skeen.  Twenty people for every million dollars.
    Mr. Johnson.  Yes.
    Mr. Skeen.  When do you expect to release the technical 
assistance allocation?
    Mr. Johnson.  They'll be released as we--we did not release 
them right away because our reimbursement for CCC programs 
depends on the work that we do. And so, we had to get the money 
out there first. And then as we do the work, then we can 
qualify for those CCC dollars. So, they'll be released as we 
carry out the program.

                      conservation reserve program

    Mr. Skeen.  On the Conservation Reserve Program, 
Congressman Peterson has introduced a bill to allow the 
Secretary to extend the expiring CRP contracts for one year. 
What's the Administration's position on this bill?
    Mr. Lyons.  Well, Mr. Chairman, we have, of course, moved 
forward with the program. We're in a sign-up now. We think that 
it's critically important that we proceed with the CRP Program 
we've laid out. We think the program is redesigned reflecting 
the direction of Congress. We'll get the most environmentally 
sensitive acres in the program.
    Criteria that are to be used to determine what lands 
qualify include soil erosion, and water quality, and wildlife 
habitat values, and a whole host of other factors. We think the 
right thing to do is to proceed and get this program on the 
landscape as quickly as possible.
    Mr. Skeen.  Well, I take it then that you've already 
explored your way of maximizing the environmental benefits of 
the new program, and that's where you're going to be putting 
the effort.
    Mr. Lyons.  We are, Mr. Chairman, we are. And by that same 
token though, we'll look and see what success we have, if there 
are inadequacies in the formula, or if it doesn't achieve the 
goals that we seek to achieve, then we'll rework things.
    Mr. Skeen.  You've got that kind of flexibility?
    Mr. Lyons.  Well, yes, we do. Yes, we do.
    Mr. Skeen.  Well, I appreciate that. Mr. Fazio.
    Mr. Fazio.  Mr. Chairman, I'll pass.
    Mr. Skeen.  All right. Thank you, sir. Mr. Walsh.
    Mr. Walsh.  Thank you, Mr. Chairman. Thank you, Mr. Fazio.
    Chief Johnson, Mr. Lyons, thank you very much for your 
testimony and for the work that you do. It's very important. I 
don't think the American public has any idea how important it 
is. Those of us who have some experience, as the Chairman does 
in this work, know how valuable it is.
    I'd also like to thank you for including our skinny on the 
state watershed project in your magazine. I think it's 
something that we can be very proud of, the cooperation that 
we've had between the Federal Government, the state government, 
and the local government.
    It just makes sense to treat the lake and watershed and 
deal with the problems, rather than treating the lake water at 
the end, after it's left the lake, filtering it, and treating 
it. It just makes a whole lot more sense to preserve the 
resource.
    I think that model is a good one. It could be used 
elsewhere. You know, I think I told you, the NY State 
Department of Environmental Conservation and the Environmental 
Protection Agency, because of two or three incidents a year of 
turbidity on Skaneateles Lake, were going to require the city 
to build about a $40 million water filtration plant. And the 
off days, the other 362 days a year, you can take a quarter and 
flip it into that lake and watch it 50, 60, 70 feet down. It 
makes no sense. This lake is pristine.
    So, the money that's being spent on an annual basis is 
essential, not only in improving the water quality, but also 
the value of theland, the value of the farms, and by the way, 
the fishing. And there's a lot to be said for good fishing. You are 
sampling it periodically?
    Mr. Johnson.  On occasion, yes. I consider it part of my 
federal duties to take a rainbow trout or a land salmon out of 
there whenever I can.
    Mr. Walsh.  And since we're partners with you, maybe----
    Mr. Johnson.  If you'd like to come up and do a field----
    Mr. Lyons.  We need to take a look at this.
    Mr. Johnson. Come up and do a field visit, we'd be glad to 
show you what a good job you're doing.
    Mr. Skeen.  That's partnership.

                environmental quality incentives program

    Mr. Walsh.  Our job is a little more difficult, as these 
programs become mandatory. So I just wanted to ask you a little 
bit about the mandatory programs. The EQIP Program, for 
example, can you comment on the initial feedback on that 
program, from the farming community?
    Mr. Johnson.  Yes. I believe that there are a lot of 
people, saying where is it? It's taken a while to pull things 
together, partly because we had to take second place to CRP, as 
we worked hard to get those rules in place and out. But, I 
think any problems that there are in it right now, are 
primarily because they haven't seen it. It's not there at their 
local conservation district office.
    We really need to take a good assessment of it a year from 
now. I have a feeling that people are going to be pretty 
excited about it. It's going to provide significant dollars to 
solve real problems.

                           mandatory programs

    Mr. Walsh.  The emphasis on mandatory programs, in the last 
farm bill, do you anticipate a level of participation in those 
programs sufficient to support the spend-outs that we've 
appropriated for those programs?
    Mr. Johnson.  We'll have to see. But I believe so. I think 
that there is a terrific demand out there, particularly as we 
put pressure on water quality issues, for example. There's a 
lot of interest in wildlife habitat. And there was a huge 
interest, of course, in farmland protection, far more. In fact, 
almost every program we run, there are many times more people 
wanting the services than we have dollars to provide.
    The WRP Program, the offers are way, way, way over any 
amount of money we have. So, I think that the demand is 
certainly there for it. I know, on CRP the sign-up that's going 
on right now apparently is very, very heavy, from what we're 
hearing.

                           program priorities

    Mr. Walsh.  Well, Ducks Unlimited sure likes the program. 
And again, we can save ourselves a lot of money in the long 
run, if we protect the soils that we have now. And I know 
that's your primary goal. If you could, in terms of your 
department's priorities, what would you list as your top two or 
three priorities? You know, we're going to have to make some 
hard decisions along the way. And if you could just, rather 
than tell us what you don't like, tell us what you like and 
what you need to do. That might be helpful.
    Mr. Johnson.  Well, we need at least $1 billion more for 
people.
    Mr. Walsh.  That's your first priority.
    Mr. Skeen.  That's a pretty good start.
    Mr. Johnson.  My dream is to be able to say that without 
anyone laughing.
    Mr. Walsh.  I hear you.
    Mr. Johnson.  Certainly, to maintain a strong technical 
expertise across the country. I assume that we will continue to 
have good financial programs available, those that were enacted 
in the last farm bill. We need those tools. And I view the farm 
programs as tools. They're pieces that you use to achieve goals 
that you set out for yourself.
    But the partnership that's out there right now between our 
employees, conservation districts and their employees, and by 
the way, there are getting to be more and more of them. I think 
that the partnership is leveraging so that people at the local 
level are saying, we want to contribute to our home place as 
well, is really to me, the heart and soul of conservation on 
private lands in this country.
    And I know that goes against the grain of people who think 
government should be smaller. And we all complain about those 
kinds of things. But it's a resource that is terribly 
underestimated. And as I've attended some meetings in the last 
few years elsewhere in the world, to see how they're trying to 
deal with these issues, I keep coming back and saying, I'm so 
thankful for those people that are out there. When I started 
farming 25 years ago, the first thing I did was to call the 
Soil Conservation Service. They came out. And although I had 
background in engineering and background in biology, they knew 
how to lay out those contour strips, and how to lay in those 
water diversions that today, make my farm much healthier than 
it was.
    So, I would put that certainly number one. I think I'll get 
in trouble if I go beyond that. There are a lot of interests. 
Certainly, watersheds are very, very important, as we look to 
the future. And we've been working with a broad array of 
people, to try to get a consensus on a watershed approach that 
deals with land treatment, as well as structures when 
necessary.
    We've got watershed coalitions farming all across the 
country. And if we can't be able to join with them and provide 
the resources; in many of the farm bill programs, are tools 
that can be used in those watersheds, if we could just organize 
around them and facilitate that locally driven process. I think 
that's very, very important.
    The others, of course, are now considered CCC funded 
programs. And I think they're all very, very good tools. I 
think all of these programs, or the actual programs, as we move 
through them, we've got to continue to ask ourselves, is this 
the best way to do it. And we're certainly willing to do that. 
We should continue to ask the producers, our customers and 
other people in our society, if this is the best way. But we 
believe it is right, now. And we want to give it a chance, to 
see how it works.
    Mr. Lyons.  Mr. Walsh, I wouldn't disagree with Paul, in 
terms of priorities. But I might emphasize one thing, because 
we had a little discussion about this earlier. Often times, we 
ignore the valuable investment in people to go out and do this 
work. We've been blessed with a farm bill that is really a 
conservation bill, the 1996 Farm Bill.
    And when I worked on the House Agriculture Committee, when 
you were first joining the Congress, of course, the debate over 
things like wildlife, in the 1990 Farm Bill, weren't positive 
debates at all. It was a debate over private property rights 
and endangered species.
    What a difference six years makes, in terms of focus. We 
have some very valuable tools to use across the landscape. We 
have land retirement tools, like the CRP, and the WRP, and the 
easement programs that are available to us.
    So, we can take the most environmentally sensitive land and 
take it out of production for a period of time, either long 
term easements, under WRP, or the 10-year set asides we have 
under CRP. We have extremely valuable and useful cost share 
assistance that we can provide the land owners, to get things 
done, to get them over the hurdle of making an investment in 
conservation, maybe because they don't have the resources or 
they don't see the benefit immediately, the long term benefit, 
that we've come to understand because of the work that we've 
done. Of course, this is our profession.
    But none of those tools are useful unless you have people 
who know how to apply them. The analogy I use is, we've got a 
great tool kit, but we need to make sure we have enough 
carpenters out there who know how to use those tools on the 
landscape.
    And so, it's critically important that we make that 
investment in that portion of the conservation operations 
budget that gets people out there to work with the land owners, 
to get the job done.
    The only other area I would add as essential as well is the 
investments we're trying to make in improving our technology. 
As all of you know, the more we learn how to use the technology 
that's available, I think the easier it is to get out there and 
have more time on the ground and less time worrying about 
paperwork.
    The more we move our databases to systems that are more 
easily obtained and used, like geographic information systems, 
the better able we are to look at landscapes and entire 
watersheds, and to share that information with communities and 
other agencies, so we can talk a common language and share 
information. I think that's critical investment as well.
    Mr. Walsh.  Well, thank you both. You know, I think what we 
learned--at least I did in that 1990 Farm Bill process, which 
was my first real inception to this process up here, is that 
conservationists and the agriculturalists really did have to 
get together to make that work.
    And it was the first time. And it wasn't always neat. But 
there was a natural alliance there. And it's kind of like the 
Members of this subcommittee, working with the inner city 
legislators, who understand the need to appropriate funds for 
nutrition, and at the same time, supporting the farmers that 
grow the food. And we have to look for those sort of synergies 
and those alliances all the way through the process.
    And more and more, we have to be willing to listen to both 
sides, when we're enacting legislation that affects rural 
America, private lands, public lands, the agricultural lands 
particularly. Thank you.
    Mr. Skeen.  Mr. Fazio.

                      conservation reserve program

    Mr. Fazio.  Thank you, Mr. Chairman. And good to see you, 
gentlemen.
    I appreciated a chance to meet with you, Paul, the other 
day. And Jim, I want to thank you for your ongoing interest in 
the Quincy Library Group and a lot of other issues in Northern 
California.
    I wanted to ask a bit about the CRP Program. I noticed in 
the Congress Daily today, Secretary Glickman's announcing that 
already, even though we have another two weeks or so to run, 
we've got 162,000 farmers signing for 13.5 million acres of 
land in the Conservation Reserve Program.
    And yet, the appearance is that, not only with Mr. Walsh's 
area, the northeast, there are not very many sign-ups, and I 
guess that's a disappointment to people in that part of the 
country. They were looking for some additional watershed 
benefits.
    But the people in my section of the country are not signing 
up as well. There is some estimate that there may be no more 
than a million acres in California signed up. I'm wondering 
what is causing there to be such a differentiation from one 
part of the country to the other, in terms of an interest in 
signing up for these programs?
    Perhaps, it's something that's obvious. And maybe it's 
something that isn't. And I'm interested in your thoughts first 
of all, particularly in light of the fact that we're talking 
about cutting back on funding for the apparently, worthy 
purpose of buying the mine near Yellowstone.
    In the face of what is obviously something the Department 
seeks just as vigorously as ever, and that is a higher than 
ever participation rate, which apparently, you're receiving. 
Yet, overwhelmingly, on a regional basis.
    Mr. Johnson.  There are a couple of issues here. One, the 
CRP is a program to set aside, or to purchase environmental 
benefits off of crop land primarily. Most crop land certainly, 
in California, is under real demand. And it seems to be 
drifting towards development, in many cases. And it's pretty 
hard to compete on a CRP contract, in cases like that.
    And in New England it's, again, I think the abundance of 
crop land or non-abundance of crop land that's important. We've 
tried to stretch it this year somewhat, by pushing the 
Vegetated Buffer Initiative; the opportunity is not to enroll 
huge acreage of land, but to enroll very strategic pieces of 
land, along rivers and streams, and small pieces of wildlife 
habitat, and things like that. And we're certainly hoping that 
will take off in the Northeast and on the West Coast.
    There's a continuous sign-up, that will continue beyond 
this one major sign-up. But as the CRP is constructed right 
now, it really is meant for crop land. I would like to see the 
continued discussion over the next few years, about looking at 
a program like CRP, for all private land, sort of the Private 
Land Initiative, where you could be purchasing these benefits 
from land that's not necessarily land that was intensively 
cropped.
    And then, to me, the next stage of that would be one where 
you would be paying, perhaps allowing some economic use of the 
land, but getting some environmental benefits along with it. I 
think that this is an evolutionary process that continues to 
move towards a time when we will be truly paying farmers and 
private land owners for good stewardship.
    It's a great program and it's, I think, much better this 
time than it was the first time. But as our ideas grow on it 
and as we get a lot of research behind us on it, and a good 
national dialogue on it, I think it will evolve more and more, 
to be used throughout the country and not just crop land.

                               watersheds

    Mr. Lyons.  I would just comment, Congressman, that the 
idea that Paul broached, about basically recognizing the values 
of watersheds upstream, and making investments in those, is one 
that's taking hold in lots of parts of the country, but 
especially in California. NRCS and the Forest Service were 
recently invited to join theCal-Fed effort. And we are joining 
as a USDA partner, in part, to reflect the fact that we're going to do 
work across the landscape, the uplands, in the Sierras, the national 
forests that we administer, as well as the downstream work.
    But more and more, there seems to be recognition. I've had 
some discussions with the rural counties out there, of the 
value of their landscape, from the standpoint of producing 
water to benefit all downstream users. And there has to be a 
way to capture that and to help those rural communities realize 
the value from their land, that others downstream captures. CRP 
affords us some of that benefit, but there are other mechanisms 
that we probably should discuss and identify.
    And we've seen the same in New York; work we did in the 
Catskills benefitting New York City and its watershed. So, that 
concept seems to be taking hold. And in fact, in many 
instances, maybe the highest and best use of some of that rural 
landscape is just that.
    Mr. Fazio.  But all these foothill areas, the areas that 
are really the gathering place of the streams that feed into 
the valley rivers, are not covered because they aren't in 
crops. They are often used as grazing land. And sometimes 
regrettably, they end up being impacted negatively by that 
intensive use that sometimes takes place.
    Mr. Lyons.  Well, some of those lands will qualify under 
the continuous sign-up.
    Mr. Fazio.  Will they?
    Mr. Lyons.  Yes.
    Mr. Fazio.  What kind of lands would fall into this 
category?
    Mr. Johnson.  It would be land that would have been 
considered pasture land, along rivers and streams. So, you 
couldn't take it right on up into the hillsides, but you could 
do the riparian areas.
    Mr. Fazio.  Which would be a very significant----
    Mr. Johnson.  It would help a great deal.
    Mr. Fazio--positive influence on our efforts to preserve 
habitat, but do it in a way that isn't totally economically 
impossible for the land owner.
    Mr. Johnson.  It's probably going to be possible to use 
some EQIP dollars to help with those issues too, I think.

                              rental rates

    Mr. Fazio.  Is this a question really, of the rental rates? 
I mean, when you look at values of land in California and 
northeastern parts of the country, and maybe some others that 
are not heavily signing up, isn't it really a question of an 
inability to go to the market rates that you'd have to go to? 
The rental rates are pretty inflexible, aren't they, when you 
look at the diversity of the country? How do you determine 
them?
    Mr. Johnson.  The rental rates are based on soil rental 
rates. We look at soil types and then look at what the going 
rate is for that for agricultural purposes. And so, it does 
vary from county to county and across the country, and the 
demand for that land for agricultural purposes. Now, we can't 
compete very well with some of the development that's going on 
across the country.
    Mr. Fazio.  But you think you can with agricultural crops. 
I mean, you know, that shouldn't be an impediment.
    Mr. Johnson.  It shouldn't be, but we are hearing, that in 
some cases, those rates are lower than are really competitive. 
We are able to pay more, I think, up to 120 percent for 
vegetated buffered areas. So, that does add a little bit onto 
it.
    We're working with the Secretary on this. I think that we 
want to take a look at it and make sure that the program does 
work all across the country and where it isn't, then we would 
certainly take a look at trying to make it work.
    Mr. Fazio.  You will be reviewing therefore, the sign-ups 
and the failure to sign up, and hope that you can bring the 
Congress some proposals to refashion it? Or do you have the 
administrative authority to----
    Mr. Johnson.  It depends on what we're asking for there. If 
it's moving it away from crop land, then it's probably going to 
take legislative authority. But with all of these programs, as 
we get them out there and they start--and they're used, we need 
to continue to assess them and reassess them.
    I don't think we should assume that we lay out one set of 
rules and then seven years later, or five years later, we come 
back and say, now maybe we can check it out and see how it's 
working. We should be doing that on a continuous process. And 
hopefully, our local-led conservation process will make us take 
a look at these things.
    And if something's not working, we should make it work. 
These are programs that belong to the American people. And if 
they're not working, we're not servicing people very well.
    Mr. Fazio.  And these rental rates are determined at the 
county level. Who is responsible for doing the evaluations of 
what would be a proper rate?
    Mr. Johnson.  Our agency is responsible for providing the 
technical input in it. And the Farm Services Agency--and I 
believe, we concur. Is that right?
    Mr. Lyons.  Yes.
    Mr. Johnson.  Okay.
    Mr. Fazio.  It's a dual responsibility, with the Farm 
Service Agency?
    Mr. Johnson.  Yes. We can each blame each other.
    Mr. Fazio.  That's what I was afraid of. Could I have 
somebody meet with me later, to talk about how these rates are 
determined, and see if I can bring up some evidence, from my 
own side of the fence, as to whether or not they are realistic 
in that context?
    Mr. Johnson.  Yes. We'll give you Tom Hebert and Larry 
Clark. How's that?
    Mr. Fazio.  How long can I keep them?
    Mr. Lyons.  How long are you going to keep them?

                       state enhancement program

    Mr. Fazio.  Well, we may just capture them out there, until 
they raise the rates. That's what we'll probably do.
    Can I ask about the State Enhancement Program? A lot of 
people are really anxious to see your program incorporated with 
habitat-wide and watershed-wide approaches, and really, as you 
mentioned, Cal-Fed comes to mind.
    You've got a couple of state programs, in Minnesota, 
Illinois, Maryland. Do you see this as a wave of the future for 
your program? And if you could, this gives me some excitement, 
given the additional flexibility to be engaged in some of these 
regional efforts. How do you see your program perhaps, changing 
over time, to be more involved in these state-driven 
initiatives?
    Mr. Lyons.  I would suggest I'm more familiar with the 
Maryland program, because I live out there, but that more and 
more states are taking advantage of the opportunity to piggy-
back, if you will, on the federal programs and I think there 
are opportunities for us to sit down with state conservation 
agencies and see how we can better dovetail the goals and 
objectives.
    One example is the very successful Farmland Protection 
Program, that California has. And while California may not have 
been as strong a beneficiary of CRP today, with farmland 
protection, certainly, it's been one of our primary partners, 
in terms of the federal-state partnership. So, I think 
hopefully, it is a wave of the future, because the degree to 
which we work together, as opposed to create duplicative 
programs or programs that create conflicting rules for 
participation, is the greater, which we're going to lose the 
opportunity to capture the benefits as efficiently as possible.
    Mr. Johnson.  We've come a long way. In 1985, when the CRP 
was implemented, I was Chair of Agriculture and Natural 
Resources Appropriations, in the State of Iowa, in our State 
House. And we had a budget of about $20 million a year, to run 
all of our programs for the state. CRP came in and within three 
years, they were spending $160 million a year. And we had no 
say on where that money went or how it was used.
    This time around, we have implemented the state technical 
committees. And so, all of our programs, all of our financial 
and technical assistance programs are guided by advice from the 
state technical committees. That brings your state programs and 
your state agencies together with us.
    So, as we make decisions on how to utilize them within a 
state, we can bring our pieces to the table, and states bring 
theirs, and local government brings theirs, and the private 
sector brings theirs. There's some exciting stuff going on now 
because of it. We're determined to continue that process. We 
think it's a healthy one and it gets a lot more conservation on 
the land.

                 resource conservation and development

    Mr. Fazio.  Yes. I just want to encourage that. I think, 
who's piggy-backing on who is a debatable issue at times. Some 
states are more engaged and some less. But to have these 
programs not coordinated, to have them occasionally working 
across purposes, is a luxury we can't afford.
    And I really think that, to a large extent, we need to have 
some formalization of a way in which we integrate state and 
federal programs, because the demand, at least from my 
observation point, is so great that I just hate to have us not 
working on the same set of criteria.
    I just wanted to ask a final related question. Resource 
Conservation districts, in my part of the country are, I think, 
an increasingly important entity, that can help us solve a lot 
of our environmental problems, from the bottom up. If we get a 
lot of people of good will together, we can do a lot. But we 
are so inadequately funded, in terms of staffing, to really 
solve the problems that confront us in this highly competitive 
environment, where so many uses of the land are in conflict.
    I'm particularly pleased to see the statistic that you 
cite, of $13 being leveraged from other sources, for every 
dollar that the National Resources Conservation Service spends 
in technical and financial assistance. We are anxious to see 
that kind of leveraging. And I think we could do a lot more of 
it if we had the resources.
    Somebody was showing me the map of the United States, by 
county. And as you see, west of the Rockies, we don't have a 
lot of counties, relative to other parts of the country. And 
yet, I sense the resources for conservation districts are being 
distributed largely based on this map. Maybe that was a thing 
of the past. I don't know. But we have a certain degree of 
paranoia, which I'm beginning to think is perhaps, justifiable.
    And in the historic allocation of your resources to certain 
parts of the country--I'm hoping to get the Chairman's support 
for this concept, because I think it's generally in the West, 
where we perhaps, haven't had the investment in the kind of 
people who can really help us solve a lot of our problems.
    Mr. Walsh.  Will the gentleman yield?
    Mr. Fazio.  Yes.
    Mr. Walsh.  Are you suggesting that California might not be 
getting it's fair share, Mr. Chairman?
    Mr. Fazio.  Well, I was trying to be somewhat more subtle 
than that. But I obviously failed. But this is, frankly, an 
ongoing concern. And I just wondered if you could put it into 
context. I know you're cutting back in other parts of the 
country. It's not easy to send people the bad news that they're 
not only losing their staff, but it's going to some other part 
of the country. It's a lot easier just to tell them it's part 
of downsizing the Federal Government and cutting back at the 
USDA.
    But we have a crying need to invest more in these 
strategies. And if we don't, we're going to end up with more 
wild and scenic, you know, more top down environmental law from 
the federal level, which many of my constituents find hard to 
accept.
    Mr. Johnson.  Well, first of all, the issue of the number 
of conservation districts, although there's certainly expenses 
per district. That's not getting conservation on the land, when 
you are spending it in renting an office somewhere.
    There are many states that wish they were like California; 
states with many, many counties, and able to consolidate some 
of these issues. And you know, the fierce independence of 
counties in our political system in this country. So, we have 
states like----
    Mr. Fazio.  Actually, leaving the Federal Government, at 
the moment. They're declaring independence. That's another 
problem I have.

                      natural resources districts

    Mr. Johnson.  Yes. Well, I won't get into that one. But the 
State of Nebraska, for example, back in the 1970s, pulled away 
and put together natural resources districts, based on 
watersheds, and moved from, I don't remember how many there 
were, but considerably less today.
    And other states look with envy at that. We try to allocate 
our resources based on the needs. And this gets back to the 
chart we mentioned with EQIP, of 26 different factors in the 
case of EQIP. And our whole planning efforts right now, are to, 
from the ground resources based on need across the country. And 
as you know, it's not easy to take from one area that 
traditionally has a certain amount and get it to the other. But 
we are very carefully and gently trying to get resources to 
where the needs are. And we'll certainly continue to work with 
you on that, as we are with everybodyacross the country.

                    eqip allocations for california

    Mr. Lyons.  And just so you know, for the record, Mr. 
Fazio, that California is going to receive a full 30 percent 
increase in the EQIP allocation that it gets, compared to the 
allocation they would have gotten under the programs that were 
combined, EQIP.
    So, we haven't lost site of California's importance. And I 
want to assure you, you have a very vocal President of the RCDs 
there; Glenda, who reminds us often that we should not neglect 
the West Coast.
    Mr. Fazio.  Well, I'm kind of sorry I asked it and that you 
answered it that way, because now I have to fight hard to keep 
it.
    Mr. Johnson.  We'll ask Mr. Latham what he thinks about it.
    Mr. Fazio.  But anyway, I appreciate the awareness that has 
been brought about. Thank you.
    Mr. Skeen.  Mr. Latham.
    Mr. Latham.  Thank you very much, Mr. Chairman. And I think 
we should look into the allocations. I'm not sure Iowa is 
getting their 30 percent increase. I just want to acknowledge 
Mr. Johnson. I think he is a great individual. He is from Iowa. 
I'm very proud of that. He has done a super job, I think.
    And the thing that I most admire is that he's been very 
much hands-on, and been willing to listen to real cases in 
Iowa. And I know we visited farms together. And I appreciate 
you very much.
    I just have one question. On CRP, there was a report or 
proposal, I guess, to take two million acres out of CRP, and 
use those dollars to buy a gold mine. I don't know where this, 
I would characterize it as nutty idea, came from. But do you 
have any comment on that?
    Mr. Johnson.  Jim Lyons does.

                       yellowstone new world mine

    Mr. Lyons.  Thank you, Paul. Yes. Well, I can explain the 
concept. Congressmen, the part of an agreement that was struck 
between Crown Butte and the Administration was to, in essence, 
purchase what would have been the New World Mine, which was to 
develop in close proximity to the Yellowstone National Park. We 
were very much concerned about some of the environmental 
affects that would have resulted from the development.
    Mr. Lyons.  I'm not quite saved by the bell am I?
    Mr. Latham.  We have 15 minutes.
    Mr. Lyons.  I know that. But in order to acquire that 
property, we had to come up with resources. The resources 
actually will come from deferred royalties, from oil and gas 
leases. It will actually pay the amount of money that's going 
to go into the acquisition of the mine.
    However, because of budget rules, we had to come up with an 
offset. And the offset that was proposed was the funds that 
would have provided for an additional two million acres of CRP 
enrollment this year. What will happen simply is, we'll defer 
that enrollment to later in the program. So, we hope it will 
have a minimal affect.
    That doesn't mean we're not strongly committed to CRP. I 
don't want you to get the wrong message, because we are and 
we've talked a great deal about its utility as a conservation 
tool. But we're also equally concerned about the future of 
Yellowstone National Park; one of the crown jewels in the park 
system. And we're doing our fair share.

                increase for CRP in california and iowa

    Mr. Latham.  Would it be possible to take this money, 
instead of out of CRP maybe, out of the 30 percent increase in 
California?
    Mr. Lyons.  Actually, there's not enough money there.
    Mr. Latham.  Oh, okay.
    Mr. Lyons.  By the way, Iowa is getting an increase, too. I 
want you to know.
    Mr. Fazio.  You didn't give them the percentage though?
    Mr. Lyons.  You don't want to know.
    Mr. Johnson.  Percentages are based on the base. And 30 
percent in California is probably about two percent in Iowa.
    Mr. Latham.  Now, there's a national leader. I thank you 
very much, Mr. Chairman.
    Mr. Skeen.  Mr. Kingston.
    Mr. Kingston.  Mr. Chairman, I pass.
    Mr. Skeen.  Mr. Fazio, another shot?
    Mr. Fazio.  I pass, Mr. Chairman.
    Mr. Skeen.  Well, we have to go vote. So, I think this is 
probably a pretty good place to bring this to an end. There's 
just one thing that has always bothered me. What's the 
difference between an environmentalist and a conservationist? 
You know, you can refuse to answer.
    Mr. Johnson.  I've seen answers on billboards and 
everything. But I don't want to repeat them to you. So, I think 
we're both.
    Mr. Skeen.  I think so too, but I think we're really 
getting down to the working edge on this thing. We have a lot 
of people who are espousing this great sentiment about 
environmentalism and conservation and I think your program 
approaches really defining it. Mr. Kingston?

                             urban forests

    Mr. Kingston.  The only thing I wanted to say, Mr. Lyons, 
is one of the things I know can typically happen, particularly 
in urban forest areas, is a city or a county decides maybe not 
to develop it, but turn it into an urban forest natural area.
    And then they put a gate on it. And they say, we're going 
to make it an outdoor classroom for kids. Kids are already out 
there riding their bikes. They're already building tree houses. 
They are already throwing rocks at tree trunks and they're 
already having a big time in the forest, learning how to 
appreciate a forest.
    And one of the things I've spoken to my local folks about, 
who have worked with you on some occasions, that mentally, we 
must remember that there's nothing more boring in the world, to 
a kid, than an outdoor classroom controlled by a teacher.
    They knew what to do with the tree. You know, and I know 
you're not pushing that philosophy. I just want to make sure 
that everybody who thinks these outdoor classrooms are next to 
heaven, it's just an adult phenomenon. Kids know what to do in 
woodlands. And they don't need any adults saying, now kids, let 
me ruin it for you.
    You know, they were having fun in the forest. You want the 
party to be fun, you get out of the room. We know what to do. 
And so, I just want to make sure that, that side is represented 
when people starttalking about urban forest and outdoor 
classrooms, that these kids are given their freedom.
    They get far more out of it because that's where they 
really bond with the forest. They fall in love with it and 
they'll grow up to fight for it. But if it becomes an 
antiseptic biology trip the only thing is, you're taking them 
outdoors. So, that's my two cents. I want to reclaim my time.
    Mr. Skeen.  The NEA just sent me a wire. You're in deep 
trouble. I want to thank you all very much. We'll go ahead and 
bring this to a close, and thank you so much for your 
responses. Thank you for all the great technological help and 
the real brainpower it takes to make these programs work, 
because I think you see it through a real realistic viewpoint. 
We appreciate it, and so, with that, we'll adjourn.
    [Additional questions and responses follow:]

                        Wetlands Reserve Program

    Mr. Skeen. One of the changes your agency made to the Wetlands 
Reserve Program, WRP, has been to authorize easement payments shortly 
following an easement recording rather than waiting for restoration 
practices to be fully installed. Under this new arrangement, do you 
require a commitment from the landowner to repay this easement payment 
if restoration practices aren't installed by a specific date?
    Response. In the case of permanent easements the restoration cost 
is 100 percent Federal. Payment for installation of the restoration 
practices is not made until the work has been completed and certified 
as meeting agency standards and specifications. Restoration associated 
with 30-year easements involves a 25 percent cost-share. The 
landowner's share for the cost of restoration is generally obtained at 
the time the easement closing occurs. The amount of the easement land 
payment is generally reduced by the amount of cost-share that is 
required of the landowner. While the landowner is usually involved in 
the restoration effort, the easement document does provide the agency 
with the full authority to implement the restoration should a problem 
develop or where the agency and landowner agree that an alternative 
approach should be taken (e.g. Ducks Unlimited agrees to implement the 
restoration effort and is subsequently reimbursed by the agency).
    Mr. Skeen. Update the table that appears on page 572 of last year's 
hearing record showing, by fiscal year, how many bids were received, 
how many were accepted, and how many easements have been filed to 
reflect actuals.
    [The information follows:]

                                                                WETLANDS RESERVE PROGRAM                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                              Number of 
                                                 No. of    Appropriation    Acres of      Number of      Acres      Number of      Acres      landowners
                    Year                         States    (in millions)  applications  applications    enrolled    landowners    recorded   w/easements
                                                                                                                     enrolled                  recorded 
--------------------------------------------------------------------------------------------------------------------------------------------------------
1992........................................            8       \1\ $46        249,059         1,314       43,428          228       43,428           22
1994........................................           20      \2\ 66.7        587,000         5,775       75,000          457       73,110           43
1995........................................          (7)      \3\ 93.2        485,933         3,335      115,000          633       93,200           59
1996........................................          (7)        \4\ 77         \5\ NA            NA   \4\ 92,405          540       49,300           27
                                             -----------------------------------------------------------------------------------------------------------
      Total.................................  ...........     \6\ 282.9      1,321,992        10,424      325,833        1,858      259,038          153
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ $5 million of the 1992 appropriation was utilized in the 1994 sign-up.                                                                              
\2\ $8 million of the 1994 appropriation was transferred to another account, and thus not available for WRP: $5 million of 1992 funds were available    
  thus the total amount available in 1994 was $64 million.                                                                                              
\3\ $890,000 was transferred from the 1995 appropriation to cover Water Bank contract extensions.                                                       
\4\ By the end of 1997, a partnership with the National Fish and Wildlife Foundation will enroll an additional 8,830 acres (40 easements).              
\5\ Due to the abundance of existing unfunded WRP applications, no regular sign-up was held and the 1996 appropriation was used to fund the 1995 sign-up
  backlog.                                                                                                                                              
\6\ Due to the changes outlined in footnotes 2 and 3 above, the actual amount available for WRP is $274 million.                                        
\7\ Nationwide.                                                                                                                                         

    Mr. Skeen. Provide two separate tables that include this same 
information for both the Emergency Wetlands Reserve Program and the new 
WRP program funded through the Commodity Credit Corporation. Include in 
the table for the new CCC funded program a breakout of the number of 
acres enrolled in permanent easements, the number enrolled in 30-year 
easements, and the number enrolled as restoration cost-shared 
agreements.
    [The information follows:]

[Page 521--The official Committee record contains additional material here.]


    Mr. Skeen. Also provide a table that shows this information for the 
partnership you have with the Fish and Wildlife Foundation.
    [The information follows:]

                                                      PARTNERSHIP WITH FISH AND WILDLIFE FOUNDATION                                                     
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                              Number of 
                                                                            Acres of      Number of      Acres      Number of      Acres     land owners
                           Year                            Appropriation  applications  applications    enrolled   land owners    recorded   w/easements
                                                                                                                     enrolled                  recorded 
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996.....................................................    $5 million         37,561           103        4,569           20      2,454.5            9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: By August 30, 1997, we anticipate that the 11 landowners and 2,115 acres currently enrolled under the Partnership Fund will be recorded, and an   
  additional 15-20 landowners and up to 4,260 acres will be enrolled and recorded.                                                                      

                     how cost-share agreements work
    Mr. Skeen. Briefly describe how the cost-share agreements work.
    Response. In those instances where a landowner may be interested in 
having a restoration project take place on his/her lands but is not 
interested in entering into any formal easement sale transaction, the 
restoration cost-share agreement would be available. The agency would 
provide up to 75 percent of the cost of the restoration. The landowner 
makes the restoration site available without payment for the use of the 
land and agrees to allow the restoration site to remain in a restored 
state for a period of at least 10 years. In some instances if we are 
dealing with a particularly expensive restoration or the restoration 
structure being placed in the wetland has a life expectancy of longer 
than 10 years the duration of the agreement may be, subject to mutual 
agreement of the parties, for a longer duration.
            unobligated balance in wrp appropriated account
    Mr. Skeen. What is the Current unobligated balance in the old WRP 
program?
    Response. As of September 30, 1996, the unobligated balance under 
the old WRP was approximately $31 million. In fiscal year 1997, we plan 
to use approximately $12.3 million of this unobligated balance for NRCS 
technical assistance in the WRP program.
                           mitigation banking
    Mr. Skeen. At last year's hearing, you told the Committee that 
NRCS, the Corps, EPA, the Fish and Wildlife Service, and NOAA were 
strategizing to develop implementation plans to utilize mitigation 
banking. What is the status of this initiative?
    Response. NRCS, the Army Corps of Engineers, the Environmental 
Protection Agency, the Fish and Wildlife Service and the National 
Marine Fisheries Service--NOAA--developed the ``Federal Guidance for 
the Establishment, Use and Operation of Mitigation Banks,'' which was 
published in the Federal Register on November 28, 1995 and became 
effective December 28, 1995. The agencies worked together to produce 
this document in order to clarify the manner in which mitigation banks 
may be used to satisfy requirements of the Clean Water Act, Section 404 
and the wetland conservation provisions of the Food Security Act. Last 
year, the aforementioned agencies sponsored workshops across the 
country to provide further instruction to agency field staff and to 
promote interagency support for the utilization of this guidance. 
Theagencies continue to work together and plan to distribute additional 
information to address some of the concerns that may be more technical 
or specific than that of the original guidance.
    NRCS is working to insure that all USDA program participants are 
aware and understand that utilization of mitigation banks, in some 
circumstances, may be an appropriate option to fulfill their mitigation 
requirements.
                       mitigation banking pilots
    Mr. Skeen. The 1996 farm bill gave the Secretary the authority to 
utilize appropriate measures to compensate for wetland losses and to 
use CRP funds for mitigation banking pilots. At this time last year, 
NRCS was developing the rules to implement this provision. What is the 
status of this issue?
    Response. The Highly Erodible Land and Wetland Conservation Interim 
Final Rule which was published on September 6, 1996, included a broad 
statement explaining that the Secretary had been given the authority to 
establish a mitigation banking pilot program. However no specific 
appropriations were identified for this program. The rule also stated 
that USDA had not made any decisions regarding the particulars of the 
program; thus, comments were solicited from the public regarding this 
subject. These comments have been reviewed and the agency is in the 
process determining the next appropriate steps for implementation.
               status of wetland delineations moratorium
    Mr. Skeen. In the spring of 1995, Secretary Glickman placed a 
moratorium on the all wetland delineations, unless requested by the 
landowner, pending the outcome of several pieces of legislation. What 
is the status of this moratorium?
    Response. The Secretary's moratorium for conducting widespread 
wetland determinations is still in place. Since the 1990 Farm Bill, we 
have essentially only responded to requests from farmers and ranchers 
who need wetland determinations when they plan to clear land or 
manipulate the hydrology of an area.
                      wetland delineation tracking
    Mr. Skeen. At last year's hearing you were unable to provide the 
Committee with a detailed annual breakout of costs associated with 
wetland delineations. You were in the process of implementing a module 
in the field office computer system that would track outputs of all 
wetland determinations including those that are certified by wetland 
type and year. What is the status of this module? Are you now able to 
provide this information.
    Response. The module to track wetland determinations is the Field 
Office Computer System. As wetland determinations are certified, they 
are recorded in the system. We are not inputing all previous wetland 
determinations since they may not be valid for Swampbuster and the 
Clean Water Act, Section 404.
    We are not able to provide you with a detailed annual breakdown of 
costs associated with making wetland determinations. An average per 
acre cost of a delineation would not be very meaningful or 
representative. There are fixed costs, i.e., collecting and evaluating 
soils, hydrology & vegetative data, evaluating previous or planned 
manipulations of hydrology, viewing and interpreting aerial photos, 
other remotely sensed data and making a field visit to the site 
regardless of size or complexity. There are also variable costs 
associated with the type, complexity, and size of wetlands on a given 
tract of land.
                         wetland determinations
    Mr. Skeen. The original plan to complete wetland determinations and 
certifications on all 4 million tracts of agricultural land was by 
fiscal year 1999. At last year's hearing you told the Committee this 
timeframe had been extended to 2001. What is the status of this 
initiative?
    Response. We have abandoned our plan to make wetland determinations 
on all land operated by USDA program participants. A wetland 
determination is not a condition of eligibility. Only land owners/
operators who plan to manipulate a wetland need to seek a determination 
to insure they do not violate the wetland conservation provisions of 
the Act. Under this policy the responsibility for compliance with the 
wetland provisions rests with the landowner.
    Mr. Skeen. How many landowners requested determinations in fiscal 
year 1996?
    Response. In fiscal year 1996 we conducted 67,980 wetland 
determinations at the request of clients. Many of these requests were 
generated by persons applying for Agricultural Market Transition Act 
contracts.
                      wetland delineation appeals
    Mr. Skeen. How many appeals are currently awaiting decision by the 
National Appeals Division?
    Response. We currently have 14 appeal decisions pending by the 
National Appeals Division.
    Mr. Skeen. Your goal was to have all wetland determinations loaded 
in the new automation module by December 31, 1996 to provide a 
comprehensive national database and an automated report for clients. 
Did this happen?
    Response. No, it did not happen. Based on higher priority 
conservation initiatives and new programs in the 1996 Farm Bill that 
I've previously mentioned, our field staff have been primarily focusing 
on the most pressing and urgent matters in lieu of loading ten-year 
wetland determinations into the computer database.
                   wrp staff years and related costs
    Mr. Skeen. How many staff years did you use and at what cost to 
carryout the WRP program in fiscal year 1996?
    Response. In fiscal year 1996, 178 staff years are associated with 
technical assistance activities for the WRP at a cost of $12,481,257.
    Mr. Skeen. What are the total salary costs needed to administer WRP 
in fiscal years 1997 and 1998? What are the total other than salary 
costs needed in both years?
    Response. The total salary costs needed to administer the WRP in 
fiscal year 1997 are approximately $12,327,442, and $18,200,000 in 1998 
for a combined total of $31,000,000.
    In addition, the total other than salary costs needed for both 
years are for 1997 approximately $118,712,000 are requested in CCC 
funds for enrollment of 130,000 acres to include $58.911 million for 
permanent easements, easement restoration costs, and easement overhead 
costs. $53.301 million are requested for 30-year temporary easements to 
include easement payments, easement restoration costs, and easement 
overhead costs. Also, $6.500 million are requested for restoration 
cost-share agreements. For fiscal year 1998, approximately $163.597 
million in CCC funds are requested for an enrollment of 212,000 acres 
to include $94.167 million for permanent easements, easement 
restoration costs, and easement overhead costs. $58.830 million are 
requested for 30-year temporary easements, easement restoration costs, 
and easement overhead costs. Also, $10.600 million are requested to 
fund restoration cost-share agreements.
               technical assistance reimbursement for wrp
    Mr. Skeen. Will you receive any reimbursement from CCC in fiscal 
years 1997 and 1998 for technical assistance of WRP?
    Response. No, CCC funds now available for reimbursement are not 
needed to support the WRP technical assistance needs in these years as 
long as the unobligated WRP funds are available for technical 
assistance. The current reimbursable cap for CCC is set at the 1995 
spending level of less than $50 million, and various agencies other 
than NRCS are competing for the very same limited funding source to 
support activities on behalf of CCC. Funding for salary and other 
salary related costs for WRP for 1997 and 1998 will be made through the 
use of unobligated 1996 WRP appropriated funds, which are not under CCC 
restrictions.
                    ccc financial assistance for wrp
    Mr. Skeen. In fiscal year 1997, $106 million in CCC financial 
assistance funds will be used to enroll approximately 130,000 acres. In 
fiscal year 1998, you propose to enroll an additional 212,000 acres. 
What is the CCC financial assistance funds needed for 212,000 acres?
    Response. For 1997 approximately $118,712,000 of CCC funds will be 
utilized for WRP financial assistance to enroll approximately 130,000 
acres at a cost of $106 million. In addition, the $118 million will 
also support contracts funded under the old WRP of $12,327,442, which 
was needed to pay unfunded WRP technical assistance needs for 1997. For 
1998, approximately $163,597,000 will be used for financial assistance 
costs, to enroll 212,000 acres at a cost of $145 million. The 1998 
request will also support $18,200,000 in old WRP contracts, which was 
also used to pay unfunded 1998 technical assistance needs that are not 
available under the current CCC section 11 cap. The funds used from the 
old WRP account to pay for 1997 and 1998 technical assistance needs, 
had to be replaced under CCC to fund old WRP contract payments coming 
due.
                         wrp mandatory program
    Mr. Skeen. Briefly describe the accounting of the new WRP program?
    Response. Under the new WRP, funded through CCC, reporting of 
accounting transactions are treated slightly different than under 
normal appropriated fund accounts. An individual appropriation is not 
requested under the new WRP as was in the past, but rather a dollar 
limit is imposed so as not to exceed the projected program cost. Under 
CCC for WRP, whatever is obligated will be outlayed similar to a ``pay-
as-you-go'' system. Bills will be submitted to CCC for liabilities 
incurred under the new WRP and will be paid. Unobligated CCC funds for 
WRP will not be apparent based on a ``pay-as-you-go system'' since the 
total amount of obligations will equal the total amount of outlays for 
the program, subject to the dollar limit imposed for spending of CCC 
funds made available for a WRP program sign-up.
                  partnership projects for restoration
    Mr. Skeen. During fiscal year 1996, states were encouraged to 
identify restoration projects where another partner would be willing to 
contribute to the effort. These projects could then be added to the 
backlog list and considered for funding with the remaining 1996 program 
funds. How many of these projects were identified and added to the 
backlog list?
    Response. There were 14 projects added to the backlog list under 
the 1996 partnership effort.
                         state conservationists
    Mr. Skeen. Are State Conservationists political appointees?
    Response. No, State Conservationists are career employees who have 
worked in NRCS and have advanced through the career process.
          conservation compliance and conservation operations
    Mr. Skeen. Please update the table that appears on page 577 of last 
year's hearing record, showing the amount appropriated for conservation 
operations and the amount spent on conservation compliance provisions, 
to include fiscal year 1997.
    [The information follows:]

    CONSERVATION COMPLIANCE AND CONSERVATION OPERATIONS EXPENDITURES    
                         [Dollars in thousands]                         
------------------------------------------------------------------------
                                              Conservation  Conservation
                 Fiscal year                    operation    compliance 
------------------------------------------------------------------------
1986........................................       348,669        57,532
1987........................................       399,671       165,993
1988........................................       444,391       183,219
1989........................................       465,435       193,347
1990........................................       477,377       198,347
1991........................................       509,509       213,131
1992........................................       564,251       238,960
1993........................................       576,740       245,093
1994........................................       603,408       261,835
1995........................................       612,242       279,158
1996........................................       629,794       251,918
1997........................................       619,961       247,984
------------------------------------------------------------------------

                           headquarters staff
    Mr. Skeen. You stated last year that you expected to meet your goal 
of reducing headquarters staff by 50 percent and state staff by 30 
percent by October 1997. Are you still on schedule to reach this goal?
    Response. Yes, we are on target to meet our goals of reducing 
headquarters' and States' staff.
                        major functional changes
    Mr. Skeen. In your testimony you state that on January 30, 1997, 
further adjustments of the headquarters' structure were approved by the 
Department. Briefly describe these changes and the impact they will 
have on staff and program management. Also submit a structure diagram 
of the new NRCS for Headquarters and the field.
    Response. The goal of the NHQ reorganization was to realign and 
restructure the current NHQ organization based on our reorganization 
appraisals and the Blue Ribbon Report on National Resources Inventory 
and Performance Management. The goal was not to reduce staffing levels, 
but to ensure an optimum organization structure for the Agency. Every 
employee has a position at the same grade level and in the same local 
commuting area under the new structure. There are no changes to the 
Agency's budget as a result of the reorganization. Following is a 
listing of the major functional changes.
                  highlighted major functional changes
    1. Establish a new Deputy Chief for Soil Survey and Resource 
Assessment. This new deputy is responsible for all programs and 
activities related to the collection of natural resource and soils 
data, the assessment of natural resource status, natural resources 
conditions and trends, policy analysis, and strategic planning.
    2. Deputy Chief for Programs to better reflect the focus of the 
Deputy Area. It established a Department of Agriculture Program 
Outreach Division as a result of the transfer of the Secretary's 
Section 2501 program from the Farm Service Agency to NRCS. Also 
transferred to this division are the 1890 and Hispanic Association of 
Colleges and Universities programs from the Deputy Chief for 
Management. A Civil Rights Program Compliance Division to align Title 6 
responsibilities with program operations was also established.
    3. Name change from Deputy Chief for Soil Science and Resources 
Assessment to Deputy Chief for Science and Technology to more 
adequately align the Deputy Chief with the science and technology 
consortium of divisions, institutes, and centers which the Deputy Chief 
supervises.
    4. Name change from Deputy Chief for Management and Strategic 
Planning to Deputy Chief for Management due to the transfer of 
strategic planning functions to the new Deputy Area. As the result of 
the separation of Titles 6 and 7 responsibilities, it established the 
Civil Rights Employment Division to provide leadership for Title 7. The 
old Information Resources Management Division is now called the 
Information Technology Division to reflect a refocus on technology, and 
the addition of the Chief Information Officer centralized leadership 
and decision-making relative to information technology agency-wide.

[Page 527--The official Committee record contains additional material here.]


    Mr. Skeen. Please update the table that appears on page 585 of last 
year's hearing record, showing the personnel and funding level for each 
of the four regional technical centers and the six new regional offices 
that were established through reorganization to include fiscal year 
1997. Also include in this table the amount spent by headquarters to 
support the institutes.
    [The information follows:]

[Page 529--The official Committee record contains additional material here.]


                     state and local contributions
    Mr. Skeen. Update the table that appears on pages 634 and 635 of 
last year's hearing record, showing the state and local appropriations 
for conservation district program activities, to include fiscal year 
1996 actuals and fiscal year 1997 estimates.
    [The information follows:]

                     CONSERVATION PROGRAM ACTIVITIES                    
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                      State        Local                
           Fiscal year              government   government    NRCS \1\ 
------------------------------------------------------------------------
1986.............................      158,498      119,349      674,327
1987.............................      175,550      132,398      642,995
1988.............................      286,184      151,528      686,560
1989.............................      253,424      140,176      704,103
1990.............................      269,105      238,325      802,499
1991.............................      282,357      231,052      771,967
1992.............................      290,730      203,133      900,196
1993.............................      368,201      165,031      935,917
1994.............................      299,275      202,773    1,260,491
1995.............................      309,297      209,390      832,209
1996.............................      514,851      220,951      940,314
1997 estimate....................      453,813      242,446      833,228
------------------------------------------------------------------------
\1\ Includes Emergency Watershed Program appropriations.                

    Mr. Skeen. Update the table that appears on page 638 of last year's 
hearing record to show the total amount of technical assistance that 
will be provided to all conservation programs under your jurisdiction 
as well as a breakout of the amount transferred from CCC and the amount 
to come from your conservation operations appropriation.
    [The information follows:]

           TECHNICAL ASSISTANCE FOR ALL CONSERVATION PROGRAMS           
                         [Dollars in thousands]                         
------------------------------------------------------------------------
                                                      Fiscal years      
                    Program                    -------------------------
                                                    1997         1998   
------------------------------------------------------------------------
NRCS Technical Assistance:                                              
    Conservation Technical Assistance.........     $528,892     $549,241
    Soil Surveys..............................       76,409       82,248
    Snow Surveys and Water Supply Forecasting.        5,835        5,888
    Operation of Plant Materials Centers......        8,825        8,891
    Water Resources Assistance................       86,849       76,000
    Resource Conservation & Development.......       29,317       47,640
    Wetlands Reserve Program \1\..............       12,327       18,200
    Colorado River Salinity Control Program...            0            0
    Water Bank Program........................            0            0
    Great Plains Conservation Program.........            0            0
    Rural Abandoned Mine Program..............            0            0
                                               -------------------------
      Total, Appropriated.....................      748,454      788,108
                                               =========================
Commodity Credit Corporation (CCC):                                     
    Conservation Reserve Program \2\..........       78,175       35,375
    Environmental Quality Incentives Program..       20,000       20,000
    Wildlife Habitat Incentives Program \2\...        5,000        7,500
    Conservation Farm Option..................          500        3,750
    Farmland Protection Program...............           80          720
                                               -------------------------
      Total, CCC..............................      103,755       67,345
                                               =========================
      Total, NRCS & CCC Combined..............      852,209      855,453
------------------------------------------------------------------------
\1\ Technical assistance for this program is being provided out of NRCS 
  carryover finds in FY 1997 and FY 1998.                               
\2\ Technical assistance for these programs is being provided out of FSA
  carryover funds in 1997 and 1998.                                     

                        conservation compliance
    Mr. Skeen. The 1996 Farm Bill amended conservation compliance 
requirements and made changes in the administration of compliance 
activities. What is the impact of both on the future of compliance 
achievements and environmental goals?
    Response. We feel that the impact of both on the future of 
compliance achievements and environmental goals is positive. The 1996 
Farm Bill and the related Highly Erodible Land Interim Rule and 
National Food Security Act Manual Policy changes are designed to make 
the compliance provisions more farmer friendly, while improving and 
strengthening conservation system requirements.
                           methane emissions
    Mr. Skeen. Your agency has been involved over the years in a number 
of projects regarding the reduction of methane emissions. The 
President's Climate Change Action Plan identifies 44 specific action 
items to be addressed by the Federal Government and industry. NRCS is 
involved in three of these items and allocated $2.7 million in fiscal 
year 1996 to support them. Specifically how long have these projects 
been ongoing, how much has been provided to date, and what are your 
plans for future continuation of each item?
    Response. NRCS continued to actively participate in three of the 
Action Items during fiscal year 1996.
    Action Item #17 ``Improve Efficiency of Fertilizer Nitrogen Use''. 
Since 1995, the Natural Resources Conservation Service (NRCS) has 
funded a variety of nitrogen fertilizer use efficiency projects. During 
that three year period, $2,514,000 have been allocated from the NRCS 
budget for nitrogen fertilizer use efficiency projects. For the current 
fiscal year, $781,000 dollars are allocated for nitrogen fertilizer 
activity.
    The NRCS projects have focused on three major areas including 
demonstration projects, technology development and transfer, and 
information. Nitrogen fertilizers contribute to global climate change 
in two major ways. These include emissions from facilities that produce 
commercial nitrogen fertilizer and volatilization losses into the 
atmosphere after nitrogen has been applied as a fertilizer.
    The thrust of the NRCS nitrogen fertilizer projects has focused on 
the substitution of nitrogen produced by fixation from legumes grown in 
the cropping sequence for some of the commercial nitrogen fertilizer 
that would otherwise be used, and on technology to evaluate nitrogen 
fertilizer management systems that minimize volatilization losses to 
the atmosphere.
    Demonstration projects that incorporate legume cover crops into the 
cropping system have been conducted in 6 states on corn, vegetables, 
and cotton. Manure composing and utilization projects have been done in 
4 other states. These four projects have focused on using animal 
manures as a nitrogen source for pine production, chemical treatment to 
reduce nitrogen volatilization losses, and reducing quantities of 
commercial nitrogen fertilizer used.
    In fiscal year 1996, NRCS funded an enhancement to the Nitrogen 
Leaching and Economic Analysis Package (NLEAP) model developed by the 
Agricultural Research Service (ARS). The enhancement allows the model 
to evaluate both leaching and volatilization losses of nitrogen to 
ground water and to the atmosphere.
    The focus of NRCS activities in fiscal year 1997 is on evaluation 
of nitrogen management for corn, cotton, and potato production. NLEAP 
will be used to evaluate current and alternative nitrogen management 
strategies in 13 states. This work will identify nitrogen management 
systems that minimize nitrogen leaching and volatilization losses. 
Management systems that minimize these losses will help achieve both 
water quality and global climate goals.
    NRCS plans to continue work on projects that improve nitrogen 
fertilizer use efficiency in American agriculture. The NLEAP work that 
is the focus of the agency's activities in fiscal year 1997 will be 
continued and expanded in fiscal year 1998. Contingent upon the 
availability of resources, analysis of nitrogen management on corn, 
cotton, and potatoes will continue and be expanded to include other 
states and other high nitrogen using crops.
    Action Item #38--``Expand AgSTAR Partnership with Livestock 
Producers''--This project is a cooperative effort between the United 
States Environmental Protection Agency (EPA), the United States 
Department of Energy (DOE) and the United States Department of 
Agriculture (USDA), Natural Resources Conservation Service (NRCS). 
AgSTAR is a voluntary Federal program that encourages the use of 
effective technologies to capture methane gas, generated from the 
decomposition of animal waste, for use as an energy resources (biogas).
    NRCS has been involved with the AgSTAR program for the last three 
fiscal years. During that period, NRCS has allocated $1,000,000 each 
fiscal year to 13 different states for support of AgSTAR activities. 
Fiscal year 1997 allocations of $250,000 each were made to the States 
of California, North Carolina, Iowa and Texas. Efforts are underway 
around the country to sign up AgSTAR Partners.
    A livestock producer becomes a Partner by signing a ``Memorandum of 
Understanding'' (MOU) with the U.S. EPA. The Partner agrees to survey 
the facility, install methane recovery systems where profitable, and 
complete installation within 3 years. Currently there are approximately 
37 partners representing 165 farms with approximately 140 of those 
being hog farms. Odor control benefits of biogas capture and EPA 
recognition are being recognized by livestock producers as additional 
benefits of the technology resulting in increased interest in the 
program. Additional signups are ongoing.
    During fiscal year 1996/97, a demonstration project was completed 
at the Barham Farm in North Carolina. The Barham Farm is a 4,000 sow, 
farrow to wean operation using covered anaerobic lagoon technology. 
Biogas is used directly for heating the buildings and also for 
generation of electricity. While the electrical generator is not yet in 
full operation, use of biogas in place of propane has already resulted 
in substantial savings in propane costs for the operation. A field 
demonstration of the site was held in conjunction with a conference 
promoting the AgSTAR program in February 1997. Participants 
representing producers and other interested organizations from 
throughout the U.S. were in attendance. Additional AgSTAR demonstration 
farms are located in Oregon (Craven Farms) and New York (Aaman Farms).
    During fiscal year 1996/97, an engineering position, cooperatively 
funded by the EPA and NRCS was established and filled in Raleigh, North 
Carolina. The engineer occupying this position serves as a regional 
specialist in environmental engineering and biogas recovery, providing 
technical leadership in biogas recovery to State conservationists, the 
Director of the Caribbean Area, and national headquarters staff. Duties 
include on-farm assistance to solve problems, feasibility assessments 
of existing technology, planning, design and construction support of 
specialized animal waste systems, and operation and maintenance 
supervision of the system.
    In order to support technical implementation of the program, three 
technical standards have been developed to be included in the NRCS 
Field Office Technical Guide (FOTG). Those standards are: Covered 
Anaerobic Lagoon, Plug Flow Digester and Complete Mix Digester. The 
final version of the Covered Anaerobic Lagoon has been issued and is 
available under technical reference material on the NRCS Homepage. The 
final drafts of the Plug Flow Digester and Complete Mix Digester have 
been completed with an anticipated issue date of May 1997.
    Finally, a public review draft of an AgSTAR Handbook has been 
completed and distributed for review and comment. The handbook includes 
the latest upgrade of the FarmWare software (Version 2.0) which can be 
used to evaluate the feasibility of installation of biogas generation 
and recovery technologies on any given farm operation.
    NRCS plans to continue to support this program as part of the 
actions taken to address the issues outlined by ``The Climate Change 
Action Plan'', issued by President Clinton.
    NRCS has also been an active partner in Action Item #39. Action 
Item #39 Improve Ruminant Productivity and Product Marketing has been a 
cooperative effort of NRCS and EPA for three years. NRCS has provided 
$2,950,000 to develop and assist producers in implementing voluntary 
conservation practices that can improve ruminant livestock productivity 
on the farm. NRCS will continue to provide voluntary conservation 
technical assistance to livestock producers that improve ruminant 
productivity.
        model farms demonstrating reduction of methane emissions
    Mr. Skeen. What is the status of your plans to establish ten model 
farms in each of the southeastern states and Puerto Rico in cooperation 
with three universities to demonstrate practices that will result in 
the lowest rate of methane generation per unit of production? Include 
where these model farms will be located, what universities will conduct 
the research, and the total cost to carry out this initiative.
    Response. A cooperative agreement between NRCS and EPA established 
the criteria for development of at least one model farm in each of ten 
southeastern states and Puerto Rico. Forty-three grazing land 
management livestock efficiency projects have been undertaken in the 
southeast. Seventeen have been established and are being implemented 
(Alabama-1, Caribbean Area-1, Georgia-3, Kentucky-1, Louisiana-2, 
Mississippi-4, Tennessee-1, Virginia-3). Planning has been completed 
for twenty-six (Alabama-1, Kentucky-2, South Carolina-20, North 
Carolina-3). NRCS has provided $1,168,000 to implement and support this 
project.
    EPA provided $1 million to NRCS, to administer the development of 
field trials at three universities in the southeast, as part of the 
interagency cooperative agreement. NRCS has assisted the University of 
Tennessee, the University of Georgia, and the University of 
Southwestern Louisiana in the design and implementation of field trails 
to determine how conservation management can improve ruminate livestock 
production efficiency. These field trails are being conducted at each 
of the universities' farm centers.
                              soil surveys
    Mr. Skeen. How many soil surveys were completed and published in 
fiscal year 1996, and how many do you expect to publish in fiscal year 
1997?
    Response. In fiscal year 1996, forty seven soil surveys were 
completed, and 33 of those were published. In fiscal year 1997, fifty 
four soil surveys have already been made ready for publication and we 
expect another 20 by the end of the fiscal year. We currently expect 
that all of these will be sent for publication in fiscal year 1997.
              soil survey printing and distribution costs
    Mr. Skeen. Copies of soil surveys are printed for both public and 
congressional use. A provision in the 1996 Farm Bill allows for more 
discretion in the number of surveys that are provided to Congress and 
the public. What impact has this provision had on printing and 
distribution costs?
    Response. The provision in the 1996 Farm Bill eliminated the 
requirement of printing Congressional copies of soil surveys. However, 
knowing that most of those Congressional copies were distributed to the 
residents within the area surveyed we had always included those when we 
calculated the total number of published copies needed for a particular 
area.
    The impact the provision has had is that it has given us more 
freedom in publication formats, and in selecting who will publish the 
surveys for us. We are now providing soil survey information in two 
hard copy formats, the traditional boundcopy and a newer format 
suitable for 3-ring binders. We are also providing soil survey 
information on tape, on CD-ROM, and on the internet. We are trying to 
better meet the customer needs by providing information in the format 
that will be best for the particular customer. We anticipate the 3-ring 
binder format will become our standard hard copy format, and that will 
save us about 35% of our current publication cost. In addition, we will 
be printing only a 2 year supply of publications for each survey area 
rather than the entire anticipated need for an area. When the two year 
supply is exhausted we will print more copies since all surveys will be 
imprinted on CD's. This print on demand capability will save the cost 
of storage of a twenty to twenty five year supply of surveys and the 
associated wastage. The 3-ring binder format also makes updating soil 
surveys more cost effective as only the pages needing updating need to 
be republished.
    All of these improvements taken together provide us with an 
anticipated savings in publication costs of about 50% which will enable 
us to begin to make significant inroads in reducing our current 
publication backlog of about 200 soil survey reports.
                geographic information system activities
    Mr. Skeen. Update the table that appears on page 642 of last year's 
hearing record showing the amount spent on GIS activities to include 
fiscal year 1998. Also, breakout the U.S. Geological Survey from the 
other category.
    [The information follows:]

[Page 534--The official Committee record contains additional material here.]


                national soil information system status

    Mr. Skeen. What is the status of the National Soil Information 
System?
    Response. The current version of the National Soil Information 
System--known as NASIS 3.0--is installed at 20 state offices around the 
country with 17 more offices scheduled to install the software in 
April. In these offices, all of our existing soil survey data have been 
converted to NASIS. In the remaining offices, our existing soil survey 
data are being converted to a previous version of the National Soil 
Information System before NASIS 3.0 can be installed. Already, NASIS is 
being used to manage soil survey data in some of our soil survey field 
offices throughout the country. In the West, in particular, our 
partners in soil survey--the Forest Service, Bureau of Land Management, 
and Bureau of Indian Affairs--are using NASIS in some of their offices 
to manage soil survey data and create their own interpretations and 
reports from the data.
    We are continuing to develop the National Soil Information System 
in cooperation with the Federal Geographic Data Committee, our National 
Cooperative Soil Survey partners, and the Information Technology Center 
in Fort Collins, Colorado. The next release of NASIS software will be 
in June of this year. This release will provide, for the first time, a 
nationally consistent and accessible client/server database 
architecture. This will provide all NASIS users immediate access to the 
nationally complete set of soil data, including all of the new 
interpretive capabilities. It will also provide soils data in a format 
suitable for use with the Field Office Computing System and the Soil 
Survey Geographic Database.
           other federal, state and local soil survey funding
    Mr. Skeen. Provide a table that shows the amount of funding 
contributed by other Federal, state, and local entities for soil 
surveys for fiscal years 1995, 1996, and 1997.
    [The information follows:]

                   SOIL SURVEY PROGRAM REIMBURSEMENTS                   
            [By Source for fiscal year 1995, 1996, and 1997]            
------------------------------------------------------------------------
                                                                Fiscal  
                                      Fiscal       Fiscal       year--  
                                   year-- 1995  year-- 1996    1997\1\  
------------------------------------------------------------------------
USDA.............................    1,284,556      851.365      800,000
Other Federal....................    2,094,611    1,716,438    2,000,000
State & Local....................    2,859,655    2,820,210    2,800,000
Private..........................      133,821      194,391      150,000
                                  --------------------------------------
      Total......................    6,372,643    5,582,404    5,750,000
------------------------------------------------------------------------
\1\ Fiscal year 1997 is an estimate since we are in the midst of the    
  year. Other funding to support the development of GIS capabilities in 
  USDA Field Service Center offices, such as funding for procurement of 
  digital orthophotography, does benefit the soil survey program. It is 
  not, however, received by the agency as soil survey reimbursable      
  funding.                                                              

                              soil surveys
    Mr. Skeen. How many soil surveys that were done on a county basis 
need to be remapped using natural landscape boundaries?
    Response. Soil Survey information, like any other kind of 
information, must meet the current needs of customers if it is to 
remain useful. Soil Survey information is now available for about 94% 
of the nation's privately owned land and for about 76% of the entire 
country. The soil surveys we call modern soil surveys have been 
conducted over the last 50 years, and with the changing needs of modern 
customers that has left us with a patch work quilt of soil surveys 
across the nation. Some meeting current needs, some not. We estimate 
that about 20% of the soil surveys are out of date and need some form 
of updating to meet current customer expectations. This would be about 
400 soil survey areas.
    We have, within the last year, reorganized the soil survey mapping 
activities from a county by county process to one that is organized 
around areas of similar geology, climate, and soils, a natural 
landscape basis, if you will. The reason we did this was to provide a 
more efficient way of bringing older soil surveys up to current 
standards, correct mismatches between soil survey areas, and at the 
same time develop simplified legends more usable with GIS technology.
    Our objective is to bring these older surveys up to standard over a 
period of years, and maintain them, not letting them get out of date. 
This replaces our past thinking that soil surveys are only good for 20 
to 25 years, then they have to be ``remapped''.
                      soil and pesticide database
    Mr. Skeen. Describe in further detail the soil and pesticide 
database including how it works, what type of data is collected, and 
how it is collected, who uses this database and for what purpose?
    Response. The soil and pesticide database is in reality two 
databases. The data contained in these databases is integrated in 
several water quality assessment tools such as the NRCS Soil Pesticide 
Interaction Screening Procedure (SPISP) tool. The NRCS's SPISP planning 
tool provides the resource planner with an assessment of the 
interaction between the pesticide and the soil upon which it was 
applied. Farmers, ranchers, and other resource managers use SPISP to 
assess a pesticide relative impact on the ground and surface water 
resources and to select the pesticides with the least potential hazard.
    Another assessment tool used by NRCS field personnel to determine a 
pesticide's impact on the water resource is the National Pesticide Risk 
Assessment (NAPRA). The NAPRA tool is an automated tool that uses the 
data contained in the soil and pesticide databases to determine a water 
quality risk factor when a specific pesticide is applied to a specified 
soil.
    Soil data used for water quality assessment tools are collected 
during the soil survey process. The key soil properties for these 
evaluations are a soil's surface layer thickness, surface layer organic 
matter content, erosion factor (K factor), and hydrologic group. A 
soil's pesticide interaction rating is then obtained through a series 
of several mathematical calculations.
    The pesticide properties database is a collection of physical and 
chemical property data which affect the environmental fate of 
pesticides. Some properties measured include solubility in water and 
field half life in soil. Data are available for most of the currently 
registered agricultural pesticides. Single values for each property are 
selected from wide ranges found in published studies and manufacturer 
research. Because these values can vary widely, care is taken to choose 
properties for each pesticide relative to other similar pesticides. 
This database is essential for the NRCS Field Office Computing System 
Pesticide Screening Tool, NAPRA, Hydrologic Unit--Water Quality and 
other water quality models such as GLEAMS, EPIC, AGNPS and SWRRBWQ and 
PRZM.
                 plant material centers operating costs
    Mr. Skeen. Please update the table that appears on page 845 of last 
year's hearing record showing the plant materials centers annual 
operating costs to reflect fiscal year 1995 actuals and fiscal year 
1997 estimates.
    [The information follows:]

[Page 537--The official Committee record contains additional material here.]


                 new plant releases in fiscal year 1996

    Mr. Skeen. Did you release any new plants in fiscal year 1996? If 
so, please provide a brief description of each.
    Response. There were 43 plant releases in 1996. Five were cultivar 
releases, 28 were germplasm, tested and selected, one of which NRCS was 
not the primary agency, releases, and 10 were source identified 
releases of selected ecotypes. Brief descriptive information follows.

[Pages 539 - 544--The official Committee record contains additional material here.]


                  west virginia plant materials center

    Mr. Skeen. What is the status of the plant materials center being 
established in Alderson, West Virginia?
    Response. Land acquisition has been successfully completed and 
efforts are now primarily directed toward establishing physical 
facilities from which to operate. The conceptual design package dealing 
with buildings to be constructed at the Plant Materials Center is 
nearing completion. It is scheduled to be reviewed by the end of March 
so that bids can be received. By late April, it is anticipated that the 
contract can be awarded for the construction of buildings. Land 
preparation activities will get underway later this spring to move 
plants from Quicksand, KY to the Alderson plant center. Tillage work on 
10-20 acres is scheduled to control weed problems prior to planting. 
Current budget constraints, however, will require that the effort be 
accomplished in stages over a 3-4 year period before the center is 
fully functional.

                 royalty collections for plant release

    Mr. Skeen. What is the status of the mechanism for collecting 
royalties for new plant releases that has been established and how much 
has been collected to date?
    Response. The mechanism for collecting royalties is in place and is 
being implemented where it is applicable. However, the process of 
implementation is an extended one with all the detailed requirements of 
the Plant Variety Protection Act. Experience has shown that a 2-3 year 
time interval is not unusual. In addition, it should be noted that 
current focus on releases in the Plant Materials Program is directed 
toward tested and source identified releases instead of cultivars. In 
1996, for example, only 7 of 35 releases were cultivars. Since only 
cultivars are eligible for PVP consideration, associated royalties will 
be small in comparison to the overall impact of releases being 
produced. the emphasis on non-cultivar releases has been undertaken to 
meet immediate needs for plant materials on a more timely bases.
    Royalties are now being collected for `Rush' intermediate 
wheatgrass. The cultivar is one that was developed and released by 
Idaho. The amount received for the cultivar is 8 cents/pound or about 
3% of the selling price. In 1996, this resulted in about $7,000 in 
royalties. No additional royalties have been collected for other 
species. To summarize the situation, plant centers have initiated 
action to have royalties collected for a few species, but none have yet 
finished the process.
        plant materials projects with the department of defense
    Mr. Skeen. What types of projects are you developing with the 
Department of Defense in the plant materials area.
    Response. There have been several cooperative efforts between the 
Plant Materials Program and DOD involving restoration of disturbed land 
on military bases. Specific plant materials work with the Army has 
included centers in Georgia, Idaho, Louisiana, New Mexico, Arizona, and 
Mississippi. The primary focus of this work has been for plant 
materials personnel to provide technical knowledge, planning expertise, 
and planting techniques needed. Several habitats and study approaches 
have been involved, including: control of runoff water, soil 
stabilization, environmental plantings, and reclamation of sites 
ranging from deserts to wetlands. Most deal directly with restoration 
efforts.
    It is clear that the plant Materials Program can play a vital role 
in meeting restoration needs for the Department of Defense. Current and 
prior interactions have established an effective relationship. An NRCS 
liaison staff person, funded by the Armyhas been located at Aberdeen, 
MD to facilitate cooperative efforts. Military bases have a training 
mission to fulfill which results in land disturbance, and NRCS Plant 
Materials Program has a mission to develop and transfer technology to 
address this situation. This lends itself to a productive interaction.
                   plant materials and buffer strips
    Mr. Skeen. What is the status of the plant center evaluations of 
using grass and other plant species as vegetative buffer strips and the 
use of alternative species for creating fresh water wetlands?
    Response. Plant centers recognize the importance and potential of 
using buffer strips to solve conservation problems and for creating 
fresh water wetlands. As a result many are actively involved in such 
efforts. Specific details follow.

[Page 546--The official Committee record contains additional material here.]


               watershed and river basin planning studies

    Mr. Skeen. Please list all watershed planning studies, cooperative 
river basin studies and flood plain management studies that are 
currently in progress including when they started, the cost of each, 
and when you expect them to be completed.

[Pages 548 - 554--The official Committee record contains additional material here.]


             cooperative river basin and management studies

    Mr. Skeen. A total of 36 Cooperatives River Basin Surveys and 15 
flood plain management studies were started in fiscal year 1996. How 
many are planned for fiscal year 1997?
    Response. We project that 24 cooperative river basin studies and 10 
floodplain management studies will be initiated in fiscal year 1997.
       central and southern florida flood control project restudy
    Mr. Skeen. Describe in further detail the Central and Southern 
Florida Flood Control Project Restudy which is expected to be completed 
within four years.
    Response. This study is being carried out by the US Army Corps of 
Engineers, Jacksonville District, not NCRS.
                 flood plain management study follow-up
    Mr. Skeen. Once a flood plain management study is completed, do you 
conduct any follow-up studies to see if the recommendations made were 
acted upon and if they were, to see how they are working and what 
impact they had?
    Response. We have no formal policy to follow up of flood plain 
management studies. Our local district conservationist encourages the 
governmental entity to utilize the information. Since the sponsors 
contribute 25 percent of the cost, they undoubtedly make use of the 
study.
                    purchase of flood plain easement
    Mr. Skeen. The 1996 farm bill amended the Agricultural Credit Act 
of 1978 to allow for the purchase of flood plain easements. Has this 
authority been used yet this year?
    Response. We have developed the concepts we think will be 
appropriate for the purchase of floodplain easements. A pilot test on 
the flood of 1997 will be run once the supplemental appropriation is 
received. It is estimated that there could be enough willing sellers 
for as much as $15 million. In California alone, there are owners of 
3,000 acres who have already indicated a willingness to sell.
                       program evaluation studies
    Mr. Skeen. How many program evaluation studies were carried out in 
fiscal year 1996?
    Response. One program evaluation study was carried out in fiscal 
year 1996, the Wetland Reserve Program Evaluation.
    Mr. Skeen. How many are planned for fiscal year 1997?
    Response. There are six evaluations planned for fiscal year 1997. 
They are the Soil Survey Program Evaluation, the American Indian/Alaska 
Native Program Delivery Evaluation, the Conservation Planning Program 
Evaluation, the Emergency Watershed Protection Program Evaluation, the 
Conservation Reserve Program Evaluation, and the Environmental Quality 
Incentives Program Evaluation.


[Pages 556 - 585--The official Committee record contains additional material here.]



                    new and planned pl-566 projects

    Mr. Skeen. Please provide a list of all new small watershed 
construction projects started in fiscal year 1996 and those planned to 
start in fiscal year 1997. Include the Federal and non-Federal cost of 
each project.
    [The information follows:]

                            P.L. 566 PROJECTS                           
------------------------------------------------------------------------
                    Name                       Fed cost     Nonfed cost 
------------------------------------------------------------------------
In 1996:                                                                
    Lake Carlinville, IL...................      296,000         258,000
    Lake Taylorville, IL...................      984,800       1,251,200
    Hickory Creek, MO......................    4,891,600       1,155,900
    Marthasville Town Branch, MO...........      874,500         242,900
    Nahunta Swamp, NC......................    1,064,480         955,200
    Asaayi Lake, NM........................    1,732,500         446,500
    Buck Hollow, OR........................    2,462,700       2,117,300
    Monastery Run, PA......................      575,000         568,000
    Fall River--North Unit, SD.............      534,900       1,432,200
    Fall River--South Unit, SD.............    1,632,000       4,209,000
    Lick Creek (1995), TN..................    2,118,261         834,399
    Omak Creek, WA.........................    2,102,000         930,000
    North Platte River, WY.................    3,077,700       1,168,300
In 1997:                                                                
    Hohokam, AZ............................    5,770,000       2,781,000
    White Tank Mountains, AZ...............    1,351,000          10,000
    Red-White Clay Creek, PA...............    5,548,000       2,332,000
    AUA, PB................................      263,300         145,400
    Muddy-Creek Orderville, UT.............      263,500          97,490
    Chestnut Creek, VA.....................    5,039,766       1,161,857
------------------------------------------------------------------------

                    acres covered by pl-566 projects
    Mr. Skeen. I read where 35 million acres are covered by PL-534 
projects. How many acres are covered by the 531 PL-566 projects?
    Response. The 531 active PL-566 projects cover 48 million acres.
     watershed and flood prevention operations unobligated balance
    Mr. Skeen. Please explain the $52,543,313 unobligated balance 
available at the end of fiscal year 1996 in the watershed and flood 
prevention operations program.
    Response. The $52,543,313 unobligated balance carried forward is 
the result of an emergency supplemental appropriation release in June, 
1996. $80.5 million was made available to NRCS for the Emergency 
Watershed Protection Program on May 22, 1996. Supplemental 
appropriations late in the fiscal year result in large unobligated 
balances carried forward to the new fiscal year. Unobligated balances 
carried forward in the annually appropriated Watershed and Flood 
Prevention Operations PL-566 and PL-534 are generally less than $4 
million and are due to late year failure to obligate because of land 
rights or permitting difficulties experienced by project sponsors.
               other federal and non-federal obligations
    Mr. Skeen. Provide a detailed breakout of the other Federal and 
non-Federal sources of obligations for fiscal years 1996, 1997, and 
1998.
    [The information follows:]

[Page 587--The official Committee record contains additional material here.]


                 increase in non-federal reimbursements

    Mr. Skeen. Why do obligations from non-Federal sources increase 
from $11,986,893 in fiscal year 1996 to $19,167,000 in fiscal year 
1997?
    Response. Obligations from non-Federal sources are expected to 
increase in fiscal year 1997 based primarily on the anticipated 
Emergency Watershed Protection program activities.
                      wetlands created or restored
    Mr. Skeen. Of the 46,925 acres of wetlands created or restored, why 
was 62 percent or 28,930 acres located in Nebraska?
    Response. This information was based on a new data base that we are 
in the process of building. A note with the table stated that all 
states had not reported yet. It also takes a few iterations of data 
submissions to get it right. The Nebraska numbers are correct, and we 
will work with other states to get consistent data for next year.
                          total wetlands acres
    Mr. Skeen. Why are 507,295 of the 525,449 total acres of wetlands 
enhanced located in South Carolina?
    Response. Again, this information was based on partial data 
available in the new data base at the time the budget was prepared.
                          upland habitat acres
    Mr. Skeen. Is this the same reason why 74 percent of the upland 
habitat dedicated acres and 65 percent of the upland habitat enhanced 
acres are located in California?
    Response. Yes. The percentages will change when the data base is 
completed to include all states that had not reported when the budget 
was prepared and sent to you. We anticipate it taking a few iterations 
of data submissions to get all the bugs worked out of the system.
            wetlands and upland habitat created or enhanced
    Mr. Skeen. In total, of the four program outcomes of wetlands and 
upland habitat created or enhanced by acre, four states (Alabama, 
California, Nebraska, and South Carolina) make up 89 percent of the 
total acreage. Why?
    Response. Those states were the ones that had completed their data 
input for the new data base at the time the numbers were made available 
for the budget. We will be glad to provide you with more up to date 
information as soon as we have verified it.
      geographic breakdown of obligations for watershed operations
    Mr. Skeen. On the geographic breakdown of obligations and staff 
years for watershed and flood prevention operations, why are there no 
staff years shown?
    Response. This change occurs because of a technical change proposed 
in the 1998 budget. Technical assistance and staff years for watershed 
and flood prevention are shown under conservation operations under the 
new water resources assistance line item activity for fiscal year 1998. 
The dollars under watershed and flood prevention are financial 
assistance only.
    Mr. Skeen. Why do three states show a negative value in the fiscal 
year 1996 column?
    Response. Three states Hawaii, North Dakota, and Rhode Island--show 
negative values in the fiscal year 1996 column due to an accounting 
transaction for credit disbursements or deobligations from prior year 
contracts which exceeded new dollars spent in 1996.
    Mr. Skeen. Why will some states that received funding in fiscal 
year 1996 receive no funding in fiscal year 1997?
    Response. Some states had not requested financial assistance 
program funding at the beginning of the year. All states that have 
requested funding, except Rhode Island and North Dakota, have currently 
received funding in the following amounts: Arizona $1 million; Delaware 
$300,000; Michigan $400,000; Minnesota $300,000; New Mexico $300,000; 
Pacific Basin $85,000; and South Carolina $200,000.
            one-plan concept or whole farm or ranch approach
    Mr. Skeen. What is the status of the agreement with the National 
Association of State Departments of Agriculture Research Foundation to 
explore the one-plan concept or whole farm or ranch approach for 
conservation activities?
    Response. Under phase 1 of the agreement, the National Association 
of State Departments of Agriculture--Research Foundation--NASDA-RF--
completed a series of meetings with farmers, ranchers, and agricultural 
consultants/advisors in eighteen focus groups in eight states. There 
were 1,100 recorded comments. The major points of farmers and ranchers 
input were incorporated and transmitted to the Chief, NRCS, as part of 
the NRCS's Material Development Team Report on ``Resource Management 
Planning'' on September 11, 1996. Currently under the agreement, the 
National Association of State Departments of Agriculture--Research 
Foundation--NASDA-RF is working cooperatively with NRCS, Environmental 
Protection Agency--EPA, and the Arkansas National Center for 
Agricultural Law Research and Information to prepare a reference guide 
for each State documenting the environmental laws affecting agriculture 
for that particular state. These guides are being developed as a 
resource tool to assist farmers and ranchers in becoming more aware of 
specific laws and regulations that affect agriculture in their state. 
These guides will also include a list of reference contacts for 
additional assistance.
                     status of backlogged projects
    Mr. Skeen. The agency has been reviewing all authorized projects to 
update and either modify or delete backlogged projects. What is the 
status of this initiative?
    Response. NRCS is currently providing assistance with 
implementation on more than 500 active watershed projects. The federal 
unfunded commitment--federal dollars, as identified in watershed plans, 
that remain to be paid to install watershed measures--began in 1958 and 
by the 1970s, grew to nearly $2.0 billion. At the end of 1996 that 
commitment was $881 million, having been reduced by nearly $360 million 
over the past two years. In addition to installing a number of priority 
measures, watershed sponsors, NRCS, and other stakeholders accomplished 
a reduction by reviewing all remaining project measures and eliminating 
some of those which are no longer economically and environmentally 
feasible. The primary initiative itself is over. It resulted in the 
deletion of 1900 miles of channel work and 410 structures from 
watershed plans. Further reductions and revisions are presently being 
considered as planning staffs continue to prepare supplements.
    Funds will be made available to projects according to a competitive 
funding mechanism for targeting assistance toward the highest ranked 
projects. These are the high-priority projects that provide the highest 
net benefits to society, considering economic, social and environmental 
factors. For those sponsors with lower priority projects that would 
prefer not to alter their projects to increase its economic or 
environmental benefits--making it more competitive--or to wait, up to 
$15 million is only available for loans made through the rural 
development programs, such as Rural Utility Service's water and waste 
water loans. These are subsidized loans, in which, depending upon the 
income of the community, the interest rate of the loan can be reduced.
    Mr. Skeen. What were the results of the Conservation Planning Pilot 
Projects conducted in six states?
    Response. The report on the Conservation Planning Pilot Projects 
conducted in six states--Georgia, Idaho, Minnesota, Nebraska, New York, 
and Pennsylvania--is currently being finalized. Following are comments 
from the draft report planned for release in early May, 1997.
    Positive results included:
    Improved dialog and open discussion with farmers, ranchers, 
organizations, and local, state, and federal agencies to develop a 
process, criteria, and tools for resource management planning.
    Obtained local interagency support, financial resources, staff 
resources, and in some cases local cooperative agreements and/or 
operational procedures.
    Obtained feedback from individual farmers and ranchers that their 
needs were met and that they really valued their plans because the 
plans were developed specifically for their objectives and business 
needs.
    Strengthened the use of multi-disciplined and multi-organizational 
teams to provide comprehensive technical and planning assistance to 
meet producer's needs.
    Concerns included:
    The additional staff time required to coordinate, develop, and 
communicate a more comprehensive plan.
    The minimum needed for plan documentation support versus the 
minimum requirements necessary for ``the plan'' to meet the needs of 
the producer and NRCS standards.
    The confidentiality of the plan and the resource data used for the 
plan development.
    The assurance that by developing a comprehensive resource 
management plan that the producer would be in compliance with local, 
state, and federal laws and regulations by farmers, ranchers, and 
agricultural organizations.
    The ability of the technical service providers (NRCS, other 
agencies, and third party vendors) to provide adequate--quantity and 
quality--technical assistance.
    A copy of the final ``Conservation Planning Pilot Projects'' report 
will be provided to the Committee when it is completed.
                 resource conservation and development
    Mr. Skeen. Please update the table that appears on page 624 of last 
year's hearing record showing, for the Resource Conservation and 
Development program, RC&D, the amount of Federal and non-Federal funds 
devoted to cost sharing, and the amount of Federal and non-Federal 
funds provided for technical assistance, to reflect fiscal year 1996 
actuals and fiscal year 1996 estimates.
    [The information follows:]

                                     RC&D FEDERAL AND NON-FEDERAL ASSISTANCE                                    
----------------------------------------------------------------------------------------------------------------
                                                                     Financial       Technical      Non-federal 
                              Year                                    federal         federal       assistance  
----------------------------------------------------------------------------------------------------------------
1984............................................................      $9,445,821     $16,492,404           (\1\)
1985............................................................       8,740,000      17,524,707           (\1\)
1986............................................................       8,085,568      17,453,268           (\1\)
1987............................................................       6,536,078      17,918,918           (\1\)
1988............................................................       5,300,853      19,233,164     $65,975,000
1989............................................................       4,620,811      20,559,546           (\1\)
1990............................................................       4,200,061      23,145,385     108,073,000
1991............................................................       3,947,428      24,339,421     160,465,000
1992............................................................       2,234,289      31,383,945     131,132,000
1993............................................................       2,048,298      30,795,181      75,102,000
1994............................................................       2,401,326      31,472,850      71,936,000
1995............................................................       1,402,613      30,799,303      80,387,000
1996............................................................         262,571      29,169,517      89,230,000
1997 estimate...................................................               0      29,377,000     94,780,000 
----------------------------------------------------------------------------------------------------------------
(\1\) Information not available.                                                                                

    Mr. Skeen. Also, update the table on the next page showing the 
number of RC&D projects that were initiated, completed, and those 
ongoing, to include fiscal year 1996 actuals and fiscal year 1997 
estimates.
    [The information follows:]

              RC&D MEASURES ADOPTED, PLANNED, AND COMPLETED             
------------------------------------------------------------------------
                  Year                    Adopted    Planned   Completed
------------------------------------------------------------------------
1984...................................      2,215        438      1,500
1985...................................      1,392        123      1,103
1986...................................      1,602         58      1,053
1987...................................      1,487         77      1,188
1988...................................      1,647         53      1,303
1989...................................      1,178        347        661
1990...................................      1,642      1,114      1,251
1991...................................      1,919      1,314      1,303
1992...................................      2,381      1,762      1,417
1993...................................      2,382      1,765      1,691
1994...................................      2,712        675      1,984
1995...................................      2,280      1,942      1,848
1996...................................      2,777      2,156      2,342
1997 estimate..........................      2,750      2,100      2,300
------------------------------------------------------------------------

              resource conservation and development loans
    Mr. Skeen. From fiscal year 1965 through fiscal year 1994, the 
Department made 292 RC&D loans for a total of $68,484,993. In fiscal 
year 1995 there were 92 loans outstanding for a total of $5,498,000. 
What is the status of these loans.
    Response. In fiscal year 1996, there were 82 RC&D loans outstanding 
for a total of $4,316,000, with no delinquencies.
    Since the inception of the program in fiscal year 1965 through 
fiscal year 1995, a total of 292 RC&D loans have been made for a total 
of $29,848,709.
            non-federal watershed and rangeland coordinators
    Mr. Skeen. You are requesting an increase of $17,989,000 in the 
Resource Conservation and Development Program to fund 400 non-Federal 
watershed and rangeland coordinators in 25 states for high-priority 
watersheds. Provide a list of these states as well as the watersheds.
    Response. The states and the particular high priority watersheds 
that would benefit from the assignment of coordinators have not been 
selected at this time. The selections of locations would be made by the 
Deputy Chief for Programs and the state conservationists based upon 
recommendations from the state technical committees, local leaders and 
partners. The list would be developed once funding for the coordinators 
was allocated.
    Mr. Skeen. The justifications for this increase is to fund local 
non-Federal coordinators throughout the country including grazinglands 
assistance, the Bay-Delta region of California, and the salmon recovery 
sites located in California, Oregon, Washington, and Idaho. How much of 
the requested increase will be devoted to each of these initiatives?
    Response. The amount of funding per state/watershed has not been 
determined. However, the Bay-Delta region of California and the salmon 
recovery sites located in California, Oregon, Washington, and Idaho 
represent good examples of the kinds of high priority watershed that 
would receive assistance with non-Federal coordinators.
    Mr. Skeen. How many non-Federal watershed and rangeland 
coordinators are currently being funded.
    Response. There are no non-federal watershed or rangeland 
coordinators currently being funded through NRCS. However, a number of 
USDA projects have coordinators funded through other sources of funding 
such as EPA 319 grants. Examples include Big Darby Watershed Project 
and Indian Creek projects in Ohio, and Huichica Creek in California.
    Mr. Skeen. Why do you propose to create a new program or new 
coordinators? Why not provide increased funding to existing entities to 
carryout work in specific areas of interest or identified projects?
    Response. This is not a new program. It includes a temporary, 
targeted grant to an existing non-profit organization formerly funded 
by Environmental Protection Agency--EPA: For the Sake of the Salmon. 
The remainder will be used in similar fashion to high priority 
watershed and rangeland, coordinating with the existing network of RC&D 
areas. The current RC&D council priorities and the RC&D program purpose 
are compatible with this work. RC&D councils currently include 
watershed enhancement, salmon habitat restoration, and grazinglands 
improvement in the resource management portions of their area plans.
    We in NRCS believe in and will continue to support a local planning 
process that uses the best-available science for solving problems. We 
believe that planning on a watershed basis is imperative and that a 
governmental presence to guide and assist with the coordination of 
these efforts is essential. At the local level, the keys to project 
success include: building citizens cooperation through education; 
getting stakeholders to participate in developing the project's goals; 
and tailoring the project's strategies, water quality monitoring and 
regulatory enforcement efforts to local conditions. Examples of the 
type of projects that NRCS hopes that these coordinators can help 
advance include: Huichica Creek and West Stanislaus County, California; 
Otter Lake, Illinois; Big Spring Basin, Iowa; Tar-Pamlico River Basin, 
North Carolina; Big Darby Creek, Ohio; Coos Bay-Coquille River, Oregon; 
Black Earth Creek, Wisconsin; Lake Champlain, Vermont; and, the 
Malpar's Borderland Group's work, Arizona.
    This effort is designed to provide technical assistance to existing 
entities to carry out planning on a watershed. The priority watersheds 
will be selected by state conservationists based upon recommendations 
from state technical committees, local leaders and partners.
    Mr. Skeen. As a result of the Secretary's decision in 1994 to 
modernize and reinvent the partnerships with conservation districts, 
USDA is signing new mutual agreements and companion cooperative working 
agreements to replace more than 50 year old basic and supplemental MOUs 
with conservation districts. Tell the Committee how these new 
agreements are different from the old ones. Provide some specific 
examples of how things have changed.
    Response. The Mutual Agreement--MA--establishes the framework for 
cooperation among the US Department of Agriculture, states, tribes and 
conservation districts. This is a one page document that commits 
Federal, State/Tribal governments and local Conservation Districts to 
cooperate together in implementing their respective long range natural 
resource conservation programs; the MA is the umbrella for all USDA 
agencies and opens up the opportunity for development of other 
agreements with new partners. For the first time in the history of this 
partnership of over 50 years, State Governors and Tribal Council/
Governments--or their designee--are signatories on the MA. The MA 
provides an opportunity for Indian Tribes to establish tribal 
conservation districts. To date 95% of the State Governors have signed 
the MA and 15 Tribal Conservation Districts have been established.
    The Cooperative Working Agreement--CWA--defines the relationship 
between NRCS, the conservation districts or tribes and state 
conservation agencies; and provides the opportunity for each individual 
state to establish and define its own natural resource concerns and 
action plan. The CWA can be used as a model for the development of 
other agreements with new and other potential partners.
    The Supplemental Memorandum of Understanding identified only what 
Natural Resources Conservation Service and Conservation Districts would 
do excluding opportunities with other conservation agencies and 
organizations.
    This unique partnership between the 3,000 Conservation Districts, 
United States Department of Agriculture and the Natural Resources 
Conservation Services formed by the MA and CWA will continue to provide 
the strong link and guiding force into the next millennium.
           federal and non-federal sources of reimbursements
    Mr. Skeen. Provide a detailed breakout of the other Federal and 
non-Federal sources of obligations for fiscal years 1996, 1997, and 
1998.
    [The information follows:]

              OTHER FEDERAL AND NON FEDERAL REIMBURSEMENTS              
------------------------------------------------------------------------
                                       1996         1997         1998   
                                      Actual     Estimated    Estimated 
------------------------------------------------------------------------
Other Federal Sources............    1,947,982    3,733,000    3,733,000
State and local Government.......   13,539,595   19,109,500   19,109,000
Private..........................       43,004       57,500       57,500
                                  --------------------------------------
      Total......................   15,530,581   22,900,000   22,900,000
------------------------------------------------------------------------

    Mr. Skeen. Why do you expect these reimbursements to almost double 
in fiscal year 1997?
    Response. I expect these reimbursements to almost double in fiscal 
year 1997 for financial assistance reimbursements from state and local 
governments; due to anticipated emergency watershed protection programs 
activities, as well as the other ongoing Watershed and Flood Prevention 
program activities.
                    number of outstanding borrowers
    Mr. Skeen. You do not show any improvement in the number of 
outstanding borrowers over the three year period of 1996, 1997, and 
1998. Is there a reason for this?
    Response. These were estimates only. We hope to see a decrease in 
the number of outstanding borrowers.
              resource conservation and development loans
    Mr. Skeen. How many RC&D loans were made under the Bankhead-Jones 
Tenant Act to local organizations for financing the local share of the 
cost of installing approved RC&D projects in fiscal years 1995 and 
1996? Are there any requests for these loans in fiscal year 1997?
    Response. Even though these loans are available to RC&D sponsors, 
there have been no loan applications in fiscal years 1995 and 1996, and 
we are unaware of any applications for fiscal year 1997.
                  management recommendations for rc&d
    Mr. Skeen. Provide a list of the management recommendations that 
were identified in fiscal year 1995 and briefly describe what you are 
doing to respond to these recommendations.
    Response. Following is a copy of the USDA RC&D Working Group Annual 
Report on the Resource Conservation and Development Program.

[Pages 594 - 605--The official Committee record contains additional material here.]


          use of pelleted newspaper on demonstration projects

    Mr. Skeen. A demonstration project in the Big Country RC&D in Texas 
pelleted newspaper and applied the pellets to cropland at a rate of 
five tons per acre to achieve a 30 percent ground cover on five acre 
plots. Analysis showed that soil loss from sediment was reduced 41 
percent, surface runoff reduced 20 percent, and wind erosion reduced 50 
percent at the same time cotton yield increased 32 percent. Is this 
technology being expanded to other areas of the country?
    Response. Yes, this technology is being expanded to other parts of 
the country. The Big Country RC&D Council in partnership with NRCS and 
the Agricultural Research Service--ARS--has made information available 
to other RC&Ds and organizations throughout the country. Dr. James H. 
Edwards, Jr., ARS-Soils Dynamic Research, has presented results of this 
project at the Biocycle South Central Meeting, Austin, TX; the American 
Society of Agronomy Meeting, Cincinnati, OH; the Beltway Cotton 
Conference, San Diego, CA; the Southern Association of Agricultural 
Scientists Meeting, Nashville, TN; and the Workshop on Sustainable By-
Product Management, Twin Falls, ID.
    Dr. Edwards will make a presentation at the National Association of 
RC&D Councils Conference in June 1997 in St. Paul, MN. Two other RC&D 
areas have pilot projects using the pelleted newspaper: North Plains 
RC&D, Devils Lake, ND, on wheat and Prairie Rivers RC&D, Henry, II, on 
corn and soybeans.
    This demonstration project was selected as a finalist in the 1997 
Governors Awards for Environmental Excellence.
                       water quality initiatives
    Mr. Skeen. Please update the table appears on page 625 of last 
year's hearing record, showing the funding level of water quality 
incentives, to reflect fiscal year 1996 actuals and fiscal year 1998 
estimates.
    [The information follows:]

                   FUNDING FOR THE PRESIDENTIAL WATER QUALITY INITIATIVE FISCAL YEARS 1990-98                   
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                   1991    1992    1993    1994    1995    1996    1997    1998 
----------------------------------------------------------------------------------------------------------------
Technology development..........................     7.5     7.6     7.9     8.2     7.8     7.8     7.8     7.8
Regional projects...............................     7.9     8.3     9.5     9.3    11.6    11.6    12.0    12.0
Hydrologic areas................................    15.7    16.3    12.3    12.6    10.5    11.2     5.0     5.0
Demonstration areas.............................     4.4     4.6     4.6     3.6     3.7     4.0     2.0     2.0
Ongoing projects................................     8.6     8.8    11.7    13.3    13.0    12.0    20.1    20.1
Special projects................................     0.0     0.0     0.0     0.0      .4      .6      .0      .0
                                                 ---------------------------------------------------------------
      Total.....................................    44.1    45.6    46.0    47.0    47.0    47.2    46.9    46.9
----------------------------------------------------------------------------------------------------------------

                      regional project allocations
    Mr. Skeen. Please update the table that appears on page 626 of last 
year's hearing record, showing the regional project allocations, to 
include actuals and fiscal year 1198 estimates.
    [The information follows:]

                               REGIONAL PROJECT ALLOCATIONS, FISCAL YEARS 1993-98                               
                                              [Dollars in millions]                                             
----------------------------------------------------------------------------------------------------------------
                                           Allocations (1,000s)                         Staff Years             
        Regional Projects        -------------------------------------------------------------------------------
                                   1994    1995    1996    1997    1998    1994    1995    1996    1997    1998 
----------------------------------------------------------------------------------------------------------------
Chesapeake Bay..................    $4.5    $4.7    $4.7    $5.0    $5.0      64      64      64      67      64
Gulf of Mexico..................      .4      .4      .3      .4      .4       8       8       8       8       8
Land and Water 201..............      .8      .8      .7      .7       0      18      18      18      18       0
Great Lakes.....................     1.2     1.2     1.2     1.3     1.3      16      16      16      16      15
Other Regional Authorities......     3.7     2.9     4.3     5.0     5.3      54      54      42      50      50
----------------------------------------------------------------------------------------------------------------

                    status of hydrologic unit areas
    Mr. Skeen. What is the status of the hydrologic unit areas started 
in fiscal year 1990 and scheduled for completion in fiscal year 1998 
and the 35 unit areas started in fiscal year 1991 and scheduled for 
completion in fiscal year 1999?
    Response. These sixty-six active Projects continue to make good 
progress and are on track to complete their intended goals by the end 
of 1999. In fiscal year 1997, line-item funding to these Projects was 
reduced by roughly 50 percent, but with the difference in funding 
retained by the state for broader application of water quality work. 
This is consistent with the original goals established for these 
Projects which included additional technical assistance and outreach to 
neighboring areas with similar water quality concerns.
    Mr. Skeen. Update the table that appears on page 626 of last year's 
hearing record showing the funding levels provided to these areas to 
include fiscal year 1998.
    [The information follows:]

                                              HYDROLOGIC UNIT AREAS                                             
                                              [Funding in millions]                                             
----------------------------------------------------------------------------------------------------------------
                                                   1991    1992    1993    1994    1995    1996    19971   19981
----------------------------------------------------------------------------------------------------------------
Hydrologic Unit Areas...........................    15.7    16.3    12.3    12.6    10.5    11.2     5.0     5.0
----------------------------------------------------------------------------------------------------------------
\1\ Estimates                                                                                                   

                  water quality demonstration projects
    Mr. Skeen. What is the status of the seven water quality 
demonstration projects started in fiscal year 1990 that are scheduled 
for completion in fiscal year 1998, and the eight projects started in 
fiscal year 1991 that requested extensions to fiscal year 1999?
    Response. These fifteen active Demonstration Projects are on track 
to complete their intended goals by the end of 1999. As with the 
Hydrologic Unit Area Projects, line-item funding to these Projects was 
reduced by approximately 50 percent in fiscal year 1997, but with the 
difference in funding retained by the state for broader water quality 
work of a related nature. One of the original goals of these 
Demonstration Projects was to strengthen interagency partnerships and 
increase local involvement in the application of innovative nonpoint 
source improvements. As work has proceeded in these areas, additional 
interest has been generated and the need for a broadening of our 
technical assistance to adjacent and neighboring areas has become 
necessary.
    Mr. Skeen. Update the table that appears on page 626 of last year's 
hearing record showing the funding levels provided to these projects to 
include fiscal year 1998.
    [The information follows:]

                                                                 DEMONSTRATION PROJECTS                                                                 
                                                                  [Funding in millions]                                                                 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     1991       1992       1993       1994       1995       1996      19971      19981  
--------------------------------------------------------------------------------------------------------------------------------------------------------
Demonstration Projects..........................................        4.4        4.6        4.6        3.6        3.7        4.0        2.0        2.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimates                                                                                                                                           

    Mr. Skeen. The Physical Impacts Assessment final report being 
conducted to evaluate the 16 water quality projects was scheduled for 
release by the end of fiscal year 1996. What is the assessment?
    Response. The final report ``Assessment of Progress of Selected 
Water Quality Projects of USDA and State Cooperators'' was published in 
July 1996. Producer adoption of improved practices in this set of 16 
projects led to reductions in average annual applications of nitrogen 
and phosphorus of 54 pounds per acre and 32 pounds per acre, 
respectively. Improvements in pesticide management included shifts to 
chemicals of lower leaching potential, more Integrated Pest Management 
practices, and some reductions in chemical use. Competent use of 
simulation modeling to project long-term change in leaching and runoff 
of nutrients to water only occurred in six projects. Water quality 
monitoring documented water quality improvements for individual 
practices and instrumented sites but not at the level of any one 
project or watershed.
    Mr. Skeen. What are the findings of the survey conducted by the 
University of Wisconsin to determine the adoption rates of water 
quality practices among USDA program participants and non-program 
participants?
    Response. The final report is expected to be available in September 
1997.
    Mr. Skeen. Last year you provided the Committee with a brief 
description of each of the nine regional projects that are currently 
underway including how much has been spent on each project. Would you 
please update these projects for us.
    Response. Only seven of these nine regional Projects continue to be 
funded as they have been in the past. These seven include the Water 
Quality Hydrologic Unit Areas and the Demonstration Projects that I 
have already addressed. Also included are the Chesapeake Bay Program, 
National Estuary Program, Great Lakes Program, Lake Champlain Project, 
and the Gulf of Mexico Program. The functions of the Colorado River 
Salinity Control Program were transferred to the Environmental Quality 
Incentives Program by the 1996 Farm Bill. The Land and Water 201 
Program, previously carried out in coordination with the Tennessee 
Valley Authority, has also been terminated but with the technical 
assistance dollars formerly provided to this Program now directed tothe 
same general region in support of the Southeast Regional Agriculture 
and Natural Resources Forum.
    [The information follows:]
              water quality hydrologic unit area projects
    The Hydrologic Unit Area (HUA) Projects include 74 interagency 
water quality improvement projects initiated in 1990 as part of the 
USDA Water Quality Initiative. Projects were located in every state 
except Nevada and Alaska. The objective of these broad-based projects 
is to accelerate technical and financial assistance, and information 
and education activities to local and State Priority watersheds. NRCS 
is responsible for providing technical assistance directly to landusers 
in these priority watersheds. In 1997, $5 million, representing 
approximately 85 staff years will be dedicated to these areas.
                  water quality demonstration projects
    A total of 16 Water Quality Demonstration Projects were initiated 
as part of the President's Water Quality Initiative in 1990. 
Demonstration Projects are designed to demonstrate the effectiveness of 
conservation practices in treating specific nonpoint source pollution 
problems and to promote the use of these practices in other areas. 
These projects are implemented under the joint leadership of NRCS, FSA, 
and CSREES. Projects are evaluated annually to determine the effects 
that selected practices have on the water quality problem, the extent 
that improved practices are adopted, and the cost of practice 
installation. NRCS is responsible for providing direct technical 
assistance to landusers in the application of conservation and best 
management practices. In 1997, $2 million, representing approximately 
34 staff years will be dedicated to these projects.
                         chesapeake bay program
    The Chesapeake Bay Agreement, signed in 1983 as a cooperative 
agreement between the Bay States and the Federal Government, assigns 
NRCS responsibility for providing accelerated technical assistance in 
the Chesapeake Bay drainage area for the restoration and protection of 
the Bay's water quality and living resources. In 1997, $4.75 million, 
representing approximately 80 staff years will be dedicated to the Bay 
Program.
                        national estuary program
    In coordination with EPA and the National Oceanic and Atmospheric 
Administration--NOAA, NRCS has agreed to provide additional funding for 
accelerated technical assistance in selected watersheds. In 1997, $4 
million, representing approximately 67 staff years will be dedicated to 
providing additional technical assistance to landusers in the 
watersheds of these estuaries of national importance.
                          great lakes program
    In support of the U.S. initiative to the Great Lakes Program, NRCS 
has responsibility for providing on-farm technical assistance to 
farmers in the application of erosion control practices to reduce 
erosion and delivery of associated nutrients and pesticides within the 
basin. In 1997, $1.3 million, representing approximately 21 staff years 
will be dedicated to additional technical assistance to this program.
                         lake champlain project
    The Lake Champlain Basin is considered a high priority area for 
addressing water quality problems caused by agricultural nonpoint 
source pollution. The Lake Champlain Special Designation Act of 1990 
provides for the development and implementation of a pollution 
prevention, control and restoration plan for the Basin. NRCS is 
responsible within this area for the delivery of accelerated technical 
assistance to agricultural producers to help in the control of erosion 
and management of animal waste associated with the significant dairy 
industry of the area. In 1997, $550,000 was provided to NRCS in New 
York and Vermont for additional technical assistance to this project.
       southeast regional agriculture and natural resources forum
    This initiative, formally funded as the Land and Water 201 Program, 
is directed at providing additional technical assistance to seven 
states including Alabama, Georgia, Kentucky, Mississippi, North 
Carolina, Tennessee, and Virginia. The objective of this initiative is 
to reduce erosion and sedimentation within the basin and to deal 
aggressively with the water quality problems associated with a rapidly 
expanding poultry industry and other related animal waste problems. In 
1997, $710,000 representing approximately 12 staff years will be 
provided for this accelerated technical assistance to the region.
                         gulf of mexico program
    NRCS is committed within the framework of the Federal Interagency 
Agreement coordinating nonpoint source pollution control activities for 
the Gulf of Mexico, to target additional technical assistance funds in 
the amount of $325,000 to these activities. These funds went to support 
approximately 6 additional staff years to the region.
                        international activities
    Mr. Skeen. Update the table that appears on page 629 of last year's 
hearing record, showing the total cost to NRCS to provide this 
assistance and the amount reimbursed by other agencies or organizations 
to include fiscal year 1996.
    [The information follows:]

   INTERNATIONAL ACTIVITIES TECHNICAL ASSISTANCE COST OF INTERNATIONAL  
                          TECHNICAL ASSISTANCE                          
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                  Fiscal year                    Total cost   Reimbursed
------------------------------------------------------------------------
1991..........................................          883          783
1992..........................................          970          870
1993..........................................        1,144        1,034
1994..........................................        1,018          875
1995..........................................          565          415
1996..........................................          560          280
                                               -------------------------
      Totals..................................        5,140        3,257
------------------------------------------------------------------------

                  water quality monitoring techniques
    Mr. Skeen. You use ARS simulation models and water quality 
monitoring techniques to estimate benefits resulting from applied 
practices. Tell the committee what some of these benefits are?
    Response. Due to the long and highly variable periods of time for 
movement of agrichemicals down through the soil profile to water or 
across the land's surface to surface water and to the known and unknown 
effects of the physical environment on these agrichemicals, project 
managers and scientists often have great difficulty in quantifying the 
change in water quality of applied practices. ARS physical process 
simulation models, although complex, simplify reality and allow 
knowledgeable scientists to approximate the degree to which changes in 
crop rotations, tillages, land treatment practices, and changes in 
management may reduce average annual loadings of sediment, nutrients, 
and pesticides to nearby surface waters over a long period of time.
              physical impact assessment of water quality
    Mr. Skeen. What were the results of the eight hydrologic unit areas 
and eight demonstration projects that were completed in 1996?
    Response. A physical impact assessment of eight hydrologic unit 
areas and eight demonstration projects was completed in 1996 and some 
projects were already able to document water quality improvements due 
to practices installed. The 16 projects, however, were not closed and 
will continue their work through FY 1999. We will provide you with the 
results when they are completed.
                         small watershed loans
    Mr. Skeen. Update the table that appears on page 629 of last year's 
hearing record showing the loan authority level and the number of loans 
made to include fiscal year 1996.
    [The information follows:]

                    LOANS FOR SMALL WATERSHED PROGRAM                   
------------------------------------------------------------------------
                                           Loan      No. of     Dollar  
             Fiscal year                authority    loans      amount  
------------------------------------------------------------------------
1987.................................    7,900,000        1     $148,200
1988.................................    7,900,000        0            0
1989.................................    7,900,000        0            0
1990.................................    4,000,000        2    2,649,000
1991.................................    4,000,000        0            0
1992.................................    4,000,000        2      502,000
1993.................................    4,000,000        0            0
1994.................................    4,000,000        0            0
1995.................................            0        0            0
1996.................................            0        0            0
------------------------------------------------------------------------

    Mr. Skeen. What is the status of these loans?
    Response. The status of the loans from 1987 to 1996 are all current 
except three. In total, there are 245 loans outstanding, totaling $45.8 
million, with three loans in a deliquent status.
                      public affairs funding level
    Mr. Skeen. Please update the table that appears on page 629 of last 
year's hearing record showing the funding and staffing levels for the 
Public Affairs Office, to include fiscal year 1998.
    [The information follows:]

                                    PUBLIC AFFAIRS FUNDING AND STAFFING LEVELS                                  
----------------------------------------------------------------------------------------------------------------
                                            1991     1992     1993     1994     1995     1996     1997     1998 
----------------------------------------------------------------------------------------------------------------
Funding ($000)..........................    2,084    2,436    1,875    1,416    1,238      938      961      838
FTE.....................................       45       45       42       29       21       13       13       11
----------------------------------------------------------------------------------------------------------------

    Mr. Skeen. Provide a five year table that shows how much is spent 
annually on the Grazing Lands Conservation Initiative including 
estimates for fiscal year 1998.
    [The information follows:]

     Grazing Lands Conservation Initiative Five Year Annual Spending

                        [In thousands of dollars]

        Fiscal year                                      Annual spending
1994..........................................................       180
1995..........................................................       250
1996..........................................................     5,000
1997..........................................................    10,000
1998..........................................................    10,000

    Mr. Skeen. Provide a table that shows the number of grazing land 
specialists at the agency for each year since 1990.
    [The information follows:]

                                          NRCS GRAZING LAND SPECIALISTS                                         
----------------------------------------------------------------------------------------------------------------
          Fiscal year              1990     1991     1992     1993     1994     1995     1996     1997     1998 
----------------------------------------------------------------------------------------------------------------
Number.........................      248      240      238      234      212      208      288      330      400
----------------------------------------------------------------------------------------------------------------

                  training rangeland conservationists
    Mr. Skeen. You are requesting an increase of $4,056,000 for 
training for rangeland conservation. You state this funding may be 
supplemented by up to $944,000. Where will this additional funding come 
from?
    Response. The additional $944,000 that may be utilized to implement 
the grazing lands training program will come from a variety of sources. 
Conservation Technical Assistance funds can be used to support the 
training if necessary. Additionally, funding may be leveraged with 
those from federal, state and local partners to provide training to a 
wider audience that would include representatives from federal, state, 
and local governments, industry, private livestock producers and the 
public. Participating partners may include the member organizations of 
the National Grazing Lands ConservationInitiative Steering Committee, 
Conservation Districts, Universities, and others.
    Mr. Skeen. How many staff will be trained with this funding?
    Response. Approximately 1,000 employees will benefit from this 
training. A majority of the training will be developed to include a 
variety of partners, including university, extension, industry, private 
grazing land owners and managers, as well as the public that benefit 
from properly managed grazing lands.
                        grazing lands assistance
    Mr. Skeen. Congress has provided increases over the past two years 
specifically for grazing lands work. This is in addition to the amount 
the agency was already spending on this type work. You state in the 
budget justifications that less than two percent of the workforce is 
comprised of grazing land specialists.You also state that while 80 
percent of the 1.4 million grazing land operators have serious range 
problems, you were only able to provide less than one-third of one 
percent of them with planning assistance in 1994 and 1995. With the 
increases provided in fiscal years 1996 and 1997, what are the levels 
of assistance being provided?
    Response. In 1994 and 1995, NRCS provided technical assistance, on 
an average annual basis, to more than 3,700 owners and managers of 
private grazing lands. In 1996, we assisted an additional 3,000 
landusers for a total of more than 6,700. In 1997, we expect that as 
many as 8,200 owners and managers of private grazing lands will be 
receiving technical assistance on a voluntary basis from qualified 
grazing land specialists. This increase in landusers assisted is a 
result of the addition of 122 grazing land specialists directly related 
to the increased funding for the grazing lands conservation initiative. 
It is anticipated that the productivity of these individuals as well as 
others will continue to increase as they receive additional training 
and gain experience.
                   grazing land technology institute
    Mr. Skeen. Where is the Grazing Land Technology Institute located 
and how is it funded?
    Response. The National Grazing Land Technology Institute is located 
at the NRCS Region Office in Fort Worth, Texas. Funding is provided by 
NRCS.
    Mr. Skeen. In fiscal year 1996, more than 200 employees enrolled in 
courses in grazing science, livestock management, and related sciences. 
Where are these courses taught?
    [The information follows:]
                      grazing land related courses
    Pasture Ecology, North Carolina State, Raleigh, NC.
    Plant Herbivore Interaction, Utah State University, Logan, UT.
    Working Effectively with Livestock Producers, TCU, Ft. Worth, TX.
    Rangeland Ecology, Texas A&M College Station, TX.
    Prescribed Burning, UT, TX, OK.
                       grazing lands allocations
    Mr. Skeen. You state in the budget justifications that in the 
1980's and early 1990's, NRCS provided assistance on an average of 
about 32 million acres of grazing lands annually. In 1996, this 
increased to about 35 million acres. How much did you spend prior to 
1996 and how much did you spend in 1996?
    Response. In 1995, NRCS allocated approximately $12.8 million 
representing a total of 208 FTE's to deliver technical assistance to 
owners and managers of private grazing lands. In 1996, NRCS allocated 
approximately $19.5 million representing a total of 288 FTE's to 
deliver technical assistance to owners and managers of private grazing 
lands. Much of the assistance provided in the late 1980's and early 
1990's was a direct result of planning efforts of the agency on grazing 
lands which occurred prior to 1986.
    Mr. Skeen. What are your estimates for 1997?
    Response. In 1997, NRCS allocated approximately $23.1 million 
representing a total of 330 FTE's to deliver technical assistance to 
owners and managers of private grazing lands.
                          nrcs budget request
    Mr. Skeen. Provide the Committee with a breakout of your budget 
request to the Secretary, the Secretary's request to OMB, and the OMB 
allowance.
    [The information follows:]

[Page 613--The official Committee record contains additional material here.]


                       fip and sip appropriation

    Mr. Skeen. Update the table that appears on page 631 and 632 of 
last year's hearing record, showing a comparison of FIP and SIP 
appropriations, to include fiscal year 1997 actuals and the fiscal year 
1998 budget request.
    [The information follows:]

                COMPARISON OF FIP AND SIP APPROPRIATIONS                
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                  Fiscal year                       FIP          SIP    
------------------------------------------------------------------------
1993..........................................       12,446       17,800
1994..........................................       12,820       17,932
1995..........................................        6,625       18,283
1996..........................................        6,325        4,496
1997..........................................        6,325        4,500
1998 estimate.................................        6,325       10,230
------------------------------------------------------------------------

                      forestry incentives program
    Mr. Skeen. Did the 1996 farm bill make any changes to FIP other 
than extend the program to 2002?
    Response. The Federal Agriculture Improvement and Reform Act of 
1996, Subtitle G--Forestry, Sec. 373 amended the Cooperative Forestry 
Assistance Act of 1978 by striking ``annually'' and inserting ``for 
each of fiscal years 1996 through 2002''.
    Mr. Skeen. When will fiscal year 1996 program summary data be 
available?
    Response. The final fiscal year 1996 Forestry Incentives Program 
data will be available by July 1, 1997. The final draft data currently 
being reviewed indicates a total of $6,622,933.00 was paid in cost-
shares for fiscal year 1996. Final draft data also indicates 3,114 
participants received cost-shares on 126,096 acres of tree planting, 
timberstand improvement and natural regeneration practices.
        agricultural resource conservation demonstration program
    Mr. Skeen. Please update the table that appears on pages 632 of 
last year's hearing record showing the history of the agricultural 
resource conservation demonstration program to incorporate the new 
farmland protection program.
    Response. The statutory authority for the Agricultural Resource 
Conservation Demonstration Program expired September 1996. Following is 
a history table for the Agricultural Resource Conservation 
Demonstration Program and a table with information on the new Farmland 
Protection Program.

 HISTORY OF THE AGRICULTURAL RESOURCE CONSERVATION DEMONSTRATION PROGRAM
------------------------------------------------------------------------
                                                  Loan level     Number 
                  Fiscal year                     guaranteed    of loans
------------------------------------------------------------------------
1992..........................................     $10,000,000         1
1993..........................................       6,875,000         1
1994..........................................       6,673,000         1
1995..........................................           (\1\)  ........
1996..........................................          (1, 2)  ........
------------------------------------------------------------------------
\1\ No appropriation.                                                   
\2\ Program expired 12/31/95.                                           


                                   HISTORY OF THE FARMLAND PROTECTION PROGRAM                                   
----------------------------------------------------------------------------------------------------------------
                                                          Obligated funds                                       
                      Fiscal year                           for easement        Technical            Total      
                                                            acquisition         assistance                      
----------------------------------------------------------------------------------------------------------------
1996...................................................        $14,325,000           $575,000        $14,900,000
----------------------------------------------------------------------------------------------------------------

                      farmland protection program
    Mr. Skeen. To be eligible for the program land must be subject to a 
pending offer from a State or local government. Are private landowner 
offers precluded from the program?
    Response. The Farmland Protection Program provides funds to State, 
Tribe, or local government entities and establishes partnerships with 
them. Proposals are to be received from those qualified government 
entities with pending offers, instead of the private landowners. 
Private landowners can submit their offers directly to their State, 
Tribe, or local programs.
    Mr. Skeen. Funding for the program is not to exceed $35 million. 
How much has been spent to date?
    Response. Fifteen million dollars have been spent in fiscal year 
1996, including $14.5 million obligated to 37 States and local 
government entities and $0.5 million reimbursable technical assistance 
funds to the Natural Resources Conservation Service.
    Mr. Skeen. The farm bill provided for a total of $35 million over 
seven years. Why do you propose to spend the entire amount in the first 
two years?
    Response. Using purchase of development rights to protect valuable 
farmlands for their environmental, social, and economic benefits has 
been existing since 1976. It was estimated that, as of April 1996, 
State and local government entities spent approximately $1 billion in 
acquiring conservation easements for protecting farmlands from 
conversion to nonagricultural uses. Experience of the first year in 
implementing the Farmland Protection Program indicated that the demands 
for Federal funds from the State and local government entities were 10 
times greater than the available funds in fiscal year 1996. Federal 
funds of $35 million can hardly meet the needs and demands of the State 
and local programs. As urban development pressure continues, it will be 
less costly to acquire conservation easements at the earliest possible 
time. We also believe that the sooner the farmlands are protected, the 
sooner the environmental, social, and economic benefits can be 
materialized.
    Mr. Skeen. Provide a list of the states where the conservation farm 
option program will be limited to.
    Response. The conservation farm option program will be available in 
all states. However, it is unlikely that contracts will be executed in 
every state.
                      rural abandoned mine program
    Mr. Skeen. Update the table that appears on page 634 of last year's 
hearing record, showing how much has been transferred by the Department 
of Interior from the Abandoned Mine Reclamation Trust Fund for the 
Rural Abandoned Mine program, to include estimates for fiscal year 
1997.
    [The information follows:]

                               ABANDONED MINE RECLAMATION TRUST FUND--RAMP STATUS                               
                                                  [In millions]                                                 
----------------------------------------------------------------------------------------------------------------
                                                                       1997     1996     1995     1994     1993 
----------------------------------------------------------------------------------------------------------------
Total collections in the trust fund................................    260.0    254.6    255.4    238.2    244.2
Total available for transfer.......................................     26.0     25.5     25.5     23.8     24.4
Total transferred to NRCS..........................................      0.0      0.0      7.9     13.2     13.3
----------------------------------------------------------------------------------------------------------------

                         earth team volunteers
    Mr. Skeen. How many Earth Team volunteers worked for the agency in 
fiscal year 1996? Give us some examples of accomplishments that were 
achieved using these volunteers for the record.
    Response. During fiscal year 1996, 14,748 Earth Team Volunteers 
provided the USDA Natural Resources Conservation Service with 530,854 
hours of service.
    Earth Team Volunteers worked closely with field professionals in 
applying conservation by assisting with the layout, survey and design 
of conservation practices.
    Volunteers provided a full range of office support. They answered 
phones, typed letters, made copies and sent faxes, thus freeing up 
technical staff to assist farmers and ranchers in the field.
    Volunteers also worked with schools, community groups, and 
individuals; planted trees, cleaned up after floods and other natural 
disasters; and worked side-by-side with NRCS employees.
    For example, during National Volunteer Week, nearly 800 Earth Team 
Volunteers from across the country provided conservation education to 
140,000 students.
    In Indiana, a cadre of three handicapped Earth Team Volunteers 
assisted not only NRCS, but also Farm Service Agency and Rural 
Development employees. These volunteers stuffed 4,000 envelopes for a 
mailing from the Farm Service Agency Office.
                          usda service centers
    Mr. Skeen. What changes to the original USDA Service Center plan 
have been made as a result of the 37 focus groups that were conducted 
from December 1995 through February 1996?
    Response. Results from the 37 focus groups have not changed the 
original USDA Service Center Plan streamlining and reorganization 
activities. However, these results have made a significant impact on 
service center customer service by ensuring all employees who work 
directly with the public are familiar with the customer service 
standards, and are able to provide a responsive feedback, and common 
complaint system to customers. Customer service standards include 
fewer, simpler regulations and forms; local, accessible, knowledgeable 
staff; flexible programs, so local staff have authority to make 
decisions based on local conditions and common sense; timely programs, 
information, and service; follow through and privacy. Also, the results 
from the 37 focus groups will be incorporated into the Business Process 
Reengineering efforts and other processes.
    Mr. Skeen. What impact, if any, has the new farm bill had on the 
field office consolidation efforts?
    Response. The new farm bill has not impacted the field office 
consolidation efforts.
                      status of osage county pilot
    Mr. Skeen. What is the status of the Osage County Pilot?
    Response. Osage County continues to play an important role in 
defining common geospatial information system--GIS--technology within 
the USDA service center environment. The office provides guidance in 
identifying operational business driven functional requirements 
including user interface, data management--spatial and attribute, data 
capture, data manipulation, data analysis, and data display/product 
generation.
    No money was appropriated for pilot office activities in Osage 
County in fiscal year 1997. However, support continues for existing 
activities within the Osage County field office. These activities 
include: GIS based acreage reporting application; GIS conservation 
planning application; GIS support for CRP eligibility determinations; 
and 35mm aerial compliance slide application.
    Osage County staff are actively participating in the Service Center 
Business Process Reengineering--BPR--effort for GIS services. Office 
staff are assisting in identifying current field applications and how 
these are currently accomplished without using GIS. They then define 
how these applications would be accomplished using GIS technologies. 
Time studies are underway to estimate the costs and benefits of using 
GIS. From this effort, specific field office applications will be 
defined that have high potential for reengineering utilizing geospatial 
processing technologies.
    Osage County has also been established as the first multi-agency--
Federal-State-Local--digitizing center in Kansas. The primary purpose 
of the digitizing centers is to digitize all the land units--i.e., 
farm/field boundaries--for Kansas.
                    number of field service centers
    Mr. Skeen. The Farm Service Agency is planning to close and 
consolidate the number of its field offices to 2,500 and is looking at 
the possibility of reducing the number even further. Your agency is 
still operating in about 3,000 field offices. What are your plans to 
close and consolidate field offices and reduce this number?
    Response. NRCS is consolidating 686 field offices in order to reach 
2,469 service centers by end of fiscal year 1997.
    Mr. Skeen. What are the costs associated with relocating NRCS 
operations to the Service Centers? Provide a breakout of these costs by 
fiscal year.
    Response. NRCS has not tracked the costs for USDA Service Center 
implementation agency-wide. However, the database on service centers 
will be enhanced to capture this information.
    Mr. Skeen. Provide a five year table, including fiscal year 1997, 
that shows the number of headquarters and state office staff levels.
    [The information follows:]

                                                 STAFFING LEVELS                                                
----------------------------------------------------------------------------------------------------------------
                                                                       1997     1996     1995     1994     1993 
----------------------------------------------------------------------------------------------------------------
NHQ................................................................      334      392      502      536      530
SO.................................................................    1,880    1,982    2,408    2,873    2,983
----------------------------------------------------------------------------------------------------------------

              geographic information system pilot offices
    Mr. Skeen. What are the results of pilot projects conducted at the 
county level to validate the practicality and assess the benefits of 
using computerized databases?
    Response. We interpreted this question to mean the geographic 
information system--GIS--pilot offices in three county office 
locations. These pilots are located in Rockingham County, Virginia; 
Osage County, Kansas; and Morgan County, Colorado. All three have been 
providing new services and products to our customers using digital 
orthophotography, digital soil surveys and GIS software. The new 
computerized databases and GIS software are used to carry out business 
practices such as managing land unit boundaries and related land 
information, maintaining customer records, administering conservation 
programs, providing conservation technical assistance, and producing 
high quality and more accurate map products and information at the 
local office. All three offices have proven that the use of GIS 
technology improves business efficiencies at the field service centers 
and increases customer satisfaction as well. The NRCS and Farm Service 
Agency are presently evaluating the costs and benefits of GIS 
technology in more detail as part of a Business Process Reengineering--
BPR--study. The team is due to have a complete report to the Department 
by the end of this fiscal year.
               geographic information system 1997 earmark
    Mr. Skeen. Provide a specific breakout of how the $10 million 
provided in the fiscal year 1997 appropriations is being used.
    Response. This funding is being used to procure orthophotography 
and to digitize soil surveys needed to implement GIS capability at the 
USDA Field Service Centers. Approximately $2.5 million was matched with 
an equivalent amount each from USGS, FSA, and State Agencies to procure 
$10,000,000 worth of orthophotography--about 9800 quads--for the USDA 
Field Service Center's GIS systems and for use in digitizing soil 
surveys.
    The remaining $7.5 million was distributed to the 6 NRCS regions 
for use in digitizing soil surveys.
     evaluation of conservation operations and watersheds programs
    Mr. Skeen. During fiscal year 1994, NRCS conducted an evaluation of 
conservation operations and watersheds programs to account for use of 
time, appropriations, and costs with respect to ecosystem based 
products. You anticipated having initial reports from these evaluations 
in March 1995 with final results in March 1996. At least year's hearing 
you were in the process of finalizing analysis and preparing reports 
from the evaluation. What were the results?
    Response. The results and analysis from the evaluation study have 
been completed. Publication of the report has been delayed however due 
to three high priority agency initiatives: the preparation of the GPRA 
National Strategic Plan; the development of the Geography of Hope--a 
report on America's Private Land, and; the analysis of the impacts of 
the 1996 farm bill on NRCS workload and services.
    The results and analysis from the evaluation study provided 
significant input to the preparation of these documents. Baseline data, 
workload estimates, and development of the agency's strategic 
initiatives were largely provided through the data from the evaluation 
study. The agency still plans to complete a report for the evaluation 
study in the fall of 1997. Notable results from the analysis already 
reveal that environmental and ecological benefits are greater on 
acreage's where NRCS has provided technical assistance than on 
acreage's where no technical assistance has been provided.
                 information and educational activities
    Mr. Skeen. In fiscal year 1996, $300,000 was transferred to the 
Cooperative State Research, Education, and Extension Service from the 
Colorado River Basin Salinity Control Program for information and 
educational activities. Now that CRBSCP is part of EQIP are any funds 
being transferred in fiscal year 1997 for these activities?
    Response. Under direction of the State Conservationist with advice 
from the State Technical Committee, and concurrence from the Farm 
Service Agency State Committee, funds may be identified for information 
and educational activities in FY 1997 for salinity projects that 
receive EQIP funding. As of this time, no funds have been transferred 
for these activities.
   technical assistance for ongoing activities of the crbsc and gpc 
                                programs
    Mr. Skeen. In the testimony you state that during 1998, the NRCS 
will continue to provide technical assistance on prior year projects as 
needed for CRBSC programs and ongoing activities of the GPC program. 
Please elaborate on this in further detail including funding amounts 
and where this funding comes from--whether its discretionary or CCC 
funding.
    Response. As of September 30, 1996, there were in excess of 7,000 
active contracts between the CRBSC and GPC programs that will require 
technical assistance for implementation and completion. Technical 
assistance funding for these contracts will be provided through the 
discretionary Conservation Technical Assistance program activity that 
is funded with discretionary appropriations. Currently, no decisions on 
actual funding amounts have been made for fiscal year 1997.
   criteria for environmental quality incentives program allocations
    Mr. Skeen. What criteria was used to decided EQIP allocations? 
Provide a list of the criteria used for the record.
    Response. Upon receipt of the EQIP funding proposals from the state 
conservationists, we asked for recommendations from the regional 
conservationist to determine if the proposals were consistent with the 
regional strategic plans. A national-level interagency team was also 
used to review and rate the proposals to: determine which proposals 
meet the basic program guidance; and determine which proposals are 
likely to be most effective at meeting the program goals and maximize 
the environmental benefits per dollar spent.
    A natural resource-based allocation formula was developed so the 
allocation of funds could be based on conservation needs--a copy of 
which is provided. Because EQIP will address a wide range or natural 
resource conditions, such as soil erosion and deposition, water quality 
and quantity, wildlife habitat, wetlands, grazing lands, and other 
concerns, the formula contains 26 elements that relate to these various 
natural resource concerns. EQIP must also target 50 percent of the 
funds to natural resource concerns related to livestock production, so 
several of the formula elements relate to livestock concerns. This 
formula is used to determine the basic percentage of the EQIP funds 
that each state should receive.
    The basic amount determined by the formula was adjusted so that no 
state would receive a dramatic increase or decrease in conservation 
assistance funds which might negatively impact their ability to manage 
or deliver the program.
    Regional conservationists' and interagency team recommendations 
were also used to determine how a portion of the funds should be 
allocated. Some funding decisions based on their recommendations 
includes the following:
          Establish an incentive reward for states that have developed 
        their program in a way that will result in maximizing the 
        environmental benefits per dollar spent in an exceptional 
        manner. About $10 million is being used for these rewards. The 
        interagency team ratings of the proposals is being used to 
        determine which states receive an incentive reward. This type 
        bonus will, naturally, be to the benefit of farmers and 
        ranchers, but will at the same time encourage our partners and 
        employees to excel in their assessments, stakeholder outreach, 
        and planning efforts.
          Provide a minimum of 65 percent of the funds to priority 
        areas and up to 35 percent to the statewide concerns. This 
        division will ensure that natural resource needs outside 
        priority areas will not be ignored or allowed to worsen.
          Authorize state conservationists to make decisions as to how 
        the moneys allocated to their states will be distributed to 
        their priority areas and statewide concerns, in consultation 
        with the state technical committee and with the concurrence of 
        the FSA state committee. These decisions include the amount of 
        funds to be spent on financial assistance and educational 
        assistance in priority areas and statewide concerns which meet 
        program guidance. A modest reserve has been established to be 
        used to meet special environmental needs that are currently 
        unforeseen.
          Other aspects of the allocation process are to enable the 
        Department to address the special environmental needs of Indian 
        tribes, Alaskan natives, and others who have not historically 
        participated in the former conservation program, $5 million 
        will be used to fund priority areas that meet the program 
        guidance on eligible tribal lands.
    We are initiating the determination of funds to be allocated to the 
states. The amounts are approved by me with the concurrence of FSA 
Administrator Buntrock. The amounts are close to the final amounts for 
the financial and educational assistance. They do not include the 
technical assistance funds which will be distributed with the final 
allocations. The final amounts will be determined after we process the 
final needs as presented by the states.
    This information is being distributed now so that state 
conservationists can make the funding decisions as indicated above. The 
state funding decisions will be shared with the national office about 
April 7th. We will review them to ensure that on the national level 50 
percent of the funds are targeted to natural resource concerns related 
to livestock production. This process was done in this fashion in order 
to expeditiously move the process along. Future funding allocations 
will be done differently as the locally-led conservation priority area 
needs assessment and recommendations process matures. The final 
allocations will then be made when the final rule is published.
    [The information follows:]

[Page 620--The official Committee record contains additional material here.]


                   criteria for state priority areas

    Mr. Skeen. For the record provide a detailed list of the criteria 
used to determine State priority areas and the objective rating systems 
based on 26 national environmental factors used to determine State 
funding allocations.
    Response. The proposed regulations specified in 7 CFR part 1466 
state that State conservationists will make decisions to approve 
priority areas based on proposals, in consultation with a State 
technical committee and the recommendations of a local work group. The 
rule proposed that they shall consider the following factors in 
determining the significance of the natural resource concerns 
identified in the proposal: soil types and characteristics; terrain and 
topographic features; climatic conditions; flood hazards; saline 
characteristics of land or water; environmental sensitivity of the 
land, such as wetlands and riparian areas; quality and intended use of 
the land; quality and intended use of the receiving waters, including 
fishery habitat and source of drinking water supply; wildlife and 
wildlife habitat quality and quantity; other natural hazards or other 
factors, including the existing agricultural management practices of 
the producers in the area or pest problems which may threaten natural 
resources; and the conservation practices that best address these 
factors. The regulation also provides that NRCS will consider the 
following factors in its allocation of funds: condition of the natural 
resources; significance of the natural resource concerns; improvements 
that NRCS expects will result from implementation of the conservation 
plan; expected number of producers who will participate and the time 
and financial commitment that the producers will provide; estimated 
program cost to provide technical, educational, and financial 
assistance; level of coordination with and support from existing State 
and local programs, including private sources, and both direct and in-
kind contributions; ways the program can best assist produces in 
complying with Federal, state, and tribal environmental laws, 
quantified where possible; and other factors that will result in 
maximization of environmental benefits.
    We provided further guidance to State conservationists for fiscal 
year 1997. The guidelines provide that a priority area should be of a 
size where significant progress toward meeting the natural resource 
goals can be expected within a reasonable timeframe. The natural 
resource goals must be clearly articulated. The State Conservationists 
should determine an amount of funding that can reasonably be expended 
in a 3- to 5-year timeframe when determining priority area goals, 
objectives, scope, and size. The extent to which EQIP funding assists 
participants to address Federal, Tribal, State, and local environmental 
laws should be a factor in setting priorities. Locations where EQIP 
will be delivered must clearly be identified as having serious threats 
to soil, water, and related natural resources or have significant 
natural resource and environmental concerns. The agricultural 
contribution to these threats or concerns must be evident, as well as a 
current unmet need for conservation of the natural resources. The 
solutions to the threats or concerns should be currently acceptable and 
feasible. The expected producer participation rates should be high 
enough to significantly address the identified natural resource 
concerns within the 3 to 5-year timeframe. Outreach opportunities to 
limited resource producers, small-scale producers, minorities, Indian 
Tribes, Alaska natives, Pacific Islanders, and other producers with 
historically low participation rates must be identified and appropriate 
actions planned and carried out to address those needs. Educational 
needs of producers who are expected to participate in the 
program,especially limited resource producers and others with 
historically low participation rates, must be identified and 
appropriate actions planned and carried out to address those needs. 
Refer to the EQIP Allocation Formula Elements table to see the 26 
national environmental factors used to determine State funding 
allocations.
                    breakout of 1996 eqip allocation
    Mr. Skeen. Provide a breakout of how the $130 million was allocated 
in 1996.
    [The information follows:]

[Page 622--The official Committee record contains additional material here.]


                         administration of eqip

    Mr. Skeen. Except for the 50 percent livestock requirement, how is 
EQIP administered any differently from administering the four programs 
separately?
    Response. There are several ways that administration of EQIP 
differs from that of the Agriculture Conservation Program, Great Plains 
Conservation Program, Agriculture Water Quality Incentive Program, and 
the Colorado River Basin Salinity Control Program.
    First, EQIP will be delivered primarily in priority areas which are 
watersheds, areas or regions of special environmental sensitivity or 
having significant soil, water, or related natural resource concerns. 
Focusing the program in these priority areas will help USDA with 
maximizing the overall environmental benefits per dollar spent because 
the most significant concerns and problems will be located in these 
geographic areas. Farmers and ranchers located in these priority areas 
may be eligible for program assistance. Producers who agree to address 
the primary concerns in the priority area will be given preference for 
an EQIP contract. Producers who desire to address concerns of a 
secondary nature, and not the primary concerns of the priority area, 
will be eligible but their application will rank lower than those who 
will address the primary concerns. While the 1997 funding allocations 
process will provide a formula based on background conditions and not 
largely based on the CPAs themselves, this will not be the case in 
future years, particularly as the locally-led process is developed.
    We recognize that environmental problems and natural resource 
concerns may also occur more randomly throughout a State or region, and 
the program will be available to farmers and ranchers with these 
concerns. We call these significant statewide natural resource 
concerns.
    Second, EQIP will be implemented using the locally-led conservation 
process in future years.
    The locally-led conservation effort consists of a series of phases 
which involve community stakeholders in natural resource planning, 
implementation of solutions and evaluation of results. Locally led 
conservation begins with the community itself. It is based on the 
principle that community stakeholders are best suited to deal with 
local resource problems.
    In addition, EQIP will be administered by team USDA, utilizing the 
strengths of each agency in the assignments of roles and 
responsibilities.NRCS will, with concurrence of FSA, be responsible for 
policy development, allocation and obligation of funds, and providing 
technical assistance. The FSA will have primary responsibility for 
administrative functions such as enrolling applicants, administration 
and approval of contracts, issuance of payments to participants, 
administration of payment limitations and person determinations, and 
record keeping. Conservation districts and FSA county committees will 
each have a role in the local implementation of the programs. The State 
Technical Committee, which includes membership of a member of the FSA 
State Committee, will offer advice on establishing criteria and 
priorities at the State level.
                      local implementation of eqip
    Mr. Skeen. Under EQIP the conservation districts and FSA county 
committees share responsibility for local implementation. How is this 
arrangement working in the field?
    Response. Conservation districts and FSA county committees are 
actively carrying out their roles and responsibilities under the 
arrangements outlined in the EQIP operating procedures. Their 
respective roles build on each entities strengths resulting in an 
efficient and effective delivery of EQIP that recognizes the importance 
of local input.
           technical assistance level needed to carryout eqip
    Mr. Skeen. What is the total technical assistance level needed to 
carryout a $200 million EQIP program?
    Response. NRCS estimates it could use $38 million in 1997 to 
provide technical assistance. The technical assistance needs will 
probably increase in subsequent years. We expect higher technical 
assistance needs in future years because: first, EQIP contracts are 5 
to 10 year contracts--there will be engineering, design, oversight, and 
follow-up activities by NRCS in each of the years of the contract; 
also, many of the EQIP contracts will have structural practices, such 
as animal waste facilities, waterways, terraces, etc., which will 
require significant time commitment from NRCS engineers and technicians 
for the design, building, and follow-up.
                 status of the urban resources program
    Mr. Skeen. Update the Committee on the status of the Urban 
Resources Program. Provide some examples of its successes.
    Response. With the help of the local community, each of these 
cities has established a steering committee that includes federal and 
state agencies, not-for-profit organizations, local businesses and 
foundations. The steering committee establishes the local partnership's 
mission, investigates natural resources and community needs, and 
determines priorities. Based on this information, a technical team is 
assembled from the governmental agencies and not-for-profit partners, 
that work on-site with the community members and their projects.
    Over the program's first two years, a federal government investment 
of $6 million has leveraged an additional $14 million in funding and 
community labor and 26,000 hours of technical assistance provided on a 
total of 310 projects.
    Examples of successes include the Greater Atlanta Community Youth 
Corps members learned the value of teamwork, explored cultural 
diversity and career possibilities, and acquire life skills. Corps 
members learned about the dangers of radon and install mitigation 
systems. They also transform derelict vacant areas into parks and 
gardens and created interpretative trails as part of the Environmental 
Revitalization and Neighborhood Improvement Project.
    The Chicago Urban Resources Partnership integrates the skills of 
participating agencies with those of community residents and 
organizations. Partners work side by side to create habitat for 
wildlife, transform vacant lots into community gardens and plant trees 
to reduce pollution and increase community pride. The Chicago Youth 
Centers Fellowship House began with a community garden and currently is 
working on a river restoration project. The residents of Gompers Park 
and the Chicago Park District teamed up to restore a three-acre 
wetland.
    The Denver Urban Resources Partnership recognizes provided 
assistance in the establishment of an outdoor classroom and garden 
where science teachers bring math, chemistry and earth sciences to 
life. The garden also functions as a public meeting place for citizens 
to work, produce food, meet other families and discuss community 
concerns.
    East St. Louis is the smallest Urban Resources Partnership city, 
with 40,000 residents and 20 neighborhoods actively engaged in 
addressing local concerns. The East St. Louis Urban Resources 
Partnership supports them by working with neighborhood groups to 
restore parks and boulevards, create outdoor science laboratories on 
school grounds, and study watershed management. The partnership also 
funds environmental advocacy and awareness projects that produce videos 
and other educational materials.
    Partnering with schools, nonprofit organizations and community 
groups, the Los Angeles Urban Resources Partnership addresses locally 
identified natural resource issues. One of the many projects targeting 
undeserved areas, the Friends of Castle Heights Elementary School 
involves students, parents and local residents in beautifying and 
greening neglected school grounds. Other groups such as L.A. Harvest 
and the El Sereno Youth Development Corporation employ youth to plant 
trees, clear trash and remove graffiti, while teaching them community 
outreach skills and conservation.
    The New York City Urban Resources Partnership galvanizes 
intergovernmental cooperation and community action by supporting the 
revitalization efforts of three Community Development Corporations in 
the South Bronx. At the West Farms Bronx River Clean-Up Day, 
neighborhood youth, corporate and community volunteers transformed a 
vacant lot adjacent to a school into an outdoor learning center with a 
400-foot nature trail and newly planted trees. Youth have created ponds 
on vacant lots adjacent to public schools in Manhattan, Brooklyn and 
the Bronx as part of the URP/NYC Youth Environmental Program. The 
finished ponds provide educational opportunities and a place of beauty 
for the neighborhood.
    By first recruiting local nonprofit partners, the Philadelphia 
Urban Resources Partnership quickly established itself as a resource 
for community assistance. Citizens responded in force, identifying a 
broad range of urban natural resource problems: trash-filled lots, 
deteriorated parks and recreation facilities, barren school campuses, 
ailing street trees, stressed forested stream corridors and the need 
for more environmental education. Projects chosen, such as the citizen-
initiated reforestation of the Wissahickon Valley and the expansion of 
a community garden for the disabled allow established organizations to 
build new partnerships. Other groups are working with the Philadelphia 
Urban Resources Partnership to expand their missions to include natural 
resource issues.
    The Puget Sound Urban Resources Partnership provides opportunities 
for children, youth and residents from diverse cultures and 
neighborhoods to connect urban and environmental issues and to share 
responsibility for solutions. Community gardens in four low-income 
housing projects provide residents with fresh food and places of 
beauty. Local and international youth worked together on an urban 
stream enhancement project.
              financial support of urban resources program
    Mr. Skeen. Provide a table that shows the amount spent on this 
program for both financial support and technical assistance since its 
inception. Also include the amount that has been contributed by other 
entities.
    [The information follows:]

[Page 626--The official Committee record contains additional material here.]


           metropolitan locations of urban resources program
    Mr. Skeen. List the eight major metropolitan cities in the program 
and how much each receive.
    Response. The eight cities that receive funding are Atlanta, 
Chicago, Denver, East St. Louis, Los Angeles, New York, Philadelphia, 
and Seattle. The Urban Resources Partnership cities receive $250,000 in 
funding from the Natural Resources Conservation Service, National 
Headquarters, in fiscal year 1996.
                cropland managed to enhance soil quality
    Mr. Skeen. What is the current percentage of cropland that is 
managed with conservation systems to enhance soil quality?
    Response. We are currently working to identify appropriate 
baselines to measure the progress toward the performance goals in the 
draft NRCS GPRA Strategic Plan. In some cases, as with soil quality, 
baselines will need to be constructed. We are identifying those 
management practices that enhance soil quality to determine number of 
acres that already exist, and we are putting in place the tracking 
system to follow the progress.
                        water resources outcomes
    Mr. Skeen. Under the water resources outcomes you use different 
years as your baseline to measure results of two of the goals. How do 
you decide what to use as your starting point? What criteria do you use 
to establish this?
    Response. The baselines used in the NRCS GPRA Strategic Plan are 
derived from various data sets collected and used by the agency. 
Criteria used in the establishment of any one data base is specific to 
that data base and is decided by the intended need and use of the data. 
A data set may collect a particular attribute in one year and not 
measure that attribute again for a pre-determined period. Therefore, 
the year associated with a baseline value is particular to that data 
base and specified attribute.
                   fish and wildlife habitat outcome
    Mr. Skeen. A goal under the fish and wildlife habitat outcome is to 
convert 15 to 20 million acres of cropland and/or pastureland to native 
prairie vegetation in the Midwest and Great Plains. Is this a goal to 
be reached only through administering Federal conservation programs? Is 
achieving this goal dependent on receiving a certain level of 
appropriated funds?
    Response. The NRCS' draft performance goal to achieve high quality 
habitat on private land supporting the Nation's wild life heritage is 
to convert 20 million acres of cropland or pastureland to native 
grassland vegetation by the year 2002. It is anticipated that it will 
require a number of Federal conservation programs, in partnership with 
state, local and nonprofit organization programs and incentives, and 
the private sector interest to achieve this goal. The USDA conservation 
programs important to achieving this goal include, but are not limited 
to, Conservation Reserve, Grazing Land Conservation, Environmental 
Quality Incentive, and Wildlife Habitat Incentive.All of these programs 
meet other needs as well and it is anticipated that no one program or 
one arm of government will do it all. The underlying assumptions to 
meet any of the performance goals stated in the Strategic Plan are that 
resources available to NRCS from FY 1998 through FY 2002 will be at the 
level outlined in the FY 1998 budget estimate.
              gpra pilot projects for performance measures
    Mr. Skeen. Both the soil survey program and the snow survey and 
water supply forecast program were selected as GPRA pilot projects for 
performance measurements. Describe this initiative in further detail 
and tell the Committee what the outcome of the pilots were.
    Response. The Soil Survey program and the Snow Survey and Water 
Supply Forecasting program were approved as pilot projects in 
performance measurement for fiscal years 1994 through 1996. We proposed 
these programs as pilots because they were examples of programs that 
were well positioned to comply with the intent of GPRA. Both of these 
programs have very specific and well-defined missions. Both had in 
place, and had long experience in using, procedures and systems for 
measuring and reporting program activity in terms of outputs. When we 
proposed them as pilots, both programs had already begun program-level 
strategic planning exercises based on the agency's ``Strategic 
Initiatives for the 1990's'' plan.
    Our experience with the Soil Survey pilot strategic planning 
exercise demonstrates the value of strategic planning in bringing about 
significant change in program operations and effectiveness. As a result 
of strategic thinking about our customers' needs and the opportunities 
for improved services presented by new technologies, we reorganized the 
program to conduct soil surveys on a geographic basis rather than 
political boundaries. This has increased the efficiency of operations 
and facilitates development of higher quality soil information. We have 
shifted priorities for program activities to focus somewhat less 
attention on collecting soil information and greater attention on 
making the information available to users. To support that change in 
emphasis, the program is developing additional performance measures to 
supplement the traditional measures of acres mapped.
    The Snow Survey and Water Forecasting collects and delivers time-
sensitive information primarily to a specific audience of public and 
private sector water resource managers for immediate use. As part of 
its pilot activity, the program managers identified and made use of a 
set of performance measures that include both the output measures they 
had collected, such as number of reports issued, and new measures that 
focused on the usefulness of the information of the report. The new 
measures were developed by adopting a customer-focused approach. 
Program managers identified key concerns of their customers, developed 
a customer satisfaction survey form, and initiated a process for 
collecting customer satisfaction information. The agency has appointed 
a team to develop a customer-feedback system for all programs.
    For both of our pilots, part of the attraction of serving as a 
pilot was the opportunity to follow-up on the performance measurement 
by participating in the second round of pilots for managerial 
flexibility. Since this second round was not supported, the greater 
efficiencies that the programs hoped to achieve by participating in the 
pilot activity were not realized.
               snow survey and water forecasting program
    Mr. Skeen. I know the purpose of the snow survey and water forecast 
program is to provide western states and Alaska with information on 
future water supplies, but do you do any surveys in the eastern part of 
the country?
    Response. No, there are no surveys in the eastern part of the 
country.
                   water bank acreage enrolled in crp
    Mr. Skeen. Water Bank program acreage in their last year of the 
contract becomes eligible for CRP. How many water bank acres have been 
enrolled in the CRP?
    Response. None to date. Only certain Water Bank--WB--program 
acreage is eligible under the 15th CRP sign-up, which started March 3rd 
and ends on March 28th. We should have information on the number of WB 
acres in CRP by mid June.
    Mr. Skeen. Do these acres have to compete with other offers? Are 
they required to comply with established criteria?
    Response. The Water Bank Contract offers will have to successfully 
compete in order to achieve enrollment into the CRP. Those Water Bank 
contracts that expired on December 31, 1997 and any that will expire 
this year are potentially eligible for enrollment in the current CRP 
opportunity. These lands are being considered under the marginal 
pastureland eligibility criteria. Within individual Water Bank 
Contracts those areas that are naturally occurring wetlands of Type 3 
through 7 will not be eligible for CRP enrollment.
    Mr. Skeen. Are expiring water bank contract acres eligible to 
participate in both CRP and WRP?
    Response. Yes, water bank contract acres are eligible to 
participate in both programs. However, the landowner can seek to enroll 
in either program, but cannot be enrolled in both.
                      expiring water bank acreage
    Mr. Skeen. Provide a table that shows a breakout, by year, of the 
number of expiring acres in the water bank program.
    [The information follows:]

                        EXPIRING WATER BANK ACRES

Year in which acres expire:                              Number of acres
    1997......................................................  63,520.7
    1998......................................................  61,697.8
    1999......................................................  74,590.5
    2000......................................................  86,430.4
    2001...................................................... 113,716.1
    2002...................................................... 125,719.1
    2003......................................................  69,571.3
    2004......................................................  52,369.1
                  wildlife habitat incentives program
    Mr. Skeen. A total of $50 million is available for the wildlife 
habitat incentives program. How much has been spent to date on this 
program? What are your plans for fiscal year 1998?
    Response. No funds have been spent at this point in time. We are 
presently developing the final rules to implement the program based 
upon public comment on the proposed rule. We will obligate funds for 
cost-share practices when the rule is finalized sometime this spring. 
We requested $20 million to be made available to NRCS in 1997 and are 
in the process of determining how to best allocate those funds.
    There are two important reasons for requesting the flexibility to 
utilize much of the WHIP funds early in the implementation of the Farm 
Bill. First, $20 to $30 million provides NRCS with sufficient funds to 
run a national program with the potential to attract partnerships and 
leverage other wildlife dollars from states, nonprofits, and private 
organizations throughout the country. The development of wildlife 
partnerships can increase the resources provided to the voluntary 
participants in WHIP in the form of funding and/or wildlife habitat 
expertise. The second reason for requesting the funding early in the 
life of the Farm Bill is that it may take several years for wildlife 
habitat improvements to occur on the landscape after cost-share 
practices are implemented. Putting the maximum number of agreements 
possible in place over the next two years allows participants and the 
general public to benefit from the establishment of wildlife habitat 
throughout the life of the 1996 Farm Bill.
    Mr. Skeen. How is this funding allocated to the states? Provide a 
breakout, by state, for fiscal year 1997.
    Response. WHIP funds are allocated to the NRCS States offices based 
on a competitive process. The first week of March States and 
Territories were required to submit applications for 1997 WHIP funds. 
They were asked to identify wildlife objectives and priorities, 
identify partnerships, technical information and budget needs for 
implementing the program in fiscal year 1997. All states and the 
Caribbean submitted proposals. Over $35 million was requested. NRCS is 
evaluating those proposals to determine how to allocate funds. State by 
state funding allocations have not been made at this time, but will be 
forwarded when they are completed.
                    conservation farm option program
    Mr. Skeen. Authorized funding for the conservation farm option 
program increases from $7.5 million in fiscal year 1997 to $62.5 
million in fiscal year 2002. Provide a breakout, by fiscal year, of the 
incremental funding levels.
    Response. Authorized funding for the conservation farm option 
program by fiscal year is: fiscal year 1997 $7.5 million, fiscal year 
1998 $15 million, fiscal year 1999 $25 million, fiscal year 2000 $37.5 
million, fiscal year 2001 $50 million, fiscal year 2002 $62.5 million. 
The 1997 appropriations bill limited spending under CFO to $2.0 
million.
    Mr. Skeen. How many contracts do you plan to enter into in fiscal 
year 1997? How many acres will be covered by these contracts? What is 
the average cost per contract?
    Response. We estimate that between 40 and 60 contracts will be 
executed in fiscal year 1997. We estimate that between 20,000 and 
30,000 acres will be covered by these contracts. The average cost per 
contract is estimated to be $50,000.
    Mr. Skeen. Provide a table that shows a breakout of these contracts 
by state and type of producers.
    Response. This information is not available at this time. Proposals 
for participation in the fiscal year 1997 program have not yet been 
received. However, an effort will be made to distribute the program 
funding geographically as well as among the producers of wheat, feed 
grains, cotton and rice.
    Mr. Skeen. Provide a list of the states where the conservation farm 
option program will be limited to.
    Response. The conservation farm option program will be available in 
all states where producers grow rice, upland cotton, feed grains, and 
corn. However, it is unlikely that contracts will be executed in every 
state, at least in the first few years, because of funding limitations.
    outreach for socially disadvantaged farmers and ranchers program
    Mr. Skeen. Through the outreach for socially disadvantaged farmers 
and ranchers program, agreements are entered into with community based 
organizations and educational institutions to provide outreach and 
technical assistance. What are some of the community based 
organizations that you have agreements with?
    Response. Some of the organizations we have agreements with are the 
Hermandad Mexicana Nacional, the American Indian Opportunities 
Industrialization, Federation of Southern Cooperatives/Land Assistance 
Fund, and the Arkansas Land and Farm Development Corporation.
    Mr. Skeen. Provide some examples how these groups provide this 
assistance.
    Response. The overall goal of the program is to increase the number 
of minority farmers and directly improve the farm income of small and 
minority farmers indebted to USDA through better management and 
financial analysis. These groups provide intensive training and 
management assistance both one-on-one and group training to small 
farmers, or ranchers, particularly minority farmers or ranchers in 
selected states. Each program participant is visited one to three times 
a month by the grant recipient's farm management specialist or advisors 
having expertise in farm management and production. The instruction and 
technical assistance provided include individualized custom farm plans, 
production and marketing practices, farm accounting and record keeping. 
The overall objective of this program is to enhance the ability of 
small and minority producers to operate a farming or ranching 
enterprise independently and produce income adequate to service debts, 
maintain farm operations, and provide a reasonable standard of living.
    Mr. Skeen. Provide an example of the training and management 
assistance that is provided to farmers and ranchers through the 
outreach program.
    Response. Training and technical assistance are in the form of one-
on-one visits, town meetings and printed materials such as: record 
keeping; management of income and utilization of credit; management of 
resources and production practices emphasizing diversification, 
cultural and traditional issues, harvesting, storage, and marketing, 
among others: preparation of cash flow budgets and/or farm plans; and 
marketing of agricultural products and training on the use of generally 
accepted marketing tools and techniques.
    Mr. Skeen. How many participants were served in the program in 
fiscal years 1995 and1996? How many do you estimate serving in fiscal 
year 1997?
    Response. The grant recipients provide technical assistance to over 
7,963 borrowers and non-borrowers in 394 counties in 23 states across 
the United States. Through combined outreach effort's service is 
provided to 52,563 farmers and ranchers.
    We estimate servicing 8,600 participants in Fiscal Year 1997, with 
the addition of two entities in California providing service to the 
Asian and Hispanic farming community.
    Mr. Skeen. Provide a list of the 28 entities that participate in 
the program.
    [The information follows:]

[Page 631--The official Committee record contains additional material here.]


              performance measures and budget assumptions

    Mr. Skeen. All of your performance measures and indicators are 
based on budget assumptions. What if you don't receive your budget 
request, do you just adjust your indicators to fit the appropriation 
level?
    Response. The NRCS draft GPRA Strategic Plan set objectives and 
performance goals based on two assumptions: first, that resources 
available to NRCS from FY 1998 through FY 2002 will be at the level in 
the FY 1998 budget estimate.
    The performance goals in the Strategic Plan are the direct link to 
the annual Performance Plan. Performance measures in the Performance 
Plan are the annual increment of measure to evaluate the progress 
toward the performance goals and general goals in the Strategic Plan. 
Changes in the budget will be reflected in adjustments to the annual 
performance measures. The level of conservation we would expect to 
achieve will change with budgets differing from the assumptions. If the 
budget assumptions made in the strategic plan are law, we would expect 
to achieve a higher level of conservation for performance measures. And 
conversely, if the budget assumptions are high, we would expect to 
achieve a lower level of conservation.
    The Strategic Plan will be reviewed in three years. Progress toward 
meeting the performance goals in the Strategic Plan will be evaluated 
and adjustments or revisions to performance goals will occur based on 
budget realities or budget estimates at that time.
          conservation reserve program funding and staff years
    Mr. Skeen. Please explain why you project a decrease in the 
reimbursement for CRP from $78.2 million in fiscal year 1997 to $35.4 
million in fiscal year 1998 while at the same time you project staff 
years to increase from 774 to 923.
    Response. The decrease in reimbursement for CRP from fiscal year 
1997 to fiscal year 1998 is based on the anticipated number of bids and 
enrollments in the program for these years. NRCS is reimbursed by the 
Farm Services Agency for the technical assistance costs to enroll the 
land when the bids are made and accepted. However, the technical 
assistance is provided over a two or three year period to allow for 
determinations of eligibility, development of conservation plans, and 
implementation of those plans as necessary to fulfill the conditions of 
program enrollment. The staff years for fiscal year 1998 increases 
because they include the staff years for planning and application 
assistance for both fiscal year 1997 and 1998 enrollments.
           reimbursement for foreign details and assignments
    Mr. Skeen. Why do you anticipate reimbursements from FAS for 
foreign details and assignments to increase from $84,079 in fiscal year 
1996 to $361,200 in fiscal year 1997?
    Response. At the time the budget was prepared NRCS anticipated an 
increase in long term resident assignments, however, this has failed to 
materialize and we now anticipate reimbursements from FAS to be no 
higher than the amount received in fiscal year 1996.
                rural abandoned mine program allocations
    Mr. Skeen. Allocations from the rural abandoned mine program are 
projected to go from -$76,349 in fiscal year 1996 to $204,578 in fiscal 
year 1997. What is the negative value in fiscal year 1996 and why the 
large increase?
    Response. The negative value in 1996 reflects a net deobligation of 
contracts made in prior years that have been revised and the number 
shown for fiscal year 1997 is merely a reflection of unobligated 
dollars carried forward from prior fiscal years that will be used to 
continue ongoing work.
            sub-object class breakout for object class 25.2
    Mr. Skeen. Provide a sub-object class breakout for object class 
25.2 other services for fiscal year 1996, 1997, and 1998.
    [The information follows.]

[Page 633--The official Committee record contains additional material here.]


                    advisory and assistance services

    Mr. Skeen. What is the $185,000 in advisory and assistance services 
being used for in fiscal year 1997 and why do you project these costs 
to increase to $402,000 in fiscal year 1998.
    Response. The $185,000 shown under Conservation Operations for 
advisory and assistance in fiscal year 1997 is merely a reflection of 
the authority provided in the language for Conservation Operations and 
Watershed Surveys and Planning for employment under 5 U.S.C. 3109. The 
increase in fiscal year 1998 reflects the request for technical 
assistance funds formerly provided under the Watershed and Flood 
Prevention Operations programs be transferred to the Conservation 
Operations program.
                     construction contract funding
    Mr. Skeen. Why do construction contracts decrease so significantly 
in fiscal year 1998?
    Response. The decrease in construction contracts is related to the 
absence of a request for emergency watershed protection dollars in the 
President's fiscal year 1998 budget.
                      land and structures funding
    Mr. Skeen. What is the reason for the increase of almost $37 
million in land and structures in fiscal year 1998?
    Response. The increase in land and structures reflects the payment 
of easements on acreage committed by landowners in prior years and 
actually obligated under the Wetlands Reserve Program.
                          motor vehicle fleet
    Mr. Skeen. The agency owns 10,357 vehicles. In addition to these, 
626 vehicles are leased through GSA. This equates to more vehicles than 
staff years at the agency. Why do you need more vehicles than staff?
    Response. NRCS Conservation Partners work with us through 
Memorandums of Understanding with the Secretary of Agriculture. NRCS 
provides technical and other tangible assistance to our conservation 
partners. One of the tangible ways in which we assist is to provide 
vehicles. This is most commonly done where Conservation District 
employees are often involved in doing Federal work. NRCS agreements 
regarding the use of these vehicles ensure that the Conservation 
District provide liability insurance safeguarding the Federal 
investment.
    Mr. Skeen. You are proposing to replace 150 passenger vehicles 
during fiscal year 1998. How many pickup trucks, light trucks, jeeps, 
and heavy trucks do you plan to replace in fiscal year 1998? What is 
the total cost to replace all types of vehicles?
    Response. The 150 vehicles planned for replacement in FY 1998 are 
passenger vehicles. NRCS currently owns 1,733 passenger vehicles which 
are deployed through out the United States at offices where it is the 
mosteconomical means of transportation or public transportation does 
not exist. For reasons of safety and liability, it is our policy to 
replace passenger vehicles that are six years old and/or have been 
driven 80,000 miles. Replacement passenger vehicles cost between 
$13,000 and $14,000 each. This planned replacement will total about 
$2,025,000.
    Additionally, we maintain a truck fleet consisting of compact and 
full size pickups, vans, and utility vehicles. Our current truck fleet 
contains 8,624 vehicles. The replacement schedule for the truck fleet 
is eight years old and/or 65,000 miles driven. To maintain a safe fleet 
which meets these replacement standards, we should replace 
approximately 15% of our fleet each year. Truck costs range between 
$15,000 and $18,000 each. To replace 15% of our current truck fleet in 
FY 1998 (1200 vehicles) it will cost approximately $19,800,000.
            training agreements with conservation districts
    Mr. Skeen. Why do you need specific language in the bill to allow 
you enter into agreements with conservation districts and other state 
and local entities for training expenses?
    Response. NRCS does not technically need to have this language 
spelled out in the appropriation because we have enabling legislation 
which allows us to work with our Conservation Partners when we are both 
doing Federal work. Specific language in our appropriation will enhance 
and highlight our partners' position when requesting local funding for 
training efforts which are done jointly. The language allows a broader 
availability for these funds to work with the conservation districts to 
enhance their skills.
               unobligated balance from fiscal year 1996
    Mr. Skeen. Why is there an unobligated balance of $35 million 
carried into fiscal year 1997?
    Response. Of the unobligated balance, $35 million carried into 
fiscal year 1997, $3 million is in Conservation Operations and $32 
million is in Watershed and Flood Prevention, the majority of which is 
for the Emergency Watershed Program.
    Of the $32 million carried over in Watershed and Flood Prevention, 
$22 million is for committed easements in the Midwest. Most of the 
remaining $10 million is for work related to the Pacific Northwest 
floods that requires two years to complete.
                 reimbursement for foreign assignments
    Mr. Skeen. During fiscal year 1996, NRCS completed 204 assignments 
to 46 foreign countries. What was the total cost of these assignments 
and how much were you reimbursed for these costs?
    Response. The costs of the assignments totaled $560,000, of which 
$280,000 was reimbursed to NRCS.
                   usda national agroforestry center
    Mr. Skeen. NRCS, the Forest Service, and the University of Nebraska 
operate a USDA National Agroforestry Center. What is the total cost to 
operate this Center?
    Response. The total budget for the Center is $1.68 million.
    Mr. Skeen. How much is provided by NRCS, how much by the Forest 
Service, and how much by the University?
    Response. NRCS provides $690 thousand, the Forest Service provides 
$940 thousand and U.S. Agency for International Development contributes 
$50 thousand. The University of Nebraska does not provide direct funds 
for operation of the National Agroforestry Center. Land for the Center 
is leased from the University, and the University is a primary 
collaborator on several collective projects.
    Mr. Skeen. Who uses the Center?
    Response. The National Agroforestry Center's primary clients are 
about 60,000 resource professionals with the NRCS, Forest Service, 
State Forestry agencies, Extension Service, conservation districts, and 
other Federal, state, and local agencies and private conservation 
organizations who provide natural resource technical assistance to 
private landowners. The Centers purpose is to accelerate the 
development and application of agroforestry technologies in appropriate 
conservation and production systems and production systems for farms, 
ranches, and communities.
    Mr. Skeen. How many requests for information were made during 
fiscal year 1996?
    Response. Approximately 2,200 requests for information were 
received during fiscal year 1996 which required a verbal or written 
response. However, about two-thirds of the Center's work involves 
proactively addressing information and technology barriers to 
agroforestry. This includes providing technical information bulletins, 
demonstration projects, and workshops to our clients--resource 
professionals.
             international agroforestry technology program
    Mr. Skeen. Describe the International Agroforestry Technology 
Program in further detail.
    Response. A Memorandum of Understanding between the Forest Service 
and NRCS provides opportunities to coordinate existing and new joint 
ventures directed toward the international work of both agencies. 
Within this context, the International Agroforestry Technology Program 
was established at the USDA National Agroforestry Center at the 
University of Nebraska-Lincoln. The Program focuses on the conservation 
of natural resources, environmental enhancement, and supply of natural 
resource products from agroforestry systems to households in both rural 
and urban settings. An International Coordinator facilitates the 
development of international technology exchanges for the mutual 
benefit of the Forest Service and NRCS scientists and practitioners and 
their key cooperators.
    The Program directly impacts USDA's partnership with the U.S. 
Agency for International Development and the results of the overall 
national agroforestry program within USDA. Liaison activities with the 
International Center for Research in Agroforestry, one of the centers 
in the Consultative Group for International Agricultural Research, 
provides access to a network of natural resource professionals engaged 
in agroforestry research and training all over the world.
    The Program provides a means for exchange of knowledge about 
sustainable land use models and technologies viable for limited 
resource farmers, organic practices, or reduced input systems. 
Agroforestry is a science that looks at the interface between 
agriculture and forestry and is pertinent to the way many private land-
owners manage their land. The awareness of traditional practices and 
indigenous knowledge from all over the world can be used to help 
develop more diverse farming systems and help diversify economic 
benefits from private lands. Information on specialty products 
incorporated into diversified systems, such as botanicals and mushroom 
production, can be enriched through international exchange of 
information and expertise. In addition, promotion of food production 
systems that increase food self-sufficiency will help foster political 
stability and facilitate more harmonious international relations.
                           border xxi program
    Mr. Skeen. Describe the Border XXI Program in further detail 
including its cost and a list of all U.S. and Mexican federal agencies 
that participate.
    Response. The Border XXI Program is a binational effort which 
brings together the diverse U.S. and Mexican federal entities 
responsible for the shared border environment, to work cooperatively 
toward fulfilling the mutual goal of sustainable development through 
protection of human health and the environment and proper management of 
natural resources in both countries.
    Unsustainable practices in the border region have resulted in the 
degradation of environmental health conditions. While industrialization 
and growth have brought important economic benefits to the border area, 
they have been accompanied by population growth and development 
practices which place a severe strain on the region's infrastructure, 
environment and natural resources. Currently, these conditions pose 
significant health risks to border residents.
    The central strategy of Border XXI emphasizes public involvement; 
decentralization of environmental decision-making through state and 
local capacity building; and improved communication and cooperation 
among federal, state and local government agencies. Collectively, these 
strategies will lead to regional, community-based or ecosystem-based 
approaches to environmental management, new mechanisms for problem 
solving and environmental decision-making, and more effective targeting 
of limited resources aimed at improving human health and environmental 
conditions in the border area.
    Both governments support and ensure effective coordination of 
bilateral efforts through nine binational, multi-agency Border XXI 
workgroups which correspond to the following subjects: environmental 
information resources, natural resources, water, air, hazardous and 
solid wastes, pollution prevention, contingency planning and emergency 
response, environmental health, and cooperative enforcement.
    The success of Border XXI is contingent upon broad-based, 
binational participation by Federal, state and local governments, 
international institutions, academic, non-government organizations, the 
private sector, and border citizens and communities. State, local, and 
tribal entities have a broad understanding of the particular problems 
and solutions impacting their communities. In Mexico, the six border 
states and principal border municipalities are actively engaged in 
Border XXI. In the U.S., the four border states, as well as counties, 
municipalities, and Indian Nations located in the border region are 
involved in the Program.
    The key federal agencies involved in developing and implementing 
Border XXI include the U.S. Environmental Protection Agency which has 
overall leadership; U.S. Department of Interior; U.S. Department of 
Health and Human Services; U.S. Department of Agriculture, Mexico's 
Secretariat for Environment, Natural Resources and Fisheries; U.S. and 
Mexican Sections of the International Boundary and Water Commission; 
and Mexico's Secretary of Health. Other important federal participants 
include the U.S. Department of State; U.S. National Oceanic and 
Atmospheric Administration; U.S. Agency for International Development; 
U.S. Department of Justice; National Institute for Statistics, 
Geography, and Information; Mexico's Secretariat of Foreign Relations; 
and Mexico's Secretariat of Social Development.
    No funds were expended by NRCS in fiscal year 1996.
             united states and taiwan collaborative program
    Mr. Skeen. I read in the budget justifications where the U.S. and 
Taiwan have agreed to share conservation technology and establish a 
site in the Pacific Basin Area to develop and transfer technology. 
Describe this initiative in further detail including the cost 
contributed by each participating entity and where this site will be 
located.
    Response. The U.S. is participating in a collaborative program with 
Taiwan on conservation technology designed for use on steep slopes. The 
Soil and Water Conservation Bureau in Taiwan has agreed to share the 
technology with NRCS and participate in its installation at the Ija 
Agricultural Experimental Station which is owned by the University of 
Guam. The strength of the activity is the acquisition of special 
technology uniquely designed for application in insular areas--Hawaii, 
Puerto Rico, and islands of the Pacific Basin. The program began in 
1996 and consists of four phases. The entire process will take two 
calendar years.
    During Phase I, six NRCS specialists, a farmer, and a university 
professor from Guam visited Taiwan in August 1996, to see the applied 
slopeland system in place and in functional form. The group viewed 
steep slope farming techniques and conservation practices in order to 
learn the installation techniques for hillside ditches and other 
practices in the slopeland systems. Engineering designs and drawings 
for the proposed steep slope farm demonstration project to be 
constructed on Guam have been completed.
    Phase II of this operation proposes that two specialists from the 
Soil and Water Conservation Bureau in Taiwan visit Guam in May 1997, to 
provideleadership in the layout and installation of the slopeland 
system at the Ija Agricultural Experimental Station. Installation will 
be an on-the-job training exercise for Pacific Basin field people and 
partners from the university and farm groups. The Guam Soil and Water 
Conservation District has agreed to serve as a local sponsor of this 
activity.
    Phase III will be an information and training period. The practice 
will be evaluated and adjusted to meet local requirements, and 
specifications will be developed for use in the Pacific Basin, Phase IV 
will consist of development of training materials to transfer the 
technology to other areas within NRCS.
    Taiwan is willing to share a small part of the cost but most must 
be borne by NRCS. This is appropriate since our agency will be the 
principal beneficiary. A site visit by our Pacific Basin Area staff to 
Taiwan was partially funded by the Soil and Water Conservation Bureau 
in Taiwan--$2,000. Funding by the NRCS will be required in FY 1997 and 
1998 for a total estimated cost of $35,500.
            status of final rule for conservation provisions
    Mr. Skeen. What is the status of the Final Rule dealing with the 
change in the requirement that land coming out of the CRP not to be 
held to a higher standard of protection than land that has not been in 
the program.
    Response. The status of the Final Rule dealing with the 
conservation provisions, Highly Erodible Land and Wetland, which 
include CRP land coming out of the program, is being delayed due to 
receiving more than 1500 comments on the Interim Final Rule which ended 
on November 5, 1996. Each comment has to be evaluated or analyzed and 
addressed in the Final Rule. This process is ongoing and as soon as it 
is completed we will publish the Final Rule. However, we have issued 
National Food Security Act Manual Policy changes, December 20, 1996, on 
land coming out of CRP addressing this required change. That change 
clarifies that land coming out of the CRP will not be held to higher 
standard of protection than similar land that has not been in CRP.
            expenditures for computer hardware and software
    Mr. Skeen. How much have you spent to date on computer hardware and 
field office computing software? How much do you plan to spend in 
fiscal year 1997? What is the total amount you plan to spend overall?
    Response. From fiscal year 1991 to present, NRCS has spent a total 
of $71,000,000 on field office computer system hardware and software. 
This total cost is broken down as follows. Hardware expenditures 
include $32,000,000 on computer servers, $1,000,000 on modems, and 
$1,000,000 on printers. Software expenditures include $5,000,000 for a 
commercial relational database, $1,000,000 for the Unixware operating 
system, $1,000,000 for other commercial software, and $30,000,000 for 
custom software. Custom software cost breakdown includes $18,000,000 in 
contract support services and $12,000,000 in agency software 
development resources.
    These figures do not reflect an additional $22,000,000 in support 
costs, including $2,000,000 for the agency national help desk, 
$5,000,000 for training, and $15,000,000 in state level system 
administration and support.
    For fiscal year 1997, NRCS has identified a need for $16,500,000 in 
field office related hardware including servers, desktop computers, 
laptop computers, and printers to augment the basic functionality of 
its existing field office computing system, primarily for the purpose 
of improving office automation capabilities. These acquisitions are 
complementary to the draft USDA service center common computing 
environment design and are consistent with recommendations of an NRCS 
internal Field Office Automation Future Directions Task Force. Software 
needs include $2,330,000 for custom software and $2,200,000 for 
commercial software, predominantly office automation related. In light 
of the existing USDA moratorium on significant hardware, software, and 
telecommunications procurements, it is expected that actual NRCS 
investments could be well below these identified needs.
    No accurate prediction of the total cost of NRCS field office 
automation for the next five years is presently possible until USDA 
agrees on the final functional and technical specifications for the 
USDA service center common computing environment and an apportionment 
of costs among the partner agencies.
          contract with national systems and research company
    Mr. Skeen. National Systems and Research Co. has been awarded a 
$212 million, five-year contract to upgrade computer and communications 
systems for your agency and FSA. Describe this contract in further 
detail and tell the Committee how this $212 million will be spent.
    Response. National Systems and Research Company is one of 6 vendors 
awarded a contract under a competitive procurement by the Farm Services 
Agency. The scope of the contract provides for a wide range of IRM 
support services, including software engineering and development, 
automation studies, GIS development, open system design, operations 
support for computer and telecommunications networks, database 
application development and support, help desk support, and training.
    The procurement resulted in the award of 6 indefinite delivery, 
indefinite quantity contracts to separate vendors. The $212,000,000 is 
the total amount of delegated procurement authority issued to the FSA 
contracting officer for contracts. Each of the 6 contracts has a 
minimum guarantee of $5,000 per year, and a maximum amount of 
$43,240,000 per year.
    The contracts are expected to support maintenance of current NRCS 
and FSA computing systems, and the development, deployment, and support 
of new computing systems for service centers, administrative 
convergence, and other initiatives under the auspices of the 
departmentally coordinated technical architecture and approved agency 
information system plans. Specific, appropriately approved tasks, 
aligned with agency and departmental plans, will be competed among the 
6 contractors. Any work performed for NRCS with these contracts is 
subject to departmental moratoriums and directives.
    Further specific regarding the contracts or delegated procurement 
authority are available from the FSA contracting officer.
                           liaison positions
    Mr. Skeen. You have a number of liaison positions with EPA, TVA and 
the Southeast Egg and Poultry Association. Were these positions created 
at the request of the supporting party or your agency?
    Response. These positions were created at the request of the 
supporting party.
                        offices on reservations
    Mr. Skeen. How many suboffices do you have operating on 
reservations?
    Response. We have thirty four offices at tribal headquarters which 
operate on a full time basis and seventy one which operate on a 
periodic basis, usually one day a week or as the tribe has requested.
                management of resources on reservations
    Mr. Skeen. The American Indian Agricultural Resources Management 
Act of 1993 requires the development of 10 year plans for the 
management of resources on all reservations in the Nation. What is the 
status of this requirement?
    Response. It is my understanding that Bureau of Indian Affairs is 
about to publish regulations on preparation of these 10 year plans this 
spring. Tribes will then need assistance in many cases to assess their 
resources and develop a sound planning process including tribal member 
input into what they want their reservations to be at some point in the 
future. A major strength of NRCS is it's area planning capability, 
which we are employing across the country. This technology and 
technical assistance will be available to tribes who requested NRCS 
planning assistance.
                         outreach worker effort
    Mr. Skeen. How many American Indian farmers and ranchers have been 
hired to meet with Tribes and members to explain USDA programs?
    Response. NRCS provides leadership for three other USDA agencies--
FSA, FAS, and APHIS--on a contract with IAC for the ``Outreach Worker'' 
effort. IAC has currently five part time employees providing outreach 
to tribes across the country. They also have an agreement with the 
Montana/Wyoming Stock Growers Association to provide outreach to four 
mountain states.
                 task force on agricultural air quality
    Mr. Skeen. Who serves on the Task Force on Agricultural Air Quality 
and how often do they meet?
    Response. The task force is anticipated to meet at least 4 times 
annually. A list of the members of the Task Force on Agricultural Air 
Quality follows.

           Members of Task Force on Agricultural Air Quality

    1. Mr. Emmett W. Barker, Jr.--President, EMI, Chicago, IL.
    2. Ms. Phyllis Breeze--Planning and Grants Specialist, Colorado, 
Department of Health and Environment, Denver, CO.
    3. Dr. Victor S. Chavez--Physician, Lubbock, TX.
    4. Dr. Manuel Cunha, Jr.--President, Nisei Farmers League, Fresno, 
CA.
    5. Dr. Thomas J. Ferguson--Physician, Univ. CA, Davis, CA.
    6. Mr. Wm. R. Hambleton--Agricultural Advisor, San Joaquin Valley 
Unified Air Pullution Control District, Fresno, CA.
    7. Mr. Eric G. Hurley--Project Manager, Central WI Windshed 
Partnership, Hancock, WI.
    8. Mr. Jerold R. Masters--Exec. VP, Arkansas Pork Producers Assn., 
Dover, AR.
    9. Dr. Joe Miller--Supervisory Plant Physiologist Research Leader, 
ARS, Raleigh, NC.
    10. Ms. Mary Nichols--Asst. Admin., Office of Air and Radiation, 
EPA, Washington, DC.
    11. Dr. Calvin Parnell--Engineer, Professor, Texas A&M. College 
Station, TX.
    12. Dr. Robert Quinn--Prof. of Geography, Consulting Meteorologist, 
Eastern Washington University, Cheney, WA.
    13. Dr. Clinton Reeder--Farmer, Economic Consultant, Pendleton, OR.
    14. Dr. Keith Saxton--Research Eng., ARS, Pullman, WA.
    15. Mr. J. Read Smith--Farmer/Rancher, Portland, OR.
    16. Dr. John Sweeten--Prof. and Resident Director, Texas Ag. Exp. 
Station, Amarillo, TX.
    17. Mr. James Trotter--Farmer, Macomb, IL.
    18. Mr. Dennis Tristao--Env. Affairs Officer, JG Boswell Co., 
Corcoran, CA.
    19. Dr. Michael Veenhuizen--Engineer, Owner, Livestock Eng. 
Solutions, Greenwood, IN.
    20. Dr. Philip Wakelyn--Manager, Env. Health and Safety, National 
Cotton Council of America, Washington, DC.
               cost of 1997 national resources inventory
    Mr. Skeen. What is the total cost estimate for the 1997 National 
Resources Inventory?
    Response.  The total cost estimate for the 1997 National Resources 
Inventory is $39 million. This estimate is based upon workload analyses 
performed by the Inventory Collection and Coordination Sites conducted 
in the spring of 1996 and costs for National Resources Inventory 
personnel at National Headquarters, the National Resources Inventory 
and Analysis Institute, and the National Cartographic and Geospatial 
Center. The cost spans the three fiscal years of 1996 through 1998. The 
estimate includes costs for personnel and overhead, travel vehicles, 
supplies, equipment, space, imagery, and training.
        multi-state inventory collection and coordination sites
    Mr. Skeen. Provide a list of the 21 multi-state inventory 
collection and coordination sites that have been established.
    [The information follows:]

              Inventory Collection and Coordination Sites

    East Region: Amherst, MA, and Morgantown, WV.
    Midwest Region: Madison, WI, E. Lansing, MI, and Ames, IA.
    Northern Plains Region: Bozeman, MT, Salina, KS, Lakewood, CO, and 
Bismarck, ND.
    South Central Region: Temple, TX, and Little Rock, AR.
    Southeast Region: Raleigh, NC, Auburn, AL, and Lexington, KY.
    West Region: Portland, OR, Davis, CA, Reno, NV, Anchorage, AK, 
Phoenix, AZ, Boise, ID, and Spokane, WA.
          data gatherers for the national resources inventory
    Mr. Skeen. How many data gatherers will be hired for this work? How 
many will be trained in 1997 and at what cost?
    Response. Completion of the 1997 NRI will require 108 staff years 
in addition to permanent NRCS staff. This means that 108 data gatherers 
will be hired for one-year appointments, or, more likely, between 200 
and 300 individuals will be hired for temporary positions lasting 
several months.
    Approxmately 740 data gatherers will be trained in 1997. Between 90 
and 100 data gatherers will be trained in Ft. Worth in April during 
four ``train-the-trainer'' sessions. The total cost of these four 
sessions is $250,000, based on estimates of travel, per diem, salaries, 
and training materials for both the attendees and the instructors. 
Approximately 640 additional data gatherers will be trained by those 
attending the Ft. Worth sessions. The cost of this training is 
estimated at $615,000, based on 4 days of salary, but no travel on the 
assumption that they will be trained locally. The grant total for 
training 740 data gatherers is $685,000.
                        data gathering timetable
    Mr. Skeen. You anticipated that data gathering will begin in March 
1997 and continue through mid 1998. Did you begin on time?
    Response. Congressional activity related to changes in farm policy 
resulted in the 1996 Farm Bill. Resource issues related to the impacts 
of that Act prompted an Agency announcement of the 1996 Special 
National Resources Inventory--NRI. This special inventory was designed 
to measure and record changes in selected land cover/use, changes in 
the extent and intensity of production, and changes in soil 
conservation practices. The inventory gathered data on 4,003 NRI 
primary sample units located in 191 counties. The 1996 special 
inventory significantly impacted planned milestones for the 1997 NRI.
    New technologies for inventory collection that result in more 
efficient, timely, and quality data are being incorporated into the 
1997 inventory. One of these technologies is the use of hand-held 
personal digital assistants. A Departmental moratorium on information 
technology acquisition has delayed the planned availability data of the 
full quantity of this hand-held equipment needed to complete the 
inventory.
    Concentrated pre-data gathering activity for the 1997 NRI began in 
January 1997. Actual data gathering will begin in mid-April and proceed 
through the spring of 1998.
                   examples of snotel data collected
    Mr. Skeen. Provide some specific examples of how the SNOTEL data 
collection system mitigated the 1996 floods in the Northwest.
    Response. Regional and local water management officials mitigated 
damages from the February 1996 floods in the Pacific Northwest by using 
SNOTEL--SNOw TELmegry--information made available by the NRCS through 
the Internet to predict the height and timing of flood crests, assess 
risk based upon thosepredictions and to take appropriate actions to 
minimize loss of lives and property. The SNOTEL system provided the 
only automated data available from critical watershed areas that were 
feeding the flooding events.
    When significant precipitation was forecast for the Lake Tahoe area 
during Christmas 1996 and New Year's 1997, the NRCS Water Supply 
Specialist in Nevada requested hourly data collection from 24 SNOTEL 
stations in the Sierra Nevada mountains. The hourly information 
provided by the SNOTEL stations verified the heavy precipitation and 
warm temperatures at high elevations. Several SNOTEL stations reported 
daily precipitation totals of five to seven inches and storm totals of 
up to 25 inches which, in tandem with rapid snowmelt, were the driving 
forces behind the record floods.
                    cost for additional snotel sites
    Mr. Skeen. You estimate that an additional 200 stations may be 
required to meet the growing need for water supply and natural 
resources information in remote areas. What would be the cost of 
providing these stations?
    [The information follows:]
                  cost for 200 additional snotel sites

                                                                        
                                                                        
                                                                        
Total non-recurring cost: $20,000/SNOTEL Site (all                      
 equipment, travel, and installation costs over a four                  
 year period).........................................        $4,000,000
Annual recurring costs: 8 FTE's.......................           828,000
    $1,000/SNOTEL site--Operation and maintenance (200                  
 sites)...............................................           200,000
    $68,000/FTE for 5 State data quality control                        
 specialists..........................................           340,000
    $96,000/FTE for 3 National Water and Climate                        
 Center personnel (data management specialist, quality                  
 control specialist, forecast hydrologist)............           288,000
                                                                        

                 joint usda-corps of engineers studies
    Mr. Skeen. How many joint USDA-Corps of Engineers studies are 
ongoing?
    Response. There are no USDA-Corps of Engineers studies are ongoing 
at the present time.
                      policy coordination council
    Mr. Skeen. What is the purpose of the Policy Coordination Council 
organized by the Secretary? Who serves on this Council and how often do 
they meet?
    Response. The Policy Coordination Council has not been active since 
reorganization, but discussions are being held to review the purpose 
and potentials for the Council.
         loan request under rural business cooperative service
    Mr. Skeen. Have you had any requests for loans through the rural 
business-cooperative service in fiscal years 1995 or 1996?
    Response. There were no requests for loans in 1995 or 1996.
                         new programs under ccc
    Mr. Skeen. The CCC was created in 1933 to stabilize, support, and 
protect farm income and prices; to help maintain balanced and adequate 
supplies of agricultural commodities; and to help in the orderly 
distribution of these commodities. How do the newly created 
conservation programs such as the Wildlife Habitat Incentives program 
fall within this mandate?
    Response. The Federal Agriculture Improvement and Reform Act of 
1996--the 1996 Act--, imposed a very significant change within CCC when 
it added to the mission of CCC, carrying out conservation or 
environmental programs authorized by law. This change in mission 
occurred on January 1, 1997. Therefore, the new conservation programs 
are in keeping with the new role of CCC.
                           management of ccc
    Mr. Skeen. The management of CCC is vested in a Board of Directors. 
Who serves on this Board? How often do they meet? What involvement or 
say do they have in how CCC funds are used and for what purpose?
    Response. The Board of Directors is chaired by the Secretary. The 7 
board members include: the Deputy Secretary as the Vice Chairman; the 
Under Secretary, Farm and Foreign Agricultural Services; the Under 
Secretary, Rural Economic and Community Development; the Under 
Secretary, Food and Consumer Services; the Under Secretary, Research, 
Education and Economics; the Assistant Secretary, Marketing and 
Regulatory Programs; and the Administrator of Farm Service Agency.
    The board has been meeting approximately once each year to take 
action on CCC dockets. When the board is not meeting, the Secretary 
approves activities of CCC until they can be ratified at the next board 
meeting. The administration of everyday activities is delegated by the 
Secretary to one of the officers of the corporation to oversee.
    The 1996 Act specified the amount of CCC funds that could be used 
for many of the conservation programs, the Board has not met to 
specifically address the use of CCC funds for conservation programs.
                       funding for whip and eqip
    Mr. Skeen. In the budget justification you state that Wildlife 
Habitat Incentives Program (WHIP) and Environmental Quality Incentives 
Program (EQIP) technical assistance funding are not effected by the 
Farm Bill section 11 cap and yet you are not receiving the full amount 
needed for EQIP from CCC. Why is this the case?
    Response. The 1996 Farm Bill provides funding for WHIP through CRP, 
in the amount of $50 million for fiscal years 1996 through 2002. NRCS 
can useConservation Reserve Program (CRP) 1996 unobligated funds to 
provide technical assistance costs. The 1996 Farm Bill also established 
EQIP and authorized funding beginning 1996 through 2002, through the 
use of CCC funds to include technical assistance costs. NRCS estimates 
it could use $38 million in 1997 to provide technical assistance. 
Currently a study is being conducted to provide the administration with 
a detailed analysis of the technical needs of NRCS for EQIP as well as 
conservation operations.
     outreach efforts with both state and non-governmental entities
    Mr. Skeen. I read in the notes where outreach efforts to join in 
partnerships with both state and non-governmental entities are being 
featured in the 1997 program delivery. Specifically, what are you doing 
in this area?
    Response. We established the Capacity Building Task Force that has 
the support and sponsorship of USDA-Natural Resource Conservation 
Service, National Association of Conservation Districts and the 
National Association of State Conservation Agencies. This task force 
works with conservation districts in providing general concentrated 
training in the general areas of leadership development, 
communications, and conservation partnerships.
                watersheds designated as priority areas
    Mr. Skeen. How many watersheds are designated as priority areas and 
for what reason?
    Response. For the EQIP, State Conservationists, with the advice of 
the State Technical Committee have designated 608 priority areas. Of 
these priority areas, many are defined by watershed boundaries. 
However, some are defined by natural resource boundaries other than a 
watershed boundary.
    The CRP has 107 priority areas established. These priority areas 
are, also, defined by watershed boundary, in some cases, and other 
natural resource boundary, in other cases.
               comparison of fpp and cfo with wrp and crp
    Mr. Skeen. How are the FPP and CFO programs different from the WRP 
and CRP programs?
    Response. The Farmland Protection Program (FPP) protects prime or 
unique farmland, lands of State or local importance, and other 
productive soils from conversion to nonagricultural uses. It provides 
matching funds to leverage funds from States, Tribes, or local 
government entities that have farmland protection programs. The FPP 
establishes partnerships with State, Tribes, and local government 
entities to acquire conservation easements or other interests in land. 
It protects strategic farmland from urbanization. It helps ensure that 
the valuable farmlands are preserved for future generations. It also 
helps maintain a healthy environment and sustainable rural economy.
    The easement acquisition is on a voluntary base. Qualifying 
farmland must have a pending offer from a State, Tribe, or local 
farmland protection program; be large enough to sustain agricultural 
production; be accessible to markets for what the land produces; have 
adequate infrastructure and agricultural support services; have 
surrounding parcels of land that can support long-term agricultural 
production; and experience urban development pressure. When selected, a 
conservation plan consistent with other conservation programs is 
required for each farm.
    The Wetlands Reserve Program--WRP--is a voluntary incentive program 
to assist owners of eligible lands to restore and protect wetlands and 
necessary adjacent upland areas. WRP preserves, protects, and restores 
valuable wetlands mainly on marginal agricultural lands where historic 
wetlands functions and values have been either totally depleted or 
substantially diminished. Wetlands restoration of such marginal lands 
provides landowners with a financial alternative to continued attempts 
to produce agricultural products on such high risk lands. Program 
delivery is designed to maximize benefits to wildlife, to provide for 
water quality and flood storage benefits, and to provide for general 
aesthetic and open space needs. Many of the WRP project sites are 
within areas that are frequently subjected to flooding and the flood 
storage being provided will lessen the severity of future flood events. 
The WRP is making a substantial contribution to the restoration of the 
nation's migratory bird habitats, especially for waterfowl.
    Under the WRP, the Secretary of Agriculture acquires permanent 
easements and 30-year easements, enters into restoration cost-share 
agreements/contracts, provides for overhead costs associated with the 
cost of purchasing an easement or establishing an agreement, develops 
wetland restoration plans, cost-shares the restoration, and monitors 
the maintenance of the easements and agreements. Close cooperation with 
other Federal and State agencies and private conservation entities is 
an integral aspect of program delivery. The State Conservationist, in 
cooperation with the State Technical Committee, is responsible for WRP 
implementation and operations.
    The type of land being protected by the FPP is significantly 
different from the type of land being protected by the WRP. The FPP and 
WRP both utilize easements, however, under the FPP the easements are 
generally permanent. The FPP is administered through cooperative 
agreements with state and local farmland protection programs.
    The Conservation Farm Option (CFO) pilot program provides producers 
of wheat, feed grains, cotton, and rice who are enrolled in AMTA one 
consolidated USDA conservation program payment, in lieu of the many 
conservation programs that are available. Producers must implement a 
conservation plan that addresses soil, water, and related resources, 
water quality, wetlands, and wildlife habitat. The statute provides 
broad discretion in designing CFO pilots, and provides the opportunity 
to tap local agricultural initiatives and innovations for improving 
environmental quality.
    We envision CFO as an opportunity to test the feasibility of 
innovative program delivery processes and innovative solutions to 
environmental concerns. We look to the locally-led effort to provide 
many of the ideas for innovative pilots. The innovations tested through 
the CFO may well be the basis for changes in statutory authorities for 
conservation programs into the 21st century. In fiscal year 1997 pilots 
will be determined through a Request For Proposal in the Federal 
Register.
    The CRP is a voluntary program that offers annual rental payments 
and cost-share assistance to establish approved cover on eligible 
cropland. The program encourages farmers to plant permanent areas of 
grass and trees on land that is subject to erosion, to improve soil, 
water and wildlife resources. Contracts are for between 10 and 15 
years.
    CFO will be administered as a pilot program, therefore, will 
probably not be available nationwide, as is CRP and WRP. The pilots 
will encourage innovation, which may be transferred to use in CRP or 
WRP after being proven through the pilots. The CRP provides for a 
payment limitation, which is not required under CFO.
               land evaluation and site assessment system
    Mr. Skeen. Describe in further detail the Land Evaluation and Site 
Assessment System.
    Response. The Land Evaluation and Site Assessment System was 
designed to help elected officials, citizens, farmers, soil 
conservationists, and planners rate a tract's soil potential for 
agriculture, as well as social and economic factors, such as location, 
access to market, and adjacent land use. It is a tool for identifying 
and taking into account the adverse effects of federal programs on 
farmland protection, and to ensure that federal programs are compatible 
with state, local, and private programs to protect farmland. States and 
local governments have modified the rating system to reflect local 
conditions and have often made part of their land use planning program.
                       third party certification
    Mr. Skeen. The farm bill allows for third parties to certify crop 
residue measurements. When will methodologies for these measurements by 
third parties be available?
    Response. The National Food Security Act Manual, Third Edition, 
Amendment 2, issued November 1996 established the following measurement 
techniques and methodology for person (producer) and third party 
certification. Interested producers and third party vendors should 
contact their local NRCS field office or state office for more 
information on their options.
    NRCS, in cooperation with the Agricultural Research Service--ARS--
will develop technical guidelines for residue measurement. Note: Some 
of the methods listed in this table are still undergoing improvement 
and development by ARS and NRCS.
    Currently, there are several crop residue measurement techniques. 
We will provide a table to describe those primarily in use.
    [The information follows:]

[Page 644--The official Committee record contains additional material here.]


                 third party crop residue measurements

    Third parties are any non-NRCS individuals who provide crop residue 
measurement, or other services to producer-clients. For purposes of 
1985 Act, as amended, NRCS will provide for a process to certify that 
the third party has, attended a residue measurement course and 
demonstrated the ability to compute percent residue cover using 
existing, accepted methods.

    Note.--Neither USDA nor NRCS guarantees or warrants (implicitly or 
explicitly through this process or any other) the work of any third 
party provider of technical services.
                                training
    The State Conservationist, in consultation with the State Technical 
Committee, will establish: a training format; a standard training 
content for the State; the appropriate measurement methods for the 
State; and, a training cadre composed of NRCS and non-NRCS persons.
    Training will be scheduled by NRCS Field Office personnel. 
Guidelines will be based on training requests and other factors 
pertinent at the State and local level.
                               crp delay
    Mr. Skeen. The Administration's announcement to use the savings of 
$65 million from the delay of enrolling 2 million acres into the CRP 
program in 1997 for the Crown Butte New World Mine Exchange has raised 
objections from many members of Congress. It also raises some 
questions. Is this savings of $65 million a USDA, OMB, or CBO scored 
savings?
    Response. The Administration estimates that deferring two million 
acres from the current CRP signup for one year will save about $103 
million over five years.
    Mr. Skeen. Provide the Committee with a copy of the language that 
resulted in this savings.
    Response. Legislative language to enable the exchange of Federal 
assets for the New World Mine property has not yet been developed.
    Mr. Skeen. How many jobs are impacted by this proposal?
    Response. We would not anticipate on jobs since all we are 
proposing is to defer a small portion of the projected CRP enrollment 
for one year.
    Mr. Skeen. As part of the agreement, Crown Butte Resources, Ltd. is 
required to set aside $22.5 million for reclamation activities. Will 
this $22.5 million come directly from the $65 million up front?
    Response. Yes, the $65 million includes the $22.5 million that will 
be set aside for reclamation activities.
    Mr. Skeen. The biggest question I have is the timing of this 
agreement. Bids for the 1997 CRP program are now being offered. This 
process has begun, but the Crown Butte initiative has a long way to go. 
the company has 30 days to respond to the proposal, land appraisals 
have to be completed, a cleanup consent decree must be negotiated, a 
public notice and comment period has to be initiated, and legislation 
has yet to be submitted and enacted. My guess is the 1997 CRP sign-up 
will happen long before these issues will be resolved. What happens to 
the $65 million in savings if this agreement doesn't happen for one 
reason or another?
    Response. If we are not able to implement this agreement in time 
for the upcoming 15th signup, we will attempt to initiate the deferral 
of CRP acreage during the 16th signup. Depending on how early or late 
this signup is held will determine whether we can realize the savings 
in FY 1998 or FY 1999.
                      conservation reserve program
    Mr. Skeen. Congressman Peterson has introduced a bill to allow the 
Secretary to extend expiring CRP contracts for one year. What is the 
Administration's position on this bill?
    Response. The Department of Agriculture does not recommend the 
enactment of legislation allowing for the extension of any expiring CRP 
contracts. We believe that the most environmentally sensitive acres 
should be selected to be enrolled or reenrolled in the CRP. Extending 
less sensitive acreage for another year would diminish the benefits 
that could be obtained from the program and would not be a judicious 
use of taxpayer dollars.
               environmental benefits index (ebi) summary
    Mr. Skeen. What criteria will be used to determine how to maximize 
environmental benefits in the new program?
    Response. An EBI has been utilized to prioritize and rank CRP 
offers since the tenth signup. The EBI was developed to comply with 
section 1234(b)(3) of the Food Security Act of 1985 as amended by the 
Food, Agriculture, Conservation, and Trade Act of 1990 which provided 
that ``in determining the acceptability of offers the Secretary may 
take into consideration the extent to which enrollment of the land that 
is the subject of the contract offer would improve soil resources, 
water quality, wildlife habitat, or provide other environmental 
benefits.''
    When a producer submits a CRP bid, NRCS collects data for each of 
the EBI factors of the land offered. Each bid is assigned a point score 
based upon the relative environmental benefits of the bid. At the close 
of sign-up, this information for every bid offered is transmitted to 
the national office. Bids are then ranked in comparison to all other 
bids offered nationally, and selections are made from that ranking.
    Mr. Skeen. Submit criteria used for the record.
    [The information follows:]

[Pages 647 - 658--The official Committee record contains additional material here.]


               watershed and flood prevention operations

    Mr. Skeen. How many ongoing watershed projects are there?
    Response. There are 543 ongoing watershed projects.
    Mr. Skeen. What is the total amount in financial assistance needed 
to complete all ongoing projects?
    Response. The total amount of financial assistance to complete all 
ongoing projects is $746 million.
    Mr. Skeen. How many projects are on the waiting list to receive 
financial assistance?
    Response. There are approximately 213 projects on the waiting list 
to receive financial assistance.
    Mr. Skeen. What is the amount needed to complete those on the 
waiting list?
    Response. The amount needed to complete those projects on the 
waiting list is $127.0 million per year for the next five years.
    Mr. Skeen. Why do you need to spend 60 percent of the program on 
salaries?
    Response. Traditionally, PL 83-566 funds have been allocated to 
states based upon identified needs and priorities. Historically, 
approximately 30 percent of the funds were for technical assistance--
TA--and 70 percent for financial assistance--FA--for construction 
contracts. As funds decreased, a higher percentage has gone into 
technical assistance in order to maintain technical capacity in areas 
of water resources planning specialists, design and construction 
engineers, construction inspectors, and contracting specialists. In 
addition, the program emphasis has shifted into more nonstructural 
solutions and land treatment measures for watershed protection and 
water quality which require a larger percentage of technical assistance 
to administer than do large construction contracts.
    As the program moves away from the traditional flood control 
structural measures, many sponsors and individuals are willing to pay a 
larger percentage of the cost of construction if NRCS provides the 
technical assistance. In fact a number of sponsors or other 
organizations are paying 100 percent of the construction cost. I do not 
feel the traditional 30/70 ratio of TA/FA is an accurate way to 
administer the program; however, our initiative for the watershed 
program is to move towards this ratio in the future. In fiscal year 
1996 the ratio was about 30 percent FA and 70 percent TA. The ratio in 
fiscal year 1997 was 43/57 TA/FA.
    Because funding for financial assistance will be limited, 
regardless of the ratio used, funds will be made available to projects 
according to a competitive funding mechanism for targeting assistance 
toward the highest ranked projects. These are the high-priority 
projects that provide the highest net benefits to society, considering 
economic, social and environmental factors. For those sponsors with 
lower priority projects that would prefer not to alter their projects 
to increase its economic or environmental benefits--making it more 
competitive--or to wait, up to $15 million is available for loans made 
through the rural development programs, such as Rural Utility Service's 
water and waster water loans. These are subsidized loans, in which, 
depending upon the income of the community, the interest rate of the 
loan can be reduced. Roughly $150 million in loans will be available to 
local sponsors. These actions will allow NRCS to both target resources 
to achieve the greatest societal impact with funds, as well as to 
spread the funds out and offer support to the maximum number of 
sponsors.
    Mr. Skeen. Can you tell us what the percentage breakout between 
technical and financial assistance was for the past five years? If you 
don't have that at your fingertips, you can supply it for the record.
    [The information follows:]

               WATERSHED OBLIGATIONS OBLIGATION BREAKDOWN               
------------------------------------------------------------------------
                                                 Technical    Financial 
                  Fiscal year                    assistance   assistance
                                                 (percent)    (percent) 
------------------------------------------------------------------------
1993..........................................           43           57
1994..........................................           40           60
1995..........................................           77           23
1996..........................................           68           32
1997 est......................................           57           43
------------------------------------------------------------------------

                       strategic plan development
    Mr. Skeen. GPRA, known as the Results Act, requires each executive 
agency to issue, no later than September 30, 1997, a strategic plan 
covering at least 5 years. In addition to a mission statement grounded 
in legislative requirements, the plans are to contain general goals and 
objectives that are expected to be outcome or results oriented (such as 
to improve literacy) as opposed to output or activity oriented (such as 
to increase the number of education grants issued).
    What progress is the agency making in developing its strategic 
plan, including defining its mission and establishing appropriate 
goals?
    Response. A first draft agency strategic plan was submitted to 
USDA's Chief Financial Officer in March 1996. This draft was based on 
input received in the ``Reinvention Forums'' conducted in 1994-95, and 
on conservation partnership strategic plans developed in each of the 
agency's new regions. In October 1996, a second draft was completed and 
was made available for review on the Internet. Comments received from 
partners and employees were used to refine the draft for submission to 
the Department in February 1997.
    The draft includes our mission statement and two overall general 
goals that state the ideal conditions that would result if our mission 
were achieved. In addition, it includes a series of strategic 
objectives that identify ideal conditions for the components of each 
goal. For each objective the plan includes one or more multi-year 
performance goals that set measurable targets for accomplishment. Goals 
and objectives and most performance goals are stated in outcome-related 
terms. That is, they refer to the condition of the land or to improved 
management practiced by non-federal individuals or entities.
    Mr. Skeen. Has the agency identified conflicting goals for any of 
its program efforts? If so, what are the performance consequences of 
these conflicting goals and what actions--including seeking legislative 
changes--is the agency taking to address these conflicts?
    Response. The agency has not identified any conflicting goals for 
program efforts.
                      goals of the strategic plan
    Mr. Skeen. Strategic plans must be based on realistic assessments 
of the resources that will be available to the agency to accomplish its 
goals. As you are developing your strategic plan, how are you taking 
into account projected resources that likely will be available--
especially as we move to a balanced budget? What assumptions are you 
making? How are you ensuring that your goals are realistic in light of 
expected resources?
    Response. Goals are based on two assumptions: Resources available 
to NRCS in fiscal years 1998 through 2002 will be at the level 
requested in the President's budget for fiscal year 1998 adjusted to 
include pay costs and inflation.
    The performance goals set in the draft strategic plan were 
developed through analysis of available data and information. The draft 
goals were reviewed by program and line managers to ensure the 
performance goals were reasonable. Over the next few months, NRCS will 
be conducting additional analysis at the national and regional levels 
to ensure the goals are feasible and to identify levels of 
accomplishment under alternative scenarios.
        link between strategic plan and annual performance plan
    Mr. Skeen. For Congress, the heart of the Results Act is the 
statutory link between agency plans, budget requests, and the reporting 
of results. Starting with fiscal year 1999, agencies are to develop 
annual performance plans that define performance goals and the measures 
that will be used to assess progress over the coming year. These annual 
goals are to measure agency progress toward meeting strategic goals and 
are to be based on the program activities as set forth in the 
President's budget.
    What progress have you made in establishing clear and direct 
linkages between the general goals in your strategic plan and the goals 
to be contained in your annual performance plans? OMB expressed concern 
last year that most agencies had not made sufficient progress in this 
critical area.
    Response. The general goals in the strategic plan are stated as the 
ideal condition that would result if our mission were achieved--ideal 
conditions for stewardship of the land and ideal conditions of natural 
resources. The strategic objectives within each general goal state the 
results we expect from our inputs--the results being a change in 
management and stewardship or a change in resource condition. Each 
general goal also identifies specific multi-year performance goals. 
These multi-year performance goals are the basis for the performance 
goals in the annual performance plan. By linking the contribution of 
each program toward achieving the performance goals in the performance 
plan, we can link the impacts of the agency's work to the general 
goals.
    Mr. Skeen. More specifically, how are you progressing in linking 
your strategic and annual performance goals to the program activity 
structure contained in the President's budget? Do you anticipate the 
need to change or modify the activity structure to be consistent with 
the agency's goals?
    Response. It will be possible to link the goals to the program 
activities during this cycle of planning. At present we do not 
anticipate proposing changes in the program activity structure. As we 
gain more experience in measuring outcomes and stating goals in terms 
of outcomes, we may find it necessary to propose changes.
    Mr. Skeen. Overall, what progress has your agency made--and what 
challenges is it experiencing--defining results-oriented performance 
measures that will allow the agency and others to determine the extent 
to which goals are being met.
    Response. The agency captures and reports, through its Field Office 
Computing System (FOCS), changes in land management as a result of its 
work. The FOCS is still being implemented in all NRCS offices and we 
still face a formidable task to capture appropriate data. Although this 
reporting system can measure the agency outputs, inputs, and changes in 
resource management, it is a much more difficult task to estimate 
results for the environment when improved management has occurred. The 
challenge with natural resource work in general is the lag time between 
specific inputs and results or changes in the condition of the natural 
resource. Currently, the agency is working to develop between 
technology for assessment of resources and for linking its activities 
to the changes in the natural resource conditions.
    At the National scale, the Natural Resources Inventory (NRI) gives 
us a tool to look at national level conditions and trends. Again, to 
link the changes in resource conditions and trends with program 
activity and performance measures still remains a challenge.
                        results act pilot phase
    Mr. Skeen. If applicable what lessons did the agency learn from its 
participation in the Results Act pilot phase and how are those lessons 
being applied to agency-wide Results Act efforts? What steps is the 
agency taking to build the capacity (information systems, personnel 
skills, etc.) necessary to implement the Results Act?
    Response. The agency participated in the Results Act pilot phase by 
identifying two pilot programs that were discrete entities within its 
Conservation Operations account. These were the Soil Survey program and 
the Snow Survey and Water Forecasting program. Both of these programs 
had very well-defined missions and had in place procedures and systems 
for measuring and reporting program activity in terms of outputs.
    The Snow Survey and Water Forecasting collects and delivers time-
sensitive information primarily to a specific audience of public and 
private sector water resource managers for immediate use. A part of its 
pilot activity, the program managers identified and made use of a set 
of performance measures that include both the output measures they had 
collected, such as number of reports issued, and new measures that 
focused on the usefulness of the information of the report. The new 
measures were developed by adopting a customer-focused approach. 
Program managers identified key concerns of their customers, developed 
a customer satisfaction survey form, and initiated a process for 
collecting customer satisfaction information. As a result of the pilot, 
the agency has appointed a team to develop a customer-feedback system 
for all programs.
    The Soil Survey program represents a highly successful example of 
the refocusing of a very traditional technical program as the result of 
a thorough strategic planning effort. (This effort was in fact largely 
complete when the Results Act pilot phase began.) The program's efforts 
as a pilot have been directed to demonstrating implementation of new 
strategies and to providing advice on strategic planning on other 
programs.
    The agency's primary need in order to implement the Results Act 
effectively is a reporting system that collects adequate information on 
activities and outcomes of activities available for agency managers. 
The reporting system must provide the information on a timely basis and 
at a minimal cost to field staff time. The agency has implemented an 
electronic information management system for its field offices (FOCS). 
The hardware and software are in place in all offices, and employees 
have been trained in its use. Field office employees are transferring 
information now in hard copy in field office customer case files into 
the electronic system. When the system is fully populated, managers 
will be able to obtain the detailed information they need by querying 
the system that front-line employees use in their daily work.
                          agency stakeholders
    Mr. Skeen. The Results Act requires agencies to solicit and 
consider the views of stakeholders as they develop the strategic plans. 
Stakeholders can include state and local governments, interest groups, 
the private sector, and the general public, among others. Who do you 
consider to be your agency's primary stakeholders and how will you 
incorporate their views into the strategic plans?
    Response. NRCS's major stakeholders are resource users and 
managers, primarily farmers, ranchers, soil and water conservation 
districts, resource conservation and development councils, state 
conservation agencies, and otherstate entities with responsibilities 
relating to resource use and protection, and tribal governments.
    Over the past two years, opportunities for the above mentioned 
stakeholders to state their views and concerns were offered through 
public reinvention forums, farm bill listening forums, regional 
strategic planning efforts, and several focus group activities. Their 
input was used when the initial goals and objectives were developed. 
Subsequent strategic plan drafts were made available to stakeholder and 
group representatives changes were made in response to their comments. 
The result is the February Draft of the strategic plan.
                    coordination with other agencies
    Mr. Skeen. For the Results Act to be successful, agencies with 
similar missions, goals, or strategies will need to ensure that their 
efforts are coordinated. What other federal agencies are you working 
with to ensure that your strategic plans are coordinated? What steps 
have you taken to ensure that your efforts complement and do not 
unnecessarily duplicate other federal efforts?
    Response. Several other federal agencies have varying 
responsibilities for conservation, protection, and development of some 
natural resources. NRCS has been working with the Forest Service (FS) 
to identify complimentary and/or duplicative goals, strategies and 
objectives. Within USDA, several `crosswalks' with other agency 
strategic plans (FSA, ERS, CSREES, APHIS, ARS, NASS) and between 
mission area responsibilities have been done to ensure coordination.
    In addition, NRCS, through numerous contacts on ongoing projects 
and initiatives, cooperates with the U.S. Environmental Protection 
Agency; the U.S. Department of Interior's Bureau of Reclamation and 
Fish and Wildlife Service; the Army Corps of Engineers; and all the 
Departments and agencies involved in the Federal Geographic Data 
Committee.
    NRCS also participates in the Natural Resource Performance 
Measurement Forum, which includes most Federal agencies that have 
responsibilities for managing federal lands or for aspects of 
environmental quality. Forum members work together to ensure good 
communication and to look for opportunities to develop compatible 
resource goals and performance measures.
             congressional consultation of strategic plans
    Mr. Skeen. The Results Act requires to consult with Congress as 
they develop their strategic plans. Since these plans are due in 
September, now is the time for agencies to begin the required 
consultations. What are your plans for congressional consultation as 
you develop your strategic plan? Which Committees will you consult 
with? How will you resolve differing views?
    Response. All USDA Mission Areas/Agencies have prepared draft 
Strategic Plans which are currently being reviewed by the Under/
Assistant Secretary (or other relevant official), the Senior Policy 
Staff and the Secretary. Upon completion of the review, the Department 
plans to provide copies of the Strategic Plan (including an overall 
Departmentwide Executive Summary and the Strategic Plans for individual 
Mission Areas/Agencies) to relevant Congressional Committees. 
Thereafter, we will look forward to meeting with Members of Staff to 
discuss our Strategic Plan and to solicit your input and advice on 
refinements to the Plan.
    We plan to provide copies of the Department Strategic Plan to the 
following Committees: Senate Agriculture Committee, Senate 
Appropriations Committee (Agriculture), Senate Energy and Natural 
Resources Committee, House Agriculture Committee, House Education and 
Work Force Committee, House Appropriation Committee (Agriculture), 
Senate Governmental Affairs Committee, and, House Government Reform and 
Oversight Committee.
         results oriented federal management and decisionmaking
    Mr. Skeen. In passing the Results Act, Congress sought to 
fundamentally change the focus of federal management and decisionmaking 
to be more results-oriented. Organizations that have successfully 
become results-oriented typically have found that making the 
transformation envisioned by the Results Act requires significant 
changes in what they do and how they do it.
    What changes in program policy, organizational structure, program 
content, and work process has the agency made to become more results-
oriented?
    Response. The agency has implemented a locally led process for 
resource assessment and conservation needs assessment. This locally led 
process has broadened the group of decision makers to ensure that 
programs are focused on the results most important to the local 
community and that the cumulative effect of program implementation will 
mean more significant changes in natural resource condition.
    The agency has adopted a regional structure to place decision 
making closer to the field where the end users or stakeholders have 
input. The regional structure allows the agency to better organize and 
direct program input, funds and staff to solve geographic resource 
problems and importance. Regional coordination of local priorities will 
assist in maximizing and leveraging agency resources to achieve desired 
results.
    Mr. Skeen. How are managers held accountable for implementing the 
Results Act and improving performance?
    Response. Regional conservationists are accountable for achieving 
their share of each agency performance goal and for maintaining the 
capability of their region to continue to achieve the agency's mission. 
To assist them, the regional office staff consists of an oversight and 
evaluation team to ensure that program consistency and accountability 
is maintained in the region; an operations management and quality 
management team to provide region-wide management support for strategic 
planning and operating plans that ensure the natural resource needs of 
the region are addressed; and an administrative support team to ensure 
that operations stay within legal and policy boundaries.
    The National function managers are held accountable for carrying 
out tasks that are necessary to meet the goals in the annual 
performance plan and the agency's strategic plan. Individual 
performance will be evaluated on the progress toward the goals.
    Mr. Skeen. How is the agency using Results Act performance goals 
and information to drive daily operations?
    Response. The performance goals are the basis on which operational 
plans and project plans are developed. Operational and project plans 
drive daily operations.
    For each performance goal in the performance plan, the agency 
managers will determine the workload of each program. National program 
managers will develop and propose national plans that identify regional 
responsibility for each performance goal. Regions will develop a 
regional operating plan to accomplish the set of all program goals. A 
National leadership team will allocate funds to accomplish the regional 
plans. State offices and service centers will develop operating plans 
as needed to accomplish their parts of the regional plan. Service 
center staffs will enter activities into Field Office Computing System 
(FOCS), and other program data bases. Reports of activities and their 
effects will be generated quarterly and used in assessing individual 
performance of operating units and managers.

                       State Enhancement Program

    Mr. Fazio. One component of the CRP rules that has come to my 
attention is the State Enhancement Program, and I commend you for it. 
California has a number of state-driven processes for addressing 
critical natural resource problems. In the past there has been no 
mechanism for incorporating CRP into a more coordinated habitat-wide 
and watershed-wide approach to natural resource problems. The State 
Enhancement Program seems to provide one. I understand Minnesota, 
Illinois and Maryland have submitted proposals to the department for 
approval under the State Enhancement Program. What is your schedule for 
approving those model proposals, and what is your plan for accepting 
proposals from additional states?
    Response. CCC has received proposals for a State Enhancement 
Program--SEP--from Maryland, Minnesota, and Illinois. These SEP 
proposals are being treated as pilot projects to develop a formalized 
competitive review process. Upon receipt of a proposal, an interagency 
team is formed to review the State's proposal. The team is composed of 
representatives from FSA, NRCS, and respective State government.
    Regarding the status of proposals received, Minnesota FSA and the 
State are in the process of developing a Memorandum of Understanding to 
execute the Enhancement program. Maryland is submitting new information 
to us regarding their proposal. And in the case of Illinois, we expect 
to meet with the State in April regarding their proposal and begin 
discussions on this matter. Additional states may submit a proposal at 
any time until the CRP acreage limit has been reached. A ranking 
process for evaluating SEP proposals and then selecting the best 
proposals out of all the offered bids is being prepared. Given the 
nature of the negotiating process between the parties involved, it is 
difficult to identify a schedule.
    Mr. Fazio. The State Enhancement Program appears to offer greater 
flexibility in including in the CRP land that provides critical 
wildlife habitat or is key to water quality issues in a watershed 
system, provided that the land in question is included in a 
conservation reserve enhancement program. Is that an accurate 
characterization of the program? Please comment.
    Response. The State Enhancement Program is the same as the 
Conservation Reserve Enhancement Program. It does allow States greater 
flexibility to include in the CRP lands that meet a high priority 
environmental or natural resource objective of that State, provided it 
is consistent with CRP in two ways. First, it allows greater planning 
and more coordination of program resources, both State and Federal 
within a single proposal. Second, it allows for an ``enhancement'' 
above the type of retirement carried out by the regular CRP. For 
example, the CRP can offer only moderate assistance to landowners with 
threatened and endangered species on their lands, not because rare 
species are not a priority, but because of the uncertainty for after 
the contract period expires. With the SEP, States can offer landowners 
extended contracts and thereby remove that concern. SEP proposals may 
include benefits to wildlife habitat, especially endangered species, 
water quality, or other designated objective by the State. As part of 
the State Enhancement Program, States must specify the land types to be 
targeted, the amount of acreage to be enrolled, and the proposed 
conservation measures that will be used to attain the desired benefits. 
Other conditions will be announced when the terms for the comparative 
review process are finalized. An approved Enhancement program sets 
aside a certain amount of acreage for the State to enroll lands in CRP.
    Mr. Fazio. The rule states that the CCC may enter into ``other 
agreements'' with states to use the CRP to further specific 
conservation and environmental objectives of that state. Please explain 
what ``other agreements'' might look like.
    Response. CCC intends to use a Memorandum of Understanding (MOU) to 
execute individual State Enhancement Programs. The MOU serves to 
formalize and approve the provisions of a State's Enhancement Program. 
The MOU will outline agency responsibilities, procedures, program 
costs, payments, etc. However, should some form of document be found to 
be preferable, CCC is not restricting itself to MOUs.
    Mr. Fazio. Would such agreements allow greater flexibility in the 
goals of a State Enhancement Program proposal, such as addressing 
endangered species issues?
    Response. The State Enhancement Program provides States with the 
flexibility to address State-specific natural resource objectives, 
including endangered species preservation. The Enhancement program 
allows States to use CRP to help meet their specified objective, 
provided it is consistent with the authorizing legislation.
         resource conservation and development program request
    Mr. Fazio. NRCS has requested $18 million for the RC&D Program for 
``funding local, non-federal watershed and rangeland coordinators to 
assist in watershed planning and rangeland conservation throughout the 
country, including * * * the salmon recovery sites (CA, OR, WA, ID).''
    California and the Pacific Northwest are working to address the 
problem of declining salmon runs by encouraging local restoration of 
salmon habitat. One promising piece of this solution has been the 
formation of local watershed councils to coordinate these restoration 
efforts. I'm aware that many members of the Northwest delegation, as 
well as a number of Northwest organizations, have urged the 
Administration to provide $2.2 million in FY '98 for the funding of 
local watershed coordinators through the regional organization For the 
Sake of the Salmon. What is the relationship between this request and 
the RC&D budget proposal?
    Response. This designated portion of the RC&D budget includes the 
$2.2 million to address a short-term need to support watershed 
councils--originally funded by the Environmental Protection Agency-EPA. 
The remainder of the $18 million will go to high-environmental priority 
watersheds and rangelands throughout the country. These will be 
consistent with the conservation priority areas identified through EQIP 
and CRP, or they may be areas identified through the RC&Ds directly. 
The $18 million should be sufficient using the same calculations For 
the Sake of the Salmon to fund over 400 non-federal coordinators.
    Mr. Fazio. Will you provide pass-through of this RC&D money 
directly to For the Sake of the Salmon for disbursement to local 
watershed councils?
    Response. Yes, a portion of this nation-wide program can be used to 
help For Sake of the Salmon and would be sent in the form of a grant.
    Mr. Fazio. Since funding for local watershed group coordinators 
would further increase the demand for reliable technical assistance 
that NRCS provides, do you believe NRCS has adequate funding in its 
budget proposal to satisfy the local for demand for technical 
assistance.
    Response. The budget request represents the best effort to provide 
adequate assistance for critical conservation work while the 
Administration and the Congress tries to balance the federal budget. A 
higher funding level may have been proposed if this were not the case, 
but given the current budget constraints and national priorities this 
is a fair request. The Administration will work with Congress to help 
meet this special request for technical assistance for both 
conservation districts and watershed coordinators as needed to meet 
locally identified priorities.
         california's natural communities conservation planning
    Mr. Fazio. In California, we have many competing interests for the 
use of land and natural resources, including agriculture, development 
and conservation. California's Natural Communities Conservation 
Planning--NCCP--process has produced several cooperative and successful 
efforts to achieve balance among such competing interests. NCCP 
approaches conservation planning from a regional, multiple habitat 
perspective that provides better conservation practices and greater 
certainty to landowners than a more piecemeal approach offers. Would 
the department be open to considering NCCP plans for funding under the 
State Enhancement Program?
    Response. Provided the process described yields results which are 
consistent with the CRP authorizing legislation, we will gladly 
consider any outcomes from the NCCP.
                      emergency watershed program
    Mr. Fazio. I understand that the bank stabilization program of the 
Emergency Watershed protection program--EWP--may be the only federal 
program to fund repairs to rock revetment sites. However, a site in my 
district--the Chico Landing to Red Bluff project--does not qualify for 
EWP because it exceeds the 400 square mile assistance criteria used for 
levee repair. Unfortunately, neither the Corps of Engineers nor FEMA 
have funding mechanisms for this type of repair project. It would 
appear as though NRCS is applying a levee policy to a bank 
stabilization policy when no other agency shares responsibility.
    Can you clarify the relevant policies in this area. If a project 
exceeds the criteria, where should my constituents go to accomplish 
this type of repair?
    Response. The 400 square mile limit on the Emergency Watershed 
Protection Program only applies to flood control improvements and not 
to strict erosion control measures. Erosion control measures for 
drainage areas over 400 square miles can be eligible for EWP if they 
address a sudden impairment, are economically and environmentally 
defensible, and do not include rock riprap, gabions, or similar 
measures to protect cropland. We will investigate this issue to insure 
our authorities and policies are being fully utilized.
    Mr. Fazio. I understand that NRCS requires a 30-day ``hold'' time 
in order to process reimbursement requests under the EWP. 
Unfortunately, this forces small local governments to finance up-front 
costs in amounts equivalent to several years of local revenues at a 
time when the local governments are already under stress because of the 
demands placed by the emergency.
    Does your emergency authority permit you to waive such a policy 
requirement? If so, has it been waived for communities in California 
affected by the January floods, and if not, why not? If NRCS does not 
possess authority to waive this requirement, what would be required to 
give NRCS the authority.
    Response. Payments made under the Emergency Watershed Protection 
Program are the same as all other NRCS programs and follow the Federal 
Acquisition Regulations. Only final payments are held 30 days. NRCS was 
not aware of a hardship on sponsors and has not had a request for any 
waivers in FAR's. We will investigate this issue in California to see 
if additional authorities are needed.
    Mr. Fazio. Several local governments in my district were recently 
informed that financial assistance through EWP relative to repairing, 
restoring, or maintaining facilities such as irrigation works is 
limited to work to protect against future damage to life and property 
but is not available to provide funds for repair work needed for 
damages already sustained by the facility.
    I can find no such restriction in the National Watershed Manual, 
and I understand similar projects have qualified in the past. Further, 
it would appear that repairing a breached levee would easily ``protect 
against future damage to life and property.''
    Please clarify this apparent contradiction.
    Response. Emergency Watershed Protection funds can only be used to 
reduce threats to life and property and are not used to restore or 
replace damaged facilities. In the case of levees, plugging the breach 
is generally the most economical means to reduce the threat behind the 
breach. In the case of irrigation facilities, plugging the canal or 
ditch behind the damaged control works is generally the most economical 
threat reduction measure.
    There may be other programs that address damaged irrigation works 
and systems. NRCS will work with all facility owners and operators to 
identify alternate programs for restoration.

                      urban resources partnership

    Ms. Delauro. I represent Connecticut's third district which 
includes the city of New Haven as well as rural areas. My district 
serves as a reminder that NRCS operates not only in rural areas, but in 
cities, as well as in those places where urban and rural meet. You 
mention the creation of the Urban Resources Partnership four years ago 
to address conservation concerns in cities. Has the program met 
expectations and what types of projects is the Urban Resources 
Partnership likely to support in the future?
    One of the critical challenges we face is to revitalize out cities. 
Urban conservation can help meet that challenge. Can reinvigorating our 
cities through urban conservation also yield benefits by slowing the 
urban sprawl that encroaches on valuable rural and farming areas just 
outside of cities?
    Response. The Urban Resources Partnership has met and exceeded the 
expectations that were originally set for the initiative. The seven 
federal agencies that form the core partnership have come together to 
work at the grass roots level with many different local entities. This 
partnership between the federal agencies, local government, and not-
for-profits has been the cornerstone of the initiative.
    The Urban Resources Partnership activities include streambank 
restoration, erosion and sediment control projects, urban spaces/park 
restoration, urban forestry projects, water quality projects, 
environmental educational projects, public trails establishment, 
greenway development, urban wildlife habitat projects, and more. Future 
environmental efforts will be determined by a locally led and community 
based planning process. The Urban Resources Partnership challenges will 
be to respond to the natural resources issues identified through the 
locally led planning process that correspond to items in our strategic 
plan.
    One of the goals of the Urban Resources Partnership is to educate 
elected official, businesses, neighborhood groups, individuals, and 
youth on the importance environmental stewardship. The Urban Resources 
Partnership strives to install a conservation ethic in every community. 
Along with enhancing and restoring the natural environment within 
cities the impacts or urban sprawl and loss of farmland will be to the 
forefront.

                    public access to digitized data

    Mr. Barcia. Your fiscal 1998 budget indicates that you will be 
digitizing soils data and using some of the latest information 
technologies to make these data available to the research community and 
the public. Could you fully describe what steps you are taking to make 
this data available to the public for decision making in a geographic 
context?
    Response. We are making this information available in several ways. 
First, the NRCS is cooperating with FSA and other USDA agencies that 
are to be co-located in the USDA Field Service Centers. As part of that 
office consolidation initiative is the development of full GIS 
capability to include digital orthophotography and digitized soil 
survey information for use in providing USDA services to the public.
    The Soil Survey Program within the NRCS has also been developing a 
National Soils Information System which is composed of databases and 
modules that help to analyze the data and produce reports and other 
information to meet customer needs and to help in the soil survey 
program. The current version of the National Soil Information System--
known as NASIS 3.0--is installed at 20 state offices around the county 
with 17 more offices scheduled to install the software in April. In 
these offices, all of our existing solid survey data have been 
converted to NASIS. In the remaining offices, our existing soil survey 
data are being converted to a previous version of the National Soil 
Information System before NASIS 3.0 can be installed. Already, NASIS is 
being used to manage soil survey data in some of our soil survey field 
offices throughout the county. In the West, in particular, our partners 
in soil survey--the Forest Service, Bureau of Land Management, and 
Bureau of Indian Affairs--are using NASIS in some of their offices to 
manage soil survey data and create their own interpretations and 
reports from the data.
    We are continuing to develop the National Soil Information System 
in cooperation with the Federal Geographic Data Committee, our National 
Cooperative Soil Survey partners, and the Information Technology Center 
in Fort Collins, Colorado. The next release of NASIS software will be 
in June of this year. This release will provide, for the first time, a 
nationally consistent and accessible client/server database 
architecture. This will provide all NASIS users immediate access to the 
nationally complete set of soil data, including all of the new 
interpretive capabilities. It will also provide soils data in a format 
suitable for use with the Field Office Computing System and the Soil 
Survey Geographic Database.
    Finally, all digitized soil surveys and their associated data sets 
are being archived on tape at our National Cartographic Center in Ft. 
Worth, Texas. The availability of the information is listed on our 
agency world wide web site and is provided at a minimal cost--recovery 
of cost of media such as tape, CD, etc.--or it can be downloaded 
directly from the internet.

                coordination of emergency work with fema

    Mr. Barcia. We know that following natural disasters, the Federal 
Emergency Management Agency is often meeting with local authorities to 
help design improvements to local infrastructure to mitigate against 
damages from future disasters. Given the amount of information that 
your agency has regarding soil conditions in these areas, to what 
extent are you involved in assisting FEMA or the local communities in 
designing these improved structures?
    Response. NRCS is required to coordinate all emergency programs 
with the Federal Emergency Management Agency in all Presidential 
declared disasters. NRCS staffs all Disaster Operation Centers and 
Field Offices and often is the only agency in place after the 
declaration is terminated. NRCS has staff on most Interagency Hazard 
Mitigation Teams that look at all declarations for post event 
mitigation opportunities. NRCS works with the FEMA Mitigation 
Directorate to identify and assist Mitigation Grant applications. NRCS 
also has authority under the Watershed Protection and Flood Control 
Act--PL-566--to plan and install flood control projects sponsored by 
local units of government.

[Pages 668 - 853--The official Committee record contains additional material here.]




                           W I T N E S S E S

                              ----------                              
                                                                   Page
Baker, J.R.......................................................     1
Busby, Fee.......................................................   493
Clark, L.E.......................................................   493
Dewhurst, S.B....................................................1, 493
Dunn, Michael....................................................     1
Hatamiya, Lon....................................................     1
Jett, Carole.....................................................   493
Johnson, P.W.....................................................   493
Lyons, J.R.......................................................   493
Margheim, G.A....................................................   493
Medley, Terry....................................................     1
Weber, T.A.......................................................   493





                               I N D E X

                              ----------                              

               Animal and Plant Health Inspection Service

                                                                   Page
Agricultural Quarantine Inspection:
    Agricultural Quarantine Inspection...........................16, 42
    Funding and FTE's by Airport.................................    43
    Number of Staff Years Funded.................................    42
Animal Care:
    Animal Care, general.........................................28, 30
    Animal Welfare...............................................21, 27
    Stolen Dogs..................................................    28
Animal Damage Control:
    Animal Damage Control........................................     6
    Cooperative Agreements.......................................    48
    Cost-Sharing/Cooperative Funding.............................    94
    Methods Development..........................................    50
    National Wildlife Research Center............................    84
    Proposed Budget Reductions...................................    92
    Protected and Endangered Species; spending on................    54
    Wolf Damage..................................................     6
    Zero Funding for Arkansas....................................    91
    Import Centers...............................................    70
Aquaculture......................................................    83
Asian gypsy moth/European gypsy moth.............................    61
Asian Longhorned Beetle..........................................    86
Biography of Terry L. Medley.....................................   176
Biotechnology:
    Permits......................................................    61
    Staffing and Funding.........................................    72
Boll Weevil......................................................    39
Bovine Leukosis-Free Herd Certification Program..................    78
Bovine Spongiform Encephalopathy--BSE........................23, 62, 87
Brown Citrus Aphid...............................................    77
Brown Tree Snake.................................................    61
Brucellosis......................................................    31
Budget Request--APHIS............................................     2
Budget Request History...........................................    74
Buildings and Facilities.........................................57, 85
Cattle Tick Program..............................................    48
Centers of Excellence............................................    73
Citrus Canker....................................................    62
Contingency Fund.................................................    69
Emergency Animal Disease Eradication Organizations...............    79
Emergency Funding................................................    61
Emergency Transfers..............................................    64
Employment Cost Reductions/Pay Cost Increases....................    80
Equine Infectious Anemia Program.................................    78
Explanatory Notes................................................   257
Export Certification.............................................    82
Federal/Non-Federal Dollars......................................    68
Fiscal Year 1998 Budget..........................................     2
Foot-and-Mouth Disease...........................................34, 66
Foreign Animal Diseases..........................................    82
General Accounting Office/Office of Inspector General Audits.....    75
General Accounting Office Reports................................    75
Golden Nematode..................................................    84
Government Performance and Results Act...........................    87
Horse Protection.................................................    31
Import/Export....................................................71, 81
Imported Fire Ant................................................60, 86
Inspector General Reports........................................    75
Institute for International Cooperation in Animal Biologics......    85
Integrated Systems Acquisition Project...........................41, 42
International Programs...........................................73, 82
Internet page....................................................    20
Investigative and Enforcement Services...........................    83
Karnal Bunt..................................................55, 63, 93
Legislative Proposals............................................    81
Livestock Conservation Initiative................................    84
Mediterranean Fruit Fly..........................................35, 64
Mexican Fruit Fly................................................    62
Mission Biological Control Center................................    83
National Animal Health Monitoring System.........................    56
National Center for Import/Export................................    81
National Monitoring and Residue Analysis Laboratory..............    79
National Plant Germplasm Quarantine Center.......................    59
National Poultry Improvement Plan................................    83
National Wildlife Research Center................................    84
Non-Federal Funds................................................    80
Noxious Weeds....................................................    37
Olympics, 1996...................................................    85
Opening Remarks..................................................     1
Overseas Locations...............................................    67
Pay Cost Increases/Employment Cost Reductions....................    80
Pest And Disease Exclusion.......................................    61
Pest Detection...................................................    18
Pesticide Residue Testing--NMRAL.................................    79
Pine Shoot Beetle............................................63, 79, 83
Pink Bollworm....................................................    69
Plant Methods....................................................    72
Plum Island Modernization........................................    59
Poultry Export Certification.....................................    82
Procurement Activity by Other USDA Agencies......................    42
Pseudorabies.....................................................    35
Questions Submitted For the Record:
    Chairman Skeen...............................................    27
    Mr. Dickey...................................................    91
    Mr. Bonilla..................................................    92
    Mr. Fazio....................................................    93
    Mr. Obey.....................................................    94
Rabies Management Plan...........................................    79
Regional Consolidation...........................................     7
Regulations......................................................    21
Regulatory Enforcement...........................................    79
Regulatory Enforcement and Animal Care...........................    29
Saltcedar Tree...................................................    86
Sanitary and Phytosanitary Standards.............................    25
Scrapie..........................................................    48
Screwworm Eradication............................................ 4, 33
Silverleaf Whitefly..............................................    70
Statement of Mr. Medley..........................................   211
Trichinae Pilot Certification Project............................    78
Tropical Bont Tick...............................................    66
Tuberculosis, Bovine.............................................    40
User Fees:
    AQI user fees Collected......................................    43
    Import-Export user fees......................................    71
    New user fees................................................    20
    Veterinary Diagnostics user fees.............................    71
Vesicular Stomatitis.............................................    63
Witchweed........................................................    38

                     Agricultural Marketing Service

Administrative Costs:
    ADP Purchase.................................................   132
    Other Services Expenses......................................   132
    Printing and Reproduction Expenses...........................   133
    Travel Expenses..............................................   132
Administrator's Statement:
    Hatamiya, Lon................................................   199
Biography of Lon Hatamiya........................................   175
Business Process Reengineering:
    Status and Results...........................................   102
Center of Excellence:
    Funding......................................................   103
Cotton:
    Cotton Classing Database.....................................   135
    Cotton Classing Fees.........................................   135
Emerging Democracies Program:
    Summary of Work..............................................   104
    Explanatory Notes............................................   373
Federal Seed Program:
    Federal Seed Act.............................................   107
Federal-State Marketing Improvement Program:
    Payments to States and Possessions...........................   108
Field Office:
    Office Closings..............................................   103
Grading:
    Fee Changes..................................................   102
    Grading Activities...........................................   101
    Hunt's Point Market:.........................................    14
    Quality and Sanitation Audits................................   135
    Quality through Verification Program.........................   135
International Trade:
    Imported Peanuts.............................................   103
    International Trade Barriers.................................    14
Limitation on Administrative Expenses:
    Administrative Expenses......................................   119
Market News:
    International Market News....................................   133
    Mailed Market News Reports...................................   120
    Market Concentration Reporting...............................   134
    Market News..................................................   102
    Market News Home Page........................................   134
Marketing Agreements and Orders:
    Business Process Reengineering for Marketing Orders..........   138
    Consolidation Criteria.......................................   142
    Dairy Marketing Order Consolidation..........................   141
    Marketing Order Conversion Cost..............................   116
    Marketing Order Imports......................................   105
    Minnesota-Wisconsin Milk Price...............................   118
    Northeast Interstate Dairy Company...........................   138
    Peanut Non-Signers...........................................   131
    Pistachio Marketing Order....................................   138
    Reimbursements from Milk Market Administrators...............   132
Motor Vehicles:
    Passenger Motor Vehicle......................................   133
National Laboratory Accreditation Program:
    Program Status...............................................   103
Organic Certification:
    Organic Certification........................................    97
    Organic Farming..............................................     9
    The Organic Certification Program............................   139
Perishable Agricultural Commodities Act:
    User Fees and Obligations....................................   117
Pesticide Data Program:
    Pesticide Data Program.......................................    11
    USDA Pesticide Data Program..................................   120
Pesticide Recordkeeping:
    Pesticide Recordkeeping Program..............................    99
Plant Variety Protection:
    Plant Variety Protection Act.................................   136
Questions Submitted for the Record:
    Chairman Skeen...............................................    97
    Ms. Kaptur...................................................   141
Reports:
    OIG and GAO Reports..........................................   131
Research and Promotion:
    1997 Research and Promotion Referendums......................   107
    Research and Promotion.......................................   105
Research Projects:
    Research Activities..........................................   107
Results Act:
    G.P.R.A......................................................   139
    Performance Measures.........................................   131
Section 32:
    Commodity Purchases..........................................   112
    Emergency Surplus Removal....................................   112
    Export Purchases.............................................   112
    Pink Salmon..................................................   117
    Surplus Removal..............................................   116
Shell Egg Surveillance:
    Spending.....................................................   103
Staff Years:
    Marketing Services-Staff Years...............................   134
Standardization:
    Standardization Costs and Development........................   100
Tobacco:
    Tobacco Programs.............................................   101
Transportation Services:
    Bulk Grain Facilities Study..................................   136
    International Carriage of Perishable Foodstuffs..............   136
    Jones Act....................................................   137
    Rail Line Abandonments.......................................   137
    Rural Bridges................................................   137
    Transportation Regulatory Actions............................   131
    Transportation Services......................................   108
    Voluntary Certification of Equipment.........................   136
Wholesale Market Development:
    Farmers' Markets.............................................   143
    Merchant Development Program.................................   138
    Wholesale Market Development.................................   104
    Wholesale Market Development and Payments to States..........   105

        Grain Inspection, Packers and Stockyards Administration

Administrator's Statement, Jim Baker............................241-256
ADP Costs........................................................   167
Advisory Committee.........................................158-161, 162
Aflatoxin Inspections............................................   152
Agency Resources.................................................   155
Alpha-Amylase...................................................156-157
Auction Market Failures..........................................   153
Biography of James Robert Baker..................................   177
Budget Request...................................................   156
Building Capacity for Implementation.............................   170
Central Filing Systems...........................................   157
Change for Results...............................................   172
Competition and Industry Structure..............................161-162
Computer Imaging.................................................   164
Concentration....................................................   173
Conflicting Goals...............................................168-169
Congressional Consultation......................................171-172
Current Statutes and Grain Facilities............................   144
Custodial Accounts..............................................154-155
Dealer/Order Buyer Financial Failures...........................152-153
Direct Linkages..................................................   169
Duplication of Federal Efforts...................................   171
Electronic Odor-Sensing Instruments..............................   164
Electronic Networking............................................   167
Explanatory Notes...............................................449-492
Foreign Travel...................................................   165
Four-Firm Concentration Ratio....................................   153
Generic Inspection Certificates..................................   155
GPRA Progress....................................................   168
Grain:
    Dust Explosions..............................................   148
    Exported Complaints.........................................148-151
    Inspected and/or Weighed....................................144-147
Heavy Metal Testing and Analysis.................................   152
Industry Comments on Rulemaking..................................   165
Inspection and Weighing Reduction................................   158
Intermarket Tracking System.....................................166-167
Investigations..................................................157-158
Legal Actions....................................................   161
License Fees....................................................162-163
Livestock Marketing Unrecovered Losses...........................   163
Livestock Slaughter..............................................   154
Livestock Producers Complaints...................................   144
Manager's Accountability.........................................   172
Meat Packing Industry............................................ 22-23
Niacin in Corn-Soy Blends........................................   164
OIG:
    Findings and Recommendations.................................   168
    Review.......................................................   168
Organizational Effectiveness.....................................   167
Other Services...................................................   156
Performance Measures under GPRA..................................   165
Performance Measures.............................................   170
Pesticide Data Program..........................................163-164
Pilot Plans......................................................   170
Poultry Compliance:
    Complaints...................................................   152
    Increase.....................................................   162
Proper Care and Handling of Livestock............................   155
Questions Submitted For the Record:
    Chairman Skeen...............................................   144
    Ms. Kaptur...................................................   173
Reengineered Quality Assurance and Control Program...............   168
Research.........................................................   163
Resources........................................................   169
Restriction of Competition Priorities............................   165
Slaughtering and Processing Packers..............................   154
Staff-Year in Canada.............................................   166
Stakeholders.....................................................   171
Standards:
    Canadian Oats................................................   163
    Rice.........................................................   163
    Soybean......................................................   156
    Two-Year Study on Wheat......................................   157
Toll Free Hotline................................................   152
Travel Increase..................................................   158
Unfair Competitive Practices Investigation......................165-166
Use of Results Act..............................................172-173
User Fees:
    New Structure................................................   166
    List.........................................................   157
Violations......................................................164-165
World Health Organization........................................   163

                 Natural Resources Conservation Service

Acres Covered by PL-566 Projects.................................   586
Administration of EQIP...........................................   623
Advisory and Assistance Services.................................   634
Agency Stakeholders..............................................   662
Agricultural Resource Conservation Demonstration Program.........   614
Biography of James Robert Lyons..................................   668
Biography of Paul W. Johnson.....................................   669
Border XXI Program...............................................   636
Breakout of 1996 EQIP Allocation............................... 621-622
California's Natural Communities Conservation Planning...........   665
CCC Financial Assistance for WRP.................................   524
Central and Southern Florida Flood Control Project Restudy.......   555
Chesapeake Bay Program...........................................   608
Comparison of FIP and SIP Appropriations.........................   614
Comparison of FPP and CFO With WRP and CRP..................... 642-643
Congressional Consultation of Strategic Plans....................   662
Conservation Compliance Amendments By The 1996 Farm Bill.........   531
Conservation Compliance and Conservation Operations Expenditures.   525
Conservation Farm Option Program.................................   629
Conservation Program Activities..................................   530
Conservation Reserve Program:
    CRP--Administrations' Position On Extensions.................   645
    CRP--Differentation In The Sign Up......................... 509-511
    CRP--One-year Extension On Expiring Contracts.............. 505-506
    CRP Delay....................................................   645
    CRP Funding and Staff Years..................................   632
Construction Contract Funding....................................   634
Contract With National Systems And Research Company..............   638
Cooperative River Basin and Management Studies...................   555
Coordination of Emergency Work With FEMA.........................   667
Coordination With Other Agencies.................................   662
Cost For Additional Snotel Sites............................... 640-641
Cost of 1997 National Resources Inventory........................   639
Criteria For Environmental Quality Incentives Program Allocations
                                                                618-619
Criteria For State Priority Areas................................   621
Cropland Managed To Enhance Soil Quality.........................   627
Current Status of Authorized PL-534 Projects.....................   583
Data Gatherers For The National Resources Inventory..............   640
Data Gathering Timetable.........................................   640
Deauthorized (Canceled) P.L. 566 Projects...................... 580-582
Earth Team Volunteers.......................................... 615-616
Emergency Watershed Program.................................... 665-666
Emergency Wetlands Reserve Program...............................   521
Environmental Benefits Index (EBI) Summary..................... 645-658
Environmental Quality Incentives Program:
    EQIP--Feedback From Farming Community........................   507
    EQIP Allocation Formula Elements.............................   620
    EQIP Allocations for California..............................   515
    EQIP Criteria................................................   504
    EQIP State Allocations..................................... 503-504
Evaluation of Conservation Operations and Watersheds Programs....   617
EWP Supplemental Request.........................................   503
Examples of Snotel Data Collected................................   640
Expenditures For Computer Hardware And Software................ 637-638
Expiring Water Bank Acreage......................................   628
Expiring Water Bank Acres...................................... 628-629
Explanatory Notes.............................................. 670-853
Farmland Protection Program......................................   615
Federal and Non-Federal Sources of Reimbursements................   592
Financial Support of Urban Resources Program................... 625-626
Fish and Wildlife Habitat Outcome................................   627
Flood Plain Management Study Follow-Up...........................   555
Flood Prevention Projects (PL-534)...............................   556
Forestry Incentives Program......................................   614
Funding for The Presidential Water Quality Initiative Fiscal 
  Years 1990-98..................................................   606
Funding For WHIP and EQIP...................................... 641-642
Geographic Breakdown of Obligations For Watershed Operations.....   588
Geographic Breakdown of Watershed and Flood Prevention 
  Appropriation................................................ 583-584
Geographic Information System Activities....................... 533-534
Geographic Information System Pilot Offices......................   617
Goals of The Strategic Plan......................................   660
GPRA Pilot Projects For Performance Measures................... 627-628
Grazing Lands:
    Grazing Land Related Courses.................................   611
    Grazing Land Technology Institute............................   611
    Grazing Land Allocations................................... 611-612
    Grazing Land Assistance......................................   611
    Five Year Annual Spending....................................   610
Great Lakes Program..............................................   608
Gulf of Mexcio Program...........................................   609
Headquarters Staff...............................................   525
Highlighted Major Functional Changes........................... 525-528
History of Emergency Watershed Program...........................   585
History of the Farmland Protection Program.......................   614
How Cost-Share Agreements Work...................................   522
Increase for CRP in California and Iowa........................ 516-517
Increase In Non-Federal Reimbursements...........................   588
Information and Educational Activities..........................617-618
International Activities.........................................   609
International Agroforestry Technology Program...................635-636
Inventory Collection And Coordination............................   639
Inventory Collection And Coordination Sites......................   639
Joint USDA-CORPS of Engineers Studies............................   641
Lake Champlain Project...........................................   609
Land and Structures Funding......................................   634
Land Evaluation And Site Assessment System.......................   643
Liaison Positions................................................   638
Link Between Strategic Plan And Annual Performance Plan.........660-661
Loan Request Under Rural Business Cooperative Service............   641
Local Implementation of EQIP.....................................   623
Major Functional Changes.........................................   525
Management of CCC................................................   641
Management of Resources On Reservations..........................   638
Management Recommendations For RC&D.............................593-605
Mandatory Programs...............................................   507
Methane Emissions...............................................531-532
Metropolitan Locations of Urban Resources Program................   627
Mitigation Banking...............................................   522
Mitigation Banking Pilots........................................   522
Model Farms Demonstrating Reduction of Methane Emissions........532-533
Motor Vehicle Fleet..............................................   634
Multi-State Inventory Collection And Coordination Sites..........   639
National Estuary Program.........................................   608
National Soil Information System Status..........................   535
Natural Resources Districts......................................   515
New and Planned PL-566 Projects..................................   586
New Plant Releases in Fiscal Year 1996:
    Germplasm, Tested, and Selected Class Releases..............539-543
    Cultivar Releases............................................   539
    Source Identified Releases..................................543-544
New Programs Under CCC...........................................   641
Non-Federal Watershed and Rangeland Coordinators................591-592
NRCS Budget Request.............................................612-613
NRCS Grazing Land Specialists....................................   611
Number of Field Service Centers..................................   616
Number of Outstanding Borrowers..................................   592
Offices On Reservations..........................................   638
One-Plan Concept Or Whole Farm Or Ranch Approach.................   589
Opening Remarks By Mr. Johnson..................................496-501
Opening Remarks By Under Secretary Lyons........................493-496
Other Federal and Non-Federal Obligations.......................586-587
Other Federal, State and Local Soil Survey Funding...............   535
Outreach Efforts With Both State And Non-Governmental Entities...   642
Outreach For Socially Disadvantaged Farmers And Ranchers Program. 
                                                                630-631
Outreach Worker Effort...........................................   638
P.L. 566 Projects Currently Being Installed.....................557-579
Partnership Projects For Restoration.............................   524
Partnership With Fish and Wildlife Foundation....................   522
Performance Measures and Budget Assumptions......................   632
Physical Impact Assessment of Water Quality......................   610
Plant Materials Centers:
    Operating Costs.............................................536-537
    Plant Materials and Buffer Strips...........................545-546
    Projects With The Department of Defense......................   545
Policy Coordination Council......................................   641
Prepared Statement of James Lyons................................   670
Program Evaluation Studies.......................................   555
Program Priorities..............................................507-509
Public Access To Digitized Data.................................666-667
Public Affairs Funding Level.....................................   610
Purchase of Flood Plain Easement.................................   555
Questions submitted for the Record:
    Chairman Skeen...............................................   517
    Mr. Fazio....................................................   663
    Ms. DeLauro..................................................   666
    Mr. Barcia...................................................   666
Regional Project Allocations.....................................   606
Reimbursement For Foreign Assignments............................   635
Reimbursement For Foreign Details and Assignments................   632
Rental Rates....................................................511-513
Resource Conservation & Development:
    Federal and Non-Federal Assistance...........................   590
    Measures Adopted, Planned, and Completed.....................   590
    Resource Conservation and Development.......................513-515
    Resource Conservation and Development........................   590
    Loans........................................................   591
    Status History...............................................   592
    Requests for 97.............................................664-665
Results Act Pilot Phase..........................................   661
Results Oriented Federal Management And Decisionmaking..........662-663
River Basin Studies..............................................   553
Royalty Collections For Plant Release............................   545
Rural Abandoned Mine Program.....................................   615
Rural Abandoned Mine Program Allocations.........................   632
Small Watershed Loans............................................   610
Snow Survey and Water Forecasting Program........................   628
Soil and Pesticide Database......................................   536
Soil Surveys:
    Program Reimbursements.......................................   535
    No. Completed, Published FY 96, Estimate For 97..............   533
    No. Needing Remapping Using Natural Resource Boundaries......   535
    Printing and Distribution Costs..............................   533
Southeast Regional Agriculture and Natural Resources Forum.......   609
State and Local Contributions....................................   530
State and Local Funding For Watershed Planning...................   553
State Conservationists...........................................   525
State Enhancement Program........................................   513
State Enhancement Program.......................................663-664
Status of Backlogged Projects...................................589-590
Status of Final Rule For Conservation Provisions.................   637
Status of Hydrologic Unit Areas..................................   607
Status of Osage County Pilot.....................................   616
Status of River Basin Studies....................................   553
Status of The Urban Resources Program...........................624-625
Status of Wetland Delineations Moratorium........................   523
Strategic Plan Development......................................659-660
Sub-Object Class Breakout For Object Class 25.2.................632-633
Task Force On Agricultural Air Quality...........................   639
Technical Assistance for All Conservation Programs...............   530
Technical Assistance For EQIP...................................504-505
Technical Assistance For Ongoing Activities of The CRBSC And GPC 
  Programs.......................................................   618
Technical Assistance Level Needed To Carryout EQIP...............   623
Technical Assistance Reimbursement for WRP.......................   524
Technical Service Centers and Regional Offices and Institutes....   529
Third Party Certification.......................................643-644
Third Party Residue Measurements.................................   645
Total Wetlands Acres.............................................   588
Training.........................................................   645
Training Agreements With Conservation Districts..................   634
Training Rangeland Conservationists..............................   611
United States And Taiwan Collaborative Program..................636-637
Unobligated Balance From Fiscal Year 1996........................   635
Unobligated Balance in WRP Appropriated Account..................   522
Upland Habitat Acres.............................................   588
Urban Forests....................................................   517
Urban Resources Partnership......................................   666
USDA National Agroforestry Center................................   635
USDA Service Centers.............................................   616
Use of Pelleted Newspaper On Demonstration Projects..............   606
Water Bank Acreage Enrolled in CRP...............................   628
Water Quality:
    Demonstration Projects--Funding Levels.......................   608
    Demonstration Projects--Status..............................607-608
    Hydrologic Unit Area Projects................................   608
    Initiatives..................................................   606
    Monitoring Techniques........................................   609
Water Resources Outcomes.........................................   627
Watershed And Flood Prevention Operations:
    Projects Awaiting Financial Assistance.......................   659
    Obligation Breakdown.........................................   659
    Percentage of TA/FA For Past 5 Years.........................   503
    Status of Projects...........................................   556
    Unobligated Balance..........................................   586
Watershed and River Basin Planning Studies.......................   547
Watershed Planning Activities Funded By State and Local 
  Governments...................................................553-554
Watershed Projects Backlog......................................501-503
Watershed Projects With Recreational Purposes....................   585
Watersheds--Recognizing Their Value..............................   511
Watersheds Designated As Priority Areas..........................   642
West Virginia Plant Materials Center.............................   545
Wetlands:
    Wetland Delineation Appeals..................................   523
    Delineation Tracking.........................................   523
    Determinations...............................................   523
    Wetlands and Upland Habitat Created or Enhanced..............   588
    Created or Restored..........................................   588
    Wetlands Reserve Program....................................517-521
    Wetlands Reserve Program Fiscal Year 1997....................   521
Wildlife Habitat Incentives Program..............................   629
Witnesses........................................................   493
WRP Mandatory Program............................................   524
WRP Staff Years and Related Costs................................   523
Yellowstone New World Mine.......................................   515