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



 
                  AGRICULTURE, RURAL DEVELOPMENT, FOOD
                  AND DRUG ADMINISTRATION, AND RELATED
                    AGENCIES APPROPRIATIONS FOR 1999

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

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND 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, John J. Ziolkowski, Martin Delgado, and Joanne L. 
                       Orndorff, Staff Assistants
                                ________

                                 PART 5

                 FARM AND FOREIGN AGRICULTURAL SERVICES
                    PROGRAMS AND FOOD SAFETY PROGRAMS
                                                                   Page
 Farm and Foreign Agricultural Services...........................    1
     Farm Service Agency
     Foreign Agricultural Service
     Risk Management Agency
     U.S. Agency for International Development--
         Public Law 480
 Food Safety......................................................  675
     Food Safety and Inspection Service
                                ________

         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        ESTEBAN EDWARD TORRES, California   
HENRY BONILLA, Texas                   NITA M. LOWEY, New York             
JOE KNOLLENBERG, Michigan              JOSE E. SERRANO, New York           
DAN MILLER, Florida                    ROSA L. DeLAURO, Connecticut        
JAY DICKEY, Arkansas                   JAMES P. MORAN, Virginia            
JACK KINGSTON, Georgia                 JOHN W. OLVER, Massachusetts        
MIKE PARKER, Mississippi               ED PASTOR, Arizona                  
RODNEY P. FRELINGHUYSEN, New Jersey    CARRIE P. MEEK, Florida             
ROGER F. WICKER, Mississippi           DAVID E. PRICE, North Carolina      
MICHAEL P. FORBES, New York            CHET EDWARDS, Texas                 
GEORGE R. NETHERCUTT, Jr., Washington  ROBERT E. (BUD) CRAMER, Jr., Alabama
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, February 24, 1998.

                 FARM AND FOREIGN AGRICULTURAL SERVICES

                               WITNESSES

AUGUST SCHUMACHER, JR., UNDER SECRETARY, FARM AND FOREIGN AGRICULTURAL 
    SERVICES
KEITH KELLY, ADMINISTRATOR, FARM SERVICE AGENCY
CHRISTOPHER E. GOLDTHWAIT, GENERAL SALES MANAGER
LON HATAMIYA, ADMINISTRATOR, FOREIGN AGRICULTURAL SERVICE
LEN ROGERS, ACTING ASSISTANT ADMINISTRATOR FOR HUMANITARIAN RESPONSE, 
    AGENCY FOR INTERNATIONAL DEVELOPMENT
KENNETH D. ACKERMAN, ADMINISTRATOR, RISK MANAGEMENT AGENCY
STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

                            Opening Remarks

    Mr. Skeen. Good afternoon.
    Today we have with us the Honorable August Schumacher, 
Jr.--I think he likes to be known as Gus--the Under Secretary 
for Farm and Foreign Agricultural Services--known by his former 
colleagues at Harvard and London School of Economics as just 
plain Gus. That's a pretty good group of folks to be ``Gus'' 
to.
    Mr. Schumacher is responsible for managing a wide number of 
programs of great importance to this committee including the 
activities of the Farm Service Agency, the Risk Management 
Agency, the General Sales Manager, and the Foreign Agricultural 
Service.
    In addition, we also have with us Mr. Len Rogers who is in 
charge of the International Food Aid Programs at the Agency for 
International Development. Mr. Rogers manages about $870 
million in P.L. 480 title II and III programs, which are under 
the jurisdiction of this subcommittee.
    We have a lot of ground to cover this afternoon so I'll 
turn the hearing over to Mr. Schumacher for introductions and 
an opening statement.

                  Under Secretary's Opening Statement

    Mr. Schumacher. Mr. Chairman, thank you very much. It's 
great to be back here. This is my first appearance before you 
in my new position. Ken Ackerman is with us. He's the most 
experienced of the agency administration. He's been here three 
or four years--I guess five years now, Ken.
    Mr. Skeen. You see what it's done for him. [Laughter.]
    Mr. Schumacher. But I'm delighted that Keith Kelly, and Lon 
Hatamiya are here with us today. Keith is really working. This 
is his first appearance as Administrator of the Farm Service 
Agency. And again, I commend Keith for all of his hard work. He 
was out over New Year's, I think, working with you a little a 
bit in New Mexico and making sure hay got dropped.
    Mr. Skeen. We appreciate that, too.
    Mr. Schumacher. And actually flying in some of the 
airplanes. His Vietnam experience was with the National Guard.
    Mr. Skeen. He sure tested out the National Guard's bombing 
ability.
    Mr. Schumacher. He came close, thank goodness, but not on 
target--on target but not too on target.
    Mr. Skeen. He did very well and we appreciate it very much. 
He did a good job.
    Mr. Schumacher. Len Hatamiya did a wonderful job at AMS and 
now is the terrific head of the Foreign Ag Service. And he and 
Chris worked very hard, Mr. Chairman, over the Christmas 
holidays as well to get credits moving to Korea and Asia.
    So, I'm very proud of this team. Steve Dewhurst is probably 
the most experienced here, and will help us get through some of 
the technical and detailed questions and maybe keep us all on 
track.
    I'll be very brief, Mr. Chairman, if I could put a full 
statement in the record.
    Mr. Skeen. Certainly.
    Mr. Schumacher. And I'll be just very brief in a verbal 
opening statement.
    Mr. Skeen. The entire piece will be in the record.
    Mr. Schumacher. Thank you, sir.
    I think within the framework of our administration's 
balanced budget, what we've tried to do in our mission area--
the people before you today--is to fashion a budget proposal 
that most impacts family farmers and production agriculture in 
America. This is the budget that is most direct at working with 
America's 2.1 million farmers.
    And our mission very clearly and succinctly is to secure 
the long-term vitality and global competitiveness of American 
family farming. We do this by improving the economic and trade 
opportunities and helping farmers that are anxious to manage 
their risks.
    And most of the themes I'll just briefly touch on before we 
move to the questions.
    Each of my administrators has a statement which I would 
also ask your permission to file for the record. They will not 
be making a statement today.
    Mr. Skeen. They'll all be in the record as part of your 
submissions.
    Mr. Schumacher. Thank you, sir.
    While we have moved from the traditional supply management 
and price support programs, USDA still provides a critical 
safety net for America's farmers and ranchers. This safety net 
has a number of critical elements: credit, crop insurance, 
other risk management tools, emergency assistance, and our 
overseas Foreign Agricultural Service and its wide ranging 
export assistance.
    We are carrying out our mission with a much smaller 
workforce--we're 30 percent down in our mission area from 1993 
to the proposed budget in 1999--and with fewer offices. We're 
down 641 offices during the same period, mostly at the county 
level.
    We are working very hard to emphasize our GPRA efforts to 
look at streamlining, to invest in our delivery system centered 
around a common computing environment--and I expect we'll have 
some good questions on that--and the converged administrative 
services that Dallas Smith and his colleagues and I are working 
very hard to make sure that we get as much savings out of 
administration so that we continue our delivery services for 
mainstream American family farmers. We do not want to 
sacrifice, Mr. Chairman, services to farmers.
    I'll touch on four quick topics: disaster assistance, crop 
insurance, the commodity program credit, and then end up with 
foreign trade--very briefly.
    You and I had some very good discussions over Christmas on 
the terrible snows and disaster that hit your State--but it's 
one we're working on very, very hard, and I think our budget 
proposal reflects some of this. It may need some strengthening 
in our ability to help producers in times of disaster. We have 
staff at local USDA service centers in most every county in the 
United States. And our employees at the local level play a key 
role working with FEMA to coordinate the emergency response as 
these El Nino and other unusual weather patterns occur in your 
area and in other areas around the country including the 
Northeast with the ice storm.
    Our ability to respond to recent and future disasters as 
we've learned in some of these disasters, is limited. And we 
need to talk about that over time.
    We provide some low-cost emergency loans, but these funds 
are limited. So far this fiscal year, we've obligated about $25 
million for emergency loans, and we expect the remaining funds 
to be obligated before the end of the fiscal year. We're 
reviewing the availability of these funds very carefully and 
will decide in coming weeks whether to request, over time and 
under review, a supplemental appropriation for emergency loans. 
We have that under consideration.
    With 181 million acres insured, crop insurance is a 
critical risk management tool. The NAP program offers some 
protections that are non-insurable. One of the greatest 
problems lies in our ability to help dairy and livestock 
producers. And that's one of our most difficult areas. We've 
tried to help dairy and livestock producers where we can in 
disasters--in New Mexico and Colorado, in the Northeast. 
There's some limited emergency feed programs, a limited 
livestock indemnity program, and some American Indian livestock 
feed programs. But it's thin.
    Let me touch on crop insurance very briefly because I think 
this is something on which we'll want to get into some great 
detail. Federal crop insurance, under Ken Ackerman's 
leadership, is a critical element of our farm safety net. We 
offer farmers protection against income loss due to production 
failures, and in some cases, market price declines. For the 
most part, crop insurance has alleviated the need for ad hoc 
disaster programs and disaster assistance. However, the program 
won't work if farmers don't participate. And we certainly 
learned that in the very difficult drought in Maryland when we 
were working very closely with some of the Maryland farmers, 
and it was just very, very difficult last summer because of low 
public participation. For that reason, we are expanding our 
efforts to educate all farmers about the benefits of 
participating in other methods of managing risk.
    The administration's budget provides full funding for the 
crop insurance program but proposes legislative changes to 
accommodate a shift in delivery expenses from discretionary to 
mandatory spending. Removing some of the uncertainty associated 
with discretionary funding will put this crop insurance 
program, which is so important to America's farmers, on a 
firmer financial footing. This, as we certainly heard from a 
number of our commodity groups, will require offsets, as we 
proposed, on the mandatory side to achieve these reforms and to 
make some additional reforms in the insurance program itself. 
There are proposals on step 2 cotton, and some changes in 
funding the Export Enhancement Program. Certainly, we can 
discuss those as well.
    Briefly, on conservation and the important commodity 
programs: the changes over the last decade in commodity 
disaster and conservation programs have changed the level, the 
mix, and the variability of CCC outlays. Since the 1980's the 
commodity programs' spending has declined dramatically. 
Spending for ad hoc crop disaster programs, as I've indicated, 
has been virtually eliminated, and spending for conservation 
programs has somewhat increased and it's become a significant 
portion of the CCC outlays.
    The conservation program outlays will account for about 
one-fourth of CCC expenditures in the proposed budget for 
fiscal year 1999. The CRP is our largest conservation program 
with current enrollment of 27 million acres at the end of 
fiscal year 1997.
    I think the CRP 16th sign-up went quite well, and the 
budget now assumes enrollment under the CRP of about 32 million 
acres for this fiscal year, and then rising to 34 million acres 
in 1999, and perhaps going to an eventual enrollment of 36.5 
million acres by the fiscal year 2001.
    These commodity programs will account for about two-thirds 
of CCC expenditures in fiscal year 1999. In the past, 
deficiency payments for producers of contract commodities, 
including feed grains, wheat, upland cotton, and rice, were 
tied to market prices. But with the AMTA payment levels fixed 
by legislation in the new farm bill through 2002, a great deal 
of the volatility associated with CCC outlays has been removed. 
While there is less volatility in CCC outlays, there is more 
variability in commodity prices, and farmers are having to 
depend more heavily on other aspects of the farm safety net.
    Turning, then, to the last two topics of credit and the 
international area: credit is a critical element of the safety 
net, along with crop insurance. Access to credit is one of the 
most important elements in the success of farming. And improved 
access to credit means more opportunities for beginning and 
small farmers, including women and minorities. For this reason, 
the 1999 administration budget proposes more funding for farm 
loans. It nearly doubles the funding for direct farm ownership 
loans and increases funding for loan guarantees. The budget 
also provides $2.4 billion for direct and guaranteed farm 
operating loans.
    To help farmers--borrowers--resolve any financial 
difficulties, we are proposing to double funding for the state 
mediation program. This program gives family farmers an 
opportunity to remain on the farm by resolving credit program 
problems in the most economical fashion for both the farmer and 
the lender, through alternative dispute resolution.
    However, because access to credit is so critical, we will 
be proposing emergency legislation to modify the prohibition on 
loans to borrowers who have received debt forgiveness. We 
believe a lifetime ban is simply too strict. Farmers deserve a 
second chance.

                        international activities

    Let me conclude on the international side. One of our 
primary goals in USDA is to expand economic and trade 
opportunities for agriculture producers around the country. And 
this international safety net is critically important.
    We did very well in fiscal year 1997, export levels 
totalled $57.3 billion--the second highest level on record. But 
yesterday at the outlook conference, the Secretary indicated 
there is a lower forecast for fiscal year 1998--it's only a 
forecast, we hope we'll do better. Certainly, the Asia 
situation and the new competitors in Argentina and Brazil, and 
the strong dollar are having an impact. The forecasted decline 
of $2.1 billion in our exports to Asia is noteworthy. Such a 
decline might have been quite significant 10 years ago. It's 
difficult today, but I think it can be managed. We can go into 
that in detail.
    Let me just illustrate. For a variety of reasons, our 
exports are simply on a different plateau than they have been 
in years past. In the mid-1980's, we were bubbling along at 
about $30 billion in exports. In 1989, they reached a new 
plateau of $40 billion, and have been pretty steady up until 
1995--around an average of $41 billion. In 1995, they reached 
another plateau, moving to about an average of $57 billion, 
with the average trade surplus over the past four years of 
about $24.5 billion which takes into consideration the lower 
fiscal year 1998 estimate.
    Lon, Chris, and I visited aggressively a number of 
countries in Asia right after Christmas and did a lot of work 
on the GSM credit program--$2.1 billion was allocated. And, I 
think that's having some success in some countries in 
stabilizing export levels . But for these problems in Asia, I 
think the GSM is the right tool at the right time.
    The budget fully funds the GSM program and does not limit 
our authority to utilize the program under the authorized caps.
    The budget estimate projects a lower utilization of DEIP. 
But these projections do not limit our ability to use DEIP.
    The budget funds the MAP--a very important market access 
program--at the authorized cap of $90 million.
    It offers an innovative, multi-year approach for funding of 
the important Export Enhancement Program.
    The budget also provides a strong commitment for food aid 
through title I, title II, and title III of P.L. 480. The total 
budget proposal is $979 million; $112 million for title I. 
Funding for titles II and III remain the same as in 1998 at 
$837 million for title II and $30 million for title III.
    That's a brief opening statement, Mr. Chairman, covering 
some of the key issues that we are working on now in our 
budget, and working with you on the budget.
    Thank you very much.
    [Clerk's note.--Mr. Schumacher's written testimony appears 
on pages 401 through 416. Mr. Kelly's written testimony appears 
on pages 417 through 433. Mr. Hatamiya's written testimony 
appears on pages 434 through 452. Mr. Ackerman's written 
testimony appears on pages 453 through 460. Mr. Roger's written 
testimony appears on pages 461 through 467. Biographical 
sketches appear on pages 398 through 400. The Farm Service 
Agency budget justification appears on pages 468 through 542. 
The Commodity Credit Corporation budget justification appears 
on pages 543 through 593. The Foreign Agricultural Service 
budget justification appears on pages 594 through 650. The Risk 
Management Agency budget justification appears on pages 651 
through 673.]
    Mr. Skeen. Thank you, Mr. Schumacher.
    Then let's get into the foreign trade balance which you 
mentioned, that has been, I think, one of the stellar 
operations we have in the federal government. It is a positive 
banking situation for us on the balance of trade. What's the 
latest forecast for our exports to Asia, given the financial 
problems?

                          asia export forecast

    Mr. Schumacher. The forecast now looks--Lon, correct me 
with the exact details--like we're down about $2.1 billion to 
Asia. Korea is down a little more than a billion dollars. And, 
it's made up a bit with our stronger exports to Latin America 
and especially to Canada--we're up $300 million. But it's not 
enough in Latin America to offset the projected and forecast 
decline for Asia.
    Mr. Skeen. For Asia?
    Mr. Schumacher. We're down about $2.1 billion to that 
important region. We have total exports, I think, on the order 
of $23 billion to Asia. And the growth there was 45 percent, so 
it's been a very strong market. I think the use of GSM credit 
has been very helpful, especially in Korea in trying to 
maintain our financial liquidity so they can buy food from the 
United States.
    Mr. Skeen. The Australians and New Zealanders are very 
tough competitors in Southeast Asia and I know that. But have 
we had an increase in exports from the United States or are we 
still relatively competitive as far as Australia and New 
Zealand are concerned?
    Mr. Schumacher. Well, I think the GSM credit--because it 
was mainly a liquidity problem--has given us, I don't want to 
say an advantage, but certainly provided a continuation of our 
exports, especially on meat. Our meat exports have been taken 
up very sharply by the GSM credits. We certainly have that 
under review working with the Korean government, but that has 
been a pleasant surprise to see the way the meat exports have 
moved into Korea.
    Mr. Skeen. Let's move on and let the rest of committee have 
their opening statements. I know Mr. Serrano wants to leave, so 
I'll let Mr. Serrano go next because I know he's got a pending 
meeting.
    Mr. Serrano. Why, thank you, Mr. Chairman. I have a meeting 
with the New York delegation of Governor Pataki, and I know 
he'll discuss many of these issues. He deals with you folks on 
a daily basis.
    First of all, let me thank you for all the work you do for 
us and, you know, the support you give all of us in the New 
York delegation and on this committee.
    I'm interested in Public Law 480, or the Food for Peace 
Program. There's the level of funding in 1999, do you think 
that puts us in a good position as a country to respond to any 
world emergency situation--famine? And is the structure and the 
expertise in place to deal with this should that happen?

                     public law 480 funding levels

    Mr. Schumacher. The administration has proposed strong 
funding for P.L. 480, especially for title II and title III. 
You may want to ask Mr. Rogers to briefly follow up. We monitor 
the world hunger issue very, very carefully. We have an 
interagency working group that meets almost monthly, now, and 
it's been very productive--not just when there's a crisis. I 
think it's been very, very helpful. Targeting critical areas 
like the North Korean situation is very difficult. We're 
monitoring the situation in Africa very, very carefully as that 
is impacted. ERS has put out some new studies. I'm going to ask 
Len to follow up. I think it's okay for the moment, but, Len, 
do you want to follow up on that question?
    Mr. Rogers. Yes, thank you, Gus. I might also point out 
that there is a food security commodity reserve which USDA 
maintains and which allows us to provide up to 500,000 tons a 
year of food in the event of an unforeseen emergency.
    I would say that I think that the budget is adequate for 
what we can foresee now, particularly with this reserve, 
although I think it is also tight. We have seen some declines 
in emergencies in places like Bosnia and Rwanda, but we also 
can see other potential crises out there--North Korea is a good 
example, and Sierra Leone, and other parts of west Africa. 
There is potential for a crisis to which we will need to be 
able to respond. And, it is a tight budget. I've noted in 
preparing this testimony that in 1987, the total U.S. food aid 
budget was 8.2 million tons, and then by 1997 that level was 
down to 2.8 million tons. So, we are now shipping much less in 
terms of food aid than we did at one time. So, while I think 
the budget is adequate, I think it's also a tight budget and 
this reserve becomes increasingly important.
    Mr. Serrano. So you feel comfortable that we could meet any 
crisis, any situation that arose?
    Mr. Schumacher. We keep our fingers crossed. Because with 
these unusual weather patterns we simply don't know how crises 
will come upon us. So we monitor it very, very carefully. The 
World Food Program does a great job. Len does a great job. But 
we keep a very close eye on this, Congressman.

                       trade relations with cuba

    Mr. Serrano. Now, let me ask you a related question, and 
there may not be a fruitful response, but it is a related 
question. Since the Pope's visit to Cuba--and this piggybacks 
on a question I asked last year--there is now legislation put 
in by Senator Helms to kind of modify his own Cuban embargo and 
allow for food to be sold, or shipped, to Cuba. One, has the 
Department, to your knowledge, begun to look at the possibility 
of that kind of legislation coming into place? If so, what kind 
of items might be involved, anticipating, perhaps, that the 
Pope's visit will accomplish more than just a partial lifting? 
If we were ever to get into a trade situation with Cuba, do we 
have yet, or have we conducted a study as to what we could be 
purchasing from them as far as agricultural items and what they 
would be interested in purchasing from us?
    Mr. Schumacher. Very good question. I think it's not widely 
known that Under Secretary Eisenstadt's title is Under 
Secretary for Economic Affairs and Agriculture. So he is 
looking at this on an interagency basis very, very carefully. 
There has been some preliminary work done on Cuba, both on the 
export and import side, and what might occur if that were to 
open up in the future. And, I can come and visit with you a 
little bit about that if you would like.
    Mr. Serrano. I would like that, yes; I would certainly like 
to discuss it, because that may be happening sooner than we 
think.
    Mr. Schumacher. Well, certainly wheat and rice would be 
very interesting for our exports. And, then there are other 
issues on their import side that would be interesting. But we 
can brief you.
    Mr. Serrano. So it would be mostly wheat and rice from our 
side.
    Mr. Schumacher. Lon, do you want to expand on that?
    Mr. Hatamiya. If I could--Mr. Serrano, let me also mention, 
the Foreign Agricultural Service has an agricultural trade 
office in Miami that covers the Caribbean. And, our officers 
there are, on a constant basis, doing analysis of that entire 
region, which includes some anecdotal evidence about the 
situation in Cuba. So we can come up to brief you more 
thoroughly about that situation.
    I was in Miami about two months ago meeting with the staff 
there, and they have quite a bit of information on what Cuba is 
shipping to many of the other Caribbean nations and how that 
affects U.S. agricultural shipments into that region. So we can 
provide, certainly, some more information to you. But we are 
positioned, because of that office in Miami, to respond quite 
rapidly, if in fact that market does open up.
    Mr. Serrano. Okay. Mr. Chairman, I have a few more 
questions, but in view of the time, what I'd like to do is just 
submit them for the record, and certainly look forward to 
meeting with you folks on that issue.
    Mr. Schumacher. I look forward to visiting with you, sir.
    Mr. Serrano. Thank you.
    Mr. Skeen. Mr. Schumacher, I apologize to you. I understand 
that you have some of those that are with you that have opening 
statements that they would like to make.
    Mr. Schumacher. I think we'd like to submit them for the 
record, if you wouldn't mind, to save time.
    Mr. Skeen. Mr. Rogers, I think, has a----
    Mr. Schumacher. Do you want to make an opening statement?
    Mr. Rogers. I'd like to make just a brief oral statement, 
if that's alright, Mr. Chairman.
    Mr. Skeen. Absolutely.
    Mr. Rogers. I'll submit mine for the record.
    Mr. Schumacher. I apologize.

                        Statement of Mr. Rogers

    Mr. Rogers. Mr. Chairman, members of the committee, it's an 
honor for me to testify before you today on food aid programs 
managed by the Agency for International Development.
    Title II and Title III of Public Law 480 continue to serve 
vital U.S. national interests. They support development 
programs which assist the most food-insecure countries to 
escape from hunger and poverty. Food aid is also the most 
valuable contribution the U.S. makes to victims of natural 
disasters and civil strife. Without U.S. food aid, millions 
more people would suffer, especially women and children.
    Food aid has a proud heritage of success. Many past 
recipients of our assistance are now major importers of U.S. 
agricultural commodities. To replicate this success in the 
future, we are preparing a plan of action to achieve the World 
Food Summit goal of reducing malnutrition by half by the year 
2015. USDA and Under Secretary Schumacher have provided 
essential leadership in this effort.
    The simple fact is U.S. food aid programs work. I had the 
privilege of leading a U.S. delegation to North Korea to assess 
the food situation there. There is no doubt our food helped 
avert a major crisis last year. Due to serious drought, we'll 
need to help again this year. And, we will again focus our 
assistance to prevent hunger and malnutrition among children.
    At the same time, we need to insist in North Korea, and 
elsewhere, that our assistance be properly managed. This 
includes careful monitoring to ensure that U.S. food goes where 
we plan and helps those in need.
    We're fortunate to have strong partners to oversee 
distribution of Title II food in the field. U.S. private 
voluntary organizations and the World Food Program are real 
heroes working in difficult and sometimes dangerous conditions. 
In 1997, Title II helped feed over 43 million needy people.
    Title III is equally important. Only if governments adopt 
the policy reforms necessary to support agriculture will food 
availability increase. Title III is now focused on the neediest 
countries such as Ethiopia, Mozambique, and Haiti.
    While real progress has been made with food aid, hunger and 
malnutrition remain widespread in the world. USDA estimates 
that the number of malnourished people in Africa will actually 
grow over the coming decade unless current trends are reversed. 
At the same time, overall food aid levels have declined 
sharply, from 8.2 million tons in 1987, to 2.8 million tons in 
1997. The proposed funding for fiscal year 1999 for both Title 
II and Title III is the same as enacted for fiscal year 1998. 
These programs are critical to meeting the food security needs 
of millions of people. I urge the Congress to continue its 
strong support for U.S. food aid.
    Thank you, Mr. Chairman, I'd be happy to answer questions.
    Mr. Skeen. Thank you, Mr. Rogers.
    Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman. We welcome all of the 
witnesses--the Under Secretary, and I assume the other 
panelists will have their full testimony submitted for the 
record. Is that correct? Alright.
    First of all, thank you for the very good job that you do 
in representing our country both at home and abroad. I have a 
couple of technical questions, and then a couple of broader 
ones.

                     crop insurance budget proposal

    One of the more technical questions deals with crop 
insurance and the risk management aspects of what you attempt 
to accomplish there. You are aware of the serious disagreement 
that existed, perhaps, on this subcommittee over the issue of 
compensation for those who were actually the crop insurance 
agents that were handling this program. I think I still have a 
legitimate doubt as to the percentage. I think we left it at 
what, 27 percent, which I did not vote for last year. My 
question really is, now that there's a proposal to move this 
from the discretionary to the mandatory part of the budget 
through the Federal Crop Insurance Program, your budget says 
that you're going to fully offset this under PAY-GO. And, in 
the budget justification as we read it, it notes only a partial 
PAY-GO offset resulting from program changes that don't take 
effect until fiscal year 2000.
    We asked the Secretary when he was here last week for a 
little more clarification on where this money is supposed to 
come from, and I would re-ask that question of you. But 
secondly, do you expect the authorizing committees to go along 
with this proposal?
    Mr. Schumacher. We have, Ms. Kaptur, put up a, I think, 
first cut at a way of making the moving from discretionary to 
mandatory. Since crop insurance is so important as part of the 
safety net for the American family farmer, to alleviate the 
difficulties in appropriating it every year under 
discretionary, we propose moving all delivery expenses under 
the mandatory side with one set of options for paying for this 
under offsets. There are certainly a number of ways of cutting 
up the apple, but we have proposed, as I said in my opening 
statement, one set of options for paying for the offsets. I 
think also, Ken, we proposed the 27 to 25 percent reduction in 
the administrative expense reimbursement to companies.
    Mr. Ackerman. I feel like I can walk you through 
specifically where----
    Ms. Kaptur. Yes, we'd like to know where the money is 
coming from.
    Mr. Ackerman. Right, right.
    Mr. Schumacher. Why don't I have Ken do it because he's a 
little more on top of it than I am. We both are very involved 
in this one. It's been quite intricate.
    Ms. Kaptur. Thank you.
    Mr. Ackerman. As far as where, specifically, the money is 
coming from; yes, the proposal is fully offset on the mandatory 
side of the budget. The part that comes out of the crop 
insurance program represents about half of the total amount 
beginning in the year 2000. The other cuts on the mandatory 
side to pay for it are from programs other than crop insurance. 
So in the first year, the offsets come from the export 
enhancement program and others outside of crop insurance and 
then in the later years, about half of the reductions come from 
outside of crop insurance.
    As far as the reductions within the crop insurance program, 
they're basically three-fold: first, there is a cap put on 
liability for catastrophic level policies of $100,000; second, 
there is a proposed further reduction in the percent 
reimbursement to companies that would fall from the current 27 
percent level to 25; and third, there are some smaller 
reductions for the buy-up program, taking the form of a small 
reduction in buy-up subsidy and a reduction in the loss ratio 
for policies from 1.075 to 1.06. Those items, and they are laid 
out in detail in our written testimony, add up to the full 
amount to offset the movement to the mandatory side of the 
budget.
    Ms. Kaptur. And that starts in what year?
    Mr. Ackerman. The movement to the mandatory side of the 
budget starts in 1999. For the first year, 1999, the offsets 
come from outside of the crop insurance program. Beginning in 
the year 2000, about half of them come from within the crop 
insurance program.
    As far as whether the authorizing committees will approve 
this or not, we are urging them very strongly to do so. We feel 
there is a strong case to do so. We have briefed, at this 
point, the staffs and members of both committees. On the Senate 
side, Senator Lugar has already scheduled a hearing for March 
10 to focus on the issue. So we have every indication that the 
committees will focus on this issue early in the year, and 
we're hopeful. We'll be urging them very strongly to go forward 
with it.
    Ms. Kaptur. In the proposal you just stated, the commission 
will be reduced somewhat. What happens to--I understand right 
now, there's also a provision in the Crop Insurance Program 
that even in down times, an insurance agent, when the 
Government loses money, that they can share in excess gains, 
even when the Government is losing money. How will your draft 
legislation fix that peculiarity?
    Mr. Ackerman. The draft legislation only deals with the 
expense reimbursement portion of our relationship with the 
insurance companies. That does not affect the gain-sharing and 
loss-sharing parts of it. To do that would involve 
renegotiating the Standard Reinsurance Agreement.
    Yes, you're correct, we have a gain-sharing and loss-
sharing system with the companies. It's a complicated 
agreement. It involves a number of different risk pools. Last 
year we renegotiated it with the companies to put more of the 
risk on the private sector in the program.
    Ms. Kaptur. All right. I thank you. That's the clearest 
explanation I've had to date of what's happening to the crop 
insurance program. And we'll look forward to your more specific 
reply in writing on those questions.

                         U.S. Import Situation

    Mr. Secretary, you talked about the performance of our 
programs to assist with export--increases in exports. And we 
certainly have had record exports. We have also had record 
imports.
    Mr. Schumacher. Correct.
    Ms. Kaptur. I'm wondering why you don't deal with that in 
your testimony.
    Mr. Schumacher. Well, as I said in my testimony, we had a 
reduction in our trade surplus. Imports are now forecast, Lon, 
at $38 billion.
    Mr. Hatamiya. Yes.
    Mr. Schumacher. So, the trade surplus has narrowed--or is 
forecast to be narrowed. Lon, do you want to just walk through 
the major components of those imports.
    Mr. Hatamiya. If I could, Ms. Kaptur; I put together over 
the last 15 years some of the import demand shifts of some of 
the commodities coming into this country. And, although our 
trade balances remain quite large, as the Under Secretary has 
said, this current year we're going to see a dramatic change in 
that balance, although it's still a surplus.
    Some of the areas that we see the largest changes are in 
the area of live animal shipments imported into this country, 
primarily out of Mexico. Also in the higher value products, 
such as fresh processed fruits and vegetables. There are 
others: vegetable oils, red meats, and tree nuts are some other 
commodities. I'll be glad to provide for the record a trend of 
what imports have changed over the last 15 years.
    [The information follows:]

[Pages 13 - 16--The official Committee record contains additional material here.]


    Ms. Kaptur. I really would appreciate that. We have got one 
excellent chart that probably came from you in some way in our 
office that I looked at that showed the imports that were 
coming in here. And these just weren't boutique items, but 
where competition was directly against many of our own 
producers. And I'm quite interested in that. And particularly, 
Mr. Schumacher, in your role with the Farm Service Agency as 
well as the foreign agricultural piece of this equation.
    I just left lettuce farmers from my district. And what are 
they fighting about? They are fighting about the fact that Dole 
is bringing a facility into Ohio that is going to package 
lettuce and other salad greens and so forth from anywhere in 
world, but Dole isn't trying to source from local lettuce 
growers. And you know, they make their own connections. These 
institutions get so big that sometimes they'll come into an 
area and just not pay any attention to the local source--they 
don't know where they are. It's hard for some of these farmers 
to meet the market. So they were talking to me about that 
additional pressure on them in the area of fresh greens.
    The same has happened to us--very heavy duty--in the area 
of tomato production. It is certainly happening in beet 
production--sugar beet production.
    And so we see a lot of signs of this in our area where many 
farmers, now that they have freedom to farm, have used some of 
these other types of production to insulate themselves against 
the insecurity in the market for corn and soybeans, the kind of 
the mainline products that they grew. And now those niche 
markets are being pulled out from underneath them, and I'm 
very, very concerned about the import side of this equation. To 
take a look at the--there ought to be some kind of a red light 
that goes off at USDA when some of this stuff comes in here and 
we take a look at what's happening to our own U.S. producers 
and ask the question: how do we use our strength to help them 
meet the market.

                     Horticultural Product Exports

    Mr. Hatamiya. Can I also add, and I'll turn it back to the 
Under Secretary, but putting the numbers I just mentioned in 
context, in many of these same commodity areas also we're 
seeing gains in exports, primarily in the horticultural area. 
The largest area we've seen in export development has been in 
fresh fruits and vegetables to outside of this country. So we 
may be seeing more coming in here, but we're also shipping more 
outside of the country. So it has to be really put in context 
of the entire overall scheme.

                        Tomato Exports to Japan

    Mr. Schumacher. One thing on tomatoes. I used to grow 
tomatoes, and my cousins grow tomatoes, and something that you 
and I have talked about a lot, Ms. Kaptur, is tomatoes. 
Yesterday we had a meeting at the Ag Outlook Conference and 
some of the California and Florida tomato growers were there. 
That is probably one of the most sensitive areas. And the 
California Tomato Growers Commission was reflecting, after 
working very closely with us, how we've managed to break open 
the Japanese market. They gave a very good presentation of how 
they're beginning to make some significant market gains. I 
think they said they were selling nearly 1.6 million cases to 
Japan next year at a 40 percent premium in that market than 
we're getting this year. And Florida has now taken a keen 
interest in this as well.
    We are also working very, very hard to get that suspension 
agreement in place in Mexico and so that will assist us a bit 
more.
    California now produces, I discovered yesterday, 1 billion 
pounds of tomatoes. I didn't realize that it had reached that 
level. And, the fact that we've now opened up some additional 
markets, I think is helpful.
    But we certainly are well aware of the declining trade 
balance. Horticulture, which is interesting, has not been as 
affected in our forecast as perhaps others. We are still 
projecting this year an increase in horticulture exports 
worldwide. And I'm very proud of that. It's a little bit less 
of an increase than we anticipated but still an increase. So it 
speaks very well of our horticultural industry.
    Ms. Kaptur. It certainly does.
    Mr. Chairman, I'll just end with a statement on this first 
round, and that is: when we have spoken to the Secretary about 
this and with Under Secretary Long as well, with her co-op 
responsibilities, but in helping many of these local farmers 
meet the market and bring product to market, if they don't have 
the capital position of a Dole, let's say, think about how one 
could organize a marketing cooperative among farmers market 
masters in the United States. Many of them are up on web sites. 
There is a tomato producer up in lower Michigan who is now 
marketing through the web six tomatoes--sends them out. You 
know, they're really good tomatoes. But, rather than letting 
this so-called catalogue be developed by a Hickory Farms where 
much of the wealth will not go back to the producers, perhaps 
there's a way that USDA through the Farm Service Agency, its 
co-op network, and knowledge of what's happening in these 
15,000 farmers markets could create a new industry across 
markets. And if I didn't have this job, I'd love to do it for 
you. But, I just think there is an enormous power there of 
these producers coast to coast who are smaller and who do have 
great difficulty in getting access.
    Thank you very much.
    Mr. Schumacher. I did ask Mr. Kelly--not anticipating the 
question, Ms. Kaptur, but I did ask Mr. Kelly--coincidently, 
this morning, to have each of his State executive directors and 
county executive directors to talk to each market master in the 
United States and to work on this issue--coincidently.
    Ms. Kaptur. If you need legislative help to do it, let me 
know.
    Mr. Schumacher. Gets going on this.
    Mr. Skeen. Mr. Walsh?

                      Conservation Reserve Program

    Mr. Walsh. Thank you, Mr. Chairman.
    Mr. Under Secretary, administrators: thank you for your 
testimony.
    I have several questions I'd like to ask of Mr. Kelly 
regarding the Conservation Reserve Program. In the spring of 
1996, Mr. Fazio and I wrote to Secretary Glickman regarding CRP 
asking that sufficient acreage be reserved for high-risk, 
priority environmental practices. And in response, the 
Secretary wrote that: ``our letter suggests''--these are in 
quotes--``your letter suggests that 8 to 9 million acres of the 
36.4 million be authorized for enrollment in CRP--that are 
authorized for enrollment in CRP be set aside for the 
enrollment of buffers such as filter strips, riparian buffers, 
and the CRP enhancement program.'' Then he said, ``I strongly 
support such a policy.''
    This statement has important bearing on my support for that 
measure. And since, however, the 16th signup, the Department 
stated that it intends to reserve only 5.5 million acres for 
rural buffers and enhancement. Could you explain what's 
happened since?
    Mr. Kelly. Yes, thank you. My name is Keith Kelly, and this 
is my first time to testify before a congressional committee.
    With regard to CRP and your question, 5.5 million acres are 
set aside for CRP enhancement programs like the one in 
Maryland. And many other States in the Northeast and Midwest 
are coming in with projects. Usually, those buffer zones and 
those types of practices are not large in terms of acres like 
the traditional 15th and 16th signup CRP programs are. And, the 
cost with regard to those particular acres, because buffers are 
very high-value areas, will tend to necessitate smaller 
quantities of land going in there so that we can still protect 
the environment nationwide.
    So 5.5 million acres have been set aside out of the 36.4 
for the enhanced CRP, and we're in a very aggressive program 
with, I think, seven or eight States out there such as 
Minnesota, Washington, and others coming up with programs 
including buffer zones under the enhanced CRP.
    Mr. Walsh. So, you have 5.5 set aside, but there may be 
more?
    Mr. Kelly. There are 5.5 million acres set aside, 
Congressman, for enhanced CRP programs, which could include 
buffer zones; and then, in addition, there's the continuous 
signup, for high priority practices that may include buffer 
zones as well.
    Mr. Walsh. Okay. Just point out that there are estimates 
that as many as half of the States might want to submit 
enhancement programs that could raise between 100,000 and 
200,000 acres of land. Someone in California will probably 
submit even larger numbers for enhancement which would require 
something on the order 4 million acres with another 4 to 5 
million for buffer programs. So, we're back up to that much 
higher figure.
    Mr. Kelly. Congressman, We're looking at 36.4 million acres 
total for the program, and right now a little over 28 million 
acres are enrolled in the CRP. If my math is correct that 
leaves a little over 8 million acres. About 5.5 million are set 
aside for the enhanced CRP, including buffer zones. Again, 
given the acreages required for the enhanced CRP and buffer 
zones they are not going to require as many acres usually. I 
guess we think we can live within our estimates; you've given a 
little bit higher number there than I think we're looking at.
    Mr. Walsh. Just reiterate that I think there's some support 
on the subcommittee for that use as the Secretary, himself, had 
expressed, and we would strongly--I would strongly urge that we 
work with States to meet as many of those demands as we can.
    Mr. Schumacher. We understand, Mr. Walsh, we were, in fact, 
encouraging States to submit applications. And especially we've 
been in touch with New York in the Finger Lakes and in the New 
York watershed to be expeditious in submitting an application. 
We would work with you closely on that, but----
    Mr. Walsh. Yes, these programs will be absolutely critical 
to the success of any watershed protection programs for surface 
water of which--which in the case, for example, of the New York 
City watershed which would save New York hundreds of millions 
of dollars in water filtration and other abatement expenses, 
and, obviously, this treats the symptoms and provides a cure at 
the same time rather than treating it at the tail end of the 
system, we treat it at the head end and do a number of good 
things too.
    Mr. Schumacher. Could we visit? I mean, I think this issue 
is so important in a number of States. Keith and I could visit 
with you in your area and maybe you could also bring together 
Larry Beckhart and the people in the New York watershed who've 
been corresponding with us precisely for that reason, to get 
treatment upstream and save taxpayers' money downstream.

                            DISASTER RELIEF

    Mr. Walsh. Yes, I'd like to do that. One other question and 
that's on disaster relief, catastrophic aid. As you know, the 
Northeast had a very severe icestorm; it affected upstate New 
York, Maine, Vermont, actually, a good deal of Canada; Canada's 
largest natural disaster ever--we can't do much for them. But I 
was wondering what, if anything, you've done in terms of 
disaster relief for New York, Maine, Vermont, Massachusetts 
farmers.
    Mr. Schumacher. I'm going to ask Keith, and also we 
probably----
    Mr. Walsh. With New Hampshire.
    Mr. Schumacher. And New Hampshire, some of Vermont, mainly 
your district in New York was very, very badly----
    Mr. Walsh. Actually, my district was unscathed but 
Congressman McKew and Congressman Solomon were hit pretty hard.
    Mr. Schumacher. Pretty hard. We're delighted that our SED 
for Minnesota was able to fly in some generators, and Keith has 
been working very hard on the disaster situation. It comes back 
to my earlier point, Mr. Chairman, in my testimony, that these 
natural disasters seem to be picking up in different parts of 
the country. We're certainly reviewing our emergency loan 
capability, and we're backing up quite a bit now in our 
applications. So, we may have to come back and work with you a 
little bit on a possible supplemental later on as we get all 
the applications in. Keith, do you want to just expand a little 
bit----
    Mr. Walsh. Well, you kind of anticipated my question. Do 
we--will we expect a supplemental for ag, and, if so, will some 
of this be in it?
    Mr. Schumacher. Well, certainly, we're reviewing this very 
carefully right now. We're gathering all of the applications 
for emergency loans and other concerns. We haven't got them all 
in yet, but as we get them in, we'll then review them, and then 
we may come back to you; some of them are under review right 
now.
    Mr. Walsh. Keith?
    Mr. Kelly. Yes, Congressman. With regard to New York, we 
have approved allocations of $2.6 million under the Emergency 
Conservation Program, and we have pending applications there 
for another $4 million through February 18. So, yes, we're 
monitoring very closely the availability of dollar resources to 
address the icestorm, the storm in New Mexico, and others. 
There was a freak storm in Colorado and Nebraska in early fall; 
a snowstorm that caught some livestock in a mess there. And so 
we are preparing and working very closely, and we are probably 
going to be requesting a supplemental at the appropriate time 
to address this. In total, in the Northeast States, if I could 
just address that part of it, the allocations initially were 
over $5.2 million to address the icestorm that you had just 
several weeks ago.
    Mr. Walsh. You mentioned livestock. That was one of the 
real key problems, because farmers couldn't get their milk to 
market, so you had a lot of sick animals; you had cows go dry; 
you had all kinds of problems plus the loss economics of all 
the lost milk that had to be dumped.
    Mr. Kelly. Congressman, under the direction and the request 
of the Under Secretary, I've put together a group of State 
directors from those Northeast States to look at some options 
that we can bring to you because of the need for disaster 
programs of this very nature, especially for the livestock 
industry--for the livestock caught in the snowstorm or the milk 
that had to be dumped and destroyed. We do not have a very good 
mechanism which really helps them when they take a hit like 
this, and so we're reviewing the situation. I've had a task 
force team working for about a month now trying to put 
together, for the Under Secretary, some things that we can look 
at with policymakers that might make sense on the livestock 
side of the equation.
    Mr. Walsh. Be happy to talk with you about that. Thank you 
very much. Thank you, Mr. Chairman.
    Mr. Skeen. Mr. Fazio.

                      CONSERVATION RESERVE PROGRAM

    Mr. Fazio. Thank you, Mr. Chairman, Mr. Secretary, and 
administrators; good to see you all. I wanted to just follow up 
on a couple of things that Mr. Walsh mentioned.
    First of all, on the Conservation Reserve enhancement 
programs, my information was similar to his if not more 
draconian in terms of the number of acres that had been made available, 
and the demand, I believe, will far exceed what some had estimated 
would be required. Without really engaging, Mr. Kelly, in any further 
discussions, because I think you've responded well to him, I just 
wanted to add my concern as well. We are attempting to change the 
program gradually, broadening its application to States that were not 
traditionally users, and we're going to certainly look forward to more 
applications from those States for purposes that I think we'd all 
generally consider to be totally in keeping with the authorization and 
its purpose.

                            DISASTER RELIEF

    We are, as you know, going through a series of El Nino 
storms in California as well. I noticed you didn't reference 
any estimates for California, but you probably have some, and I 
think they're only getting worse as we speak. Most of the 
levees have held. We haven't had any serious concerns as we did 
last winter with human life and property except in the coastal 
range, but we are seeing a tremendous amount of ag land under 
water. It's going to threaten the orchards, permanent tree loss 
will occur, and an awful lot of crops are going to be laid into 
the ground this year. I'm wondering if you have anything you 
might want to comment on in terms of the impact in Central 
Valley.
    Mr. Kelly. Well, Congressman, I moved here from Arizona 
where some of those same El Nino storms are. The last report I 
recall seeing from our State directors said there was around a 
60-some million dollar loss to agriculture, and the question 
is, whether it comes under the Non-Insured Assistance Program 
or if those are insured crops, and what type of recovery 
there'll be. We probably have the scarcest resources when you 
get into the big ticket items--replacing levees and some of the 
infrastructure that's necessary to put in place. That's the 
dollar drain on some of these type of programs as they get very 
heavy.
    Mr. Fazio. Yes. NRCS may well have some needs in that 
regard, but the Farm Service Agency will be directly involved 
in handling individual disaster claims, I assume.
    Mr. Kelly. Yes, we will. We're working with NRCS on this, 
our sister agency, and, perhaps, Mr. Ackerman on risk 
management; I know that they'll have some involvement.
    Mr. Fazio. Sure, good. Thank you.
    Mr. Ackerman. Mr. Fazio, from the crop insurance side of 
the ledger, we're watching the situation very closely. As Mr. 
Kelly mentioned, most of the damage, as we understand it so 
far, has involved crops that are covered under the NAP program 
such as strawberries, asparagus, and some of the other 
vegetable crops. We're starting to see insured crops be 
affected as well; weed and forage in the Sacramento Valley, for 
instance. My understanding, from what I'm being told, is that 
the next two to four weeks will be very critical for many of 
the insured crops because they're going into the pollination 
period at this point; trees are in bloom for almonds, plums, 
apricots, peaches, nectarines, a number of crops of that 
nature. So, we're watching this very closely, and, obviously, 
we're making sure that the insurance side of the program will 
be ready to react very quickly.
    Mr. Fazio. Well, the inclement weather, as you know, has 
kept pollination from occurring, and we may end up with some 
rotting and some other things, and it could be very, very 
difficult for this year's crop, but in some cases the 
undermining of the orchards occurring, we're going to lose 
trees, and----
    Mr. Schumacher. Well, I think John Smythe has been 
reporting that it's going to be a big issue if these rains 
continue. There's no question about that, Congressman, but he 
said the levees are holding, and then the planting issue that 
you're talking about, well, let's just hold our breath.
    Mr. Fazio. Well, we may get a little break next week, but 
there are people estimating that we've got several more weeks 
of this, and if that occurs, I don't know what anyone could 
have done to prevent not only, ultimately, levees breaking but 
even more--even with the levee system's integrity, just a 
tremendous amount of field flooding that would be impossible to 
prevent. We've got an incredible saturation, at the moment, of 
soil everywhere. It's at record levels, and yet we've done 
fairly well with the levee system.

                             TRADE BARRIERS

    I wanted to talk about the issues related to exportation of 
our crops, and, perhaps, several of you can respond, Mr. 
Secretary. The elimination of tariff barriers resulting really 
from the Uruguay Round and the World Trade Organizations 
existence has resulted in a new problem and that is the 
proliferation of technical trade barriers most of which are 
sanitary and phytosanitary in nature. The Economic Research 
Service has produced a publication that indicates that 
conservatively these are costing American agricultural 
exporters about $5 billion in non-tariff barriers, and I think 
that study is very useful. I wonder if you could comment on it, 
your interpretation of it. I know you were one of those that 
were behind its actual conduct, and it seems to me we've got a 
lot of work to do if we want to avoid having solved one problem 
simply to have it pop up somewhere else continuing to frustrate 
our need to export. This is one of the areas where we have a 
positive balance, and as I think we've all seen in recent 
months and will, I'm afraid, see even more over the next couple 
of years, we're going to be under tremendous import stress from 
Asia. What can we do to help create more export opportunities 
and success?
    Mr. Schumacher. Well, I think that your figures are 
correct. The estimate that we have indicated is about $5 
billion, broken in various categories. Yesterday, at the Ag 
Outlook Conference, I was really amazed, we had a panel and Ed 
Beckman from the California Tomato Commission was there as I 
mentioned--I think we had 400 people come to that panel. Ten 
years ago, no one would have understood what the Codex 
Alimentarious or the National Plant Protection Convention are, 
but now it is right at the top of the agenda. I'm going to ask 
your wonderful colleague, Lon Hatamiya, who I'm just so 
delighted is here from California at the Foreign Agricultural 
Service who is working on this very much to comment further.
    Mr. Fazio. We're happy to have him; local boy makes good.
    Mr. Hatamiya. Thank you very much.
    Mr. Schumacher. He's a vegetable farmer.
    Mr. Fazio. That's right.
    Mr. Hatamiya. Fruit and nut farmer. [Laughter.]
    Let me add to what Under Secretary Schumacher has just 
said. We have an interagency working group in the department 
that deals specifically with the sanitary, phytosanitary 
problems that we're faced with on an increasing level around 
the world. This group meets on a weekly basis to try to address 
these issues and to develop strategies on our best approach to 
leveling the playing field. We recognize that this is an 
important issue. There's also a WTO SPS committee that we're an 
important part of working with our colleagues at the USTR to ensure 
that our concerns are raised at that level through that process. In 
addition, there's a NAFTA SPS committee that we're actively involved in 
that's meeting on a regular basis to try to address the issues among 
Canada and Mexico and ourselves. So, we recognize that this is an issue 
that we have to remain diligent; remain certainly at the forefront to 
express the concerns on the part of this Government.
    I might add, though, that we just recently entered into an 
agreement with Taiwan as part of their WTO accession ability, 
although they have a little ways to go before that happens, 
that includes some concessions in SPS issues, and I think it's 
important that on a bilateral basis we continue to move forward 
in that area. That's why fast track authority is so important 
for us; so we can maintain the ability to negotiate freely with 
our trading partners to ensure that these types of non-tariff 
barriers can be lowered and eliminated.
    Mr. Fazio. I was talking with Charlene Barshefsky and she 
was pointing out the strengths of that Taiwanese agreement 
which has some potential as even a rice exporter in this case 
and my district would be salivating at, but also mentioning the 
potential breakthrough with the Europeans making very clear to 
me, by the way, there was no desire on the part of USTR to 
leave agriculture off the table in our future trade 
negotiations maybe even moving toward a free trade zone with 
the EC. But pointing out, once again, that these are the kinds 
of issues that need to be addressed when we talk with the 
Europeans, because they are just as likely as any to throw up 
these kinds of barriers. But the GAO has also chimed in on this 
issue. What is it that the GAO is saying to you? What is ERS 
saying to FAS in terms of the kind of research you need to do 
to be better prepared to document our case and to target it in 
trade negotiations?

                      improving trade negotiations

    Mr. Hatamiya. Again, I'll refer back to the working 
committee. I think the GAO report recommended that there be 
better coordination among not only USDA agencies but across the 
Federal Government to come up with strategies to best deal with 
these issues. Just this past week, we met interdepartmental-
wise to come up with a strategy of how we look at international 
standards through the Codex Alimentarious and those 
applications through the sanitary, phytosanitary problems. So, 
we're working at a number of different levels to ensure that as 
much information is shared, and I think that's really the key; 
it's communication as well as education of our trading 
partners. They have to be aware of the science-based approach 
that we take; that the issues that we're dealing with are best 
dealt with by educating our trading partners and getting the 
information out there in the most appropriate fashion. So, I 
think that the process we have in place is a good one. There's 
always room for improvement, and we're continuing to push 
forward with these continued sessions and meetings.

                    effectiveness of export programs

    Mr. Fazio. The GAO also has produced a report which raises 
some questions about the effectiveness of our ag export 
programs indicating that there are, perhaps, some that need 
change or adjustment. I've always been a great proponent of our 
export promotion programs, the Market Access Program 
particularly. Your own statistics have shown a 16 to 1 benefit 
for every dollar we invest in programs like this, but there are 
still some doubters and people who are critical of the 
effectiveness, efficiency of some of these programs. We 
continue to have to battle for the authorization and the 
appropriation on the House floor almost annually. Are we in a 
position to defend these programs to our colleagues who don't 
have any agricultural constituency and don't see a direct 
benefit to their constituencies of Federal outlays?
    Mr. Schumacher. Pretty much so. Lon and I are working very, 
very hard to articulate why these programs are so important 
especially with the Asian situation and the competition that 
we're seeing in the southern cone. I said yesterday at the 
Outlook Conference that EU and their member states spend $400 
million trying to counter our very modest $90 million that was 
authorized for NAP which the President's budget proposes to be 
fully funded. Very, very important; I think it works very 
efficiently.
    I'm going to leave tonight to negotiate with the Europeans 
tomorrow. They spend $7 billion in subsidizing horticulture and 
value-added products in their internal EU budget which is now 
$51 billion. Our budget has gone down substantially; theirs' 
has not. I think this is a competitor challenge that we simply 
must address and continue the negotiations in the next round.
    Mr. Fazio. Yes, do you have any comment on this one? I know 
on the wine side alone, wine grape growers are very aware of 
the degree to which the Europeans, particularly, the Germans, 
Italians, and French subsidize theirs while we are constantly 
dealing with amendments to eliminate its application and that 
program's application to wine grape growers.

                         market access program

    Mr. Hatamiya. Let me just address that issue. The MAP 
program or the Market Access Program that you mentioned. We do 
have a level of funding of $90 million, in conjunction with 
cost sharing from many of the companies that we work with; have 
a tremendous multiplier impact upon our exports.
    More importantly, our strategies since 1993 have shifted to 
an emphasis on small businesses. Fiscal Year 1998 will be the 
first year only small businesses can qualify for brand 
promotion under the MAP, and I think it's important that that 
be emphasized with your colleagues; that it's benefiting small 
businesses and small family farmers around this country. Many 
of the cooperatives that exist in our home area in California 
benefit from this, and as you well know, those are made up of 
small family farmers, and I think that has to be driven home; 
that the benefits are being derived there.
    Mr. Fazio. Well, even major corporate exporters derive 
their product, typically, from a lot of small family farmers. 
There's no way to help somebody in the wine grape business 
unless you go through, probably, four or five of the larger 
wineries. They don't have the reach effectively overseas, but 
we may be already about to eliminate those kinds of people from 
participating. It's a great frustration to me, because I know 
the people who get the flow-through benefit of those programs. 
But the GAO seems to be operating on the basis that with the 
World Trade Organization and the Uruguay Round, we won't need 
this anymore; that these are going to be ruled out of order 
somehow by new policies. I think that's totally inaccurate. In 
fact, these are going to be more than ever valued because they 
are still permitted under these new trade agreements. In fact, 
other subsidies have been eliminated, and this becomes, it 
seems to me, the avenue of choice for countries that want to 
help their growers. So, any further comment?
    Mr. Goldthwait. I can add just two comments, perhaps. First 
of all, our market promotion programs are very clearly green 
boxed programs in the WTO meaning of that term which is that 
they're considered to be absolutely allowable across the board.
    Secondly, I would simply comment that all of our programs 
need to be viewed as not static entities but as almost living 
organisms that are subject to constant change as we face new 
circumstances in the world markets. For example, we're using 
our GSM-102 program quite heavily in East Asia right now, but 
at the same time we're looking at making some changes in our 
suppliers' credit guarantee program that will put it in a 
better position to respond to some of the changes in 
circumstances in those markets.
    Mr. Fazio. If I could, in summation, just ask that if you 
could supply for the record whatever information you are in 
possession of in terms of what our trading partners are doing 
to subsidize in every possible way their exporters compared to 
what we're doing if at all, if anything, in comparable areas.
    Mr. Schumacher. We will do that, sir.
    [The information follows:]

[Page 27--The official Committee record contains additional material here.]


    Mr. Fazio. I appreciate that. Thank you, Mr. Chairman.
    Mr. Skeen. Thank you. Mr. Nethercutt.

                              eep spending

    Mr. Nethercutt. Thank you, Mr. Chairman. Good afternoon, 
gentlemen, and thanks for your testimony. I'm interested in 
your responses to the questions presented to you thus far, and 
I hear you say that we have great challenges to have our 
farmers be able to compete with the world market and other 
countries who dramatically assist their farmers and their 
agriculture programs. How much money did we spend on EEP last 
year out of that which was available to you?
    Mr. Schumacher. We can divide that up by category quick. Do 
you want to just amplify on the allocation, or the overall 
export subsidy program?
    Mr. Nethercutt. How much EEP funds? I know about EEP2, but 
I'm talking about EEP.
    Mr. Goldthwait. With respect to EEP, specifically, last 
fiscal year, we did not spend any money.

         foreign market development cooperator program spending

    Mr. Nethercutt. All right. How about with regard to the 
Foreign Market Development Cooperative program? What's your 
budget request this year and how does it compare to last year?
    Mr. Goldthwait. The budget request this year is $22.0 
million, and that compares with an appropriation of about $27.5 
million last year.
    Mr. Nethercutt. So, you're off about $5 million on that 
program? I noticed in Secretary Glickman's testimony of 10 days 
or 2 weeks ago a reduction in agriculture research of about $81 
million, I think it is. I'll be frank with you, it's nice to 
talk about all the needs out there and talk about trying to 
have us compete with the European Union and others for grapes 
or wheat or sales of our product, and I hear you talk about 
GSM-102, but you're cutting in research, you and the 
administration, you're cutting foreign market development; you 
don't use EEP; we have to fight for MAP which is great, I'm 
with you on that fight. There's a disconnect here, gentlemen, I 
think.
    If I can be so bold as to say our farmers out in my State 
of Washington realize there's a cooperation here that has to 
exist between the federal government and the new market-
oriented farm program that we're all struggling to have 
implemented properly, but actions, I think, speak louder than 
words, and I think the actions that I've seen at least in the 
budget side don't match the words, and I say that to you very 
respectfully. I know you're trying to do your jobs, and maybe 
you're getting squeezed by the Office of Management and Budget, 
but GSM-102--I was reading letters to the Secretary with regard 
to our relationship using that credit program for Pakistan. I 
had to fight with you to get--with all due respect, you, the 
administration--to get you to use that credit. We're having a 
suppression of the wheat price out in my State. We got problems 
in California weatherwise and otherwise. How do you explain 
this? I mean, I'm being real frank with you about how I see 
this, and I hear you, but I think, again, actions, I think, 
speak louder than words. I need to give my farmers some 
assurance that the Government is on their side whether it's 
through credit programs or using EEP funds or pushing the 
credit or, certainly, funding research. What's your response?

                          U.S. export programs

    Mr. Schumacher. This seems to be wheat day. My wife asked 
me to wear my wheat tie today. We had a wheat farmer in this 
morning from Montana--Bill Flore--came in to see me, and we 
spent a very productive hour and a half this morning. Quite 
frankly, Mr. Nethercutt, dairy and wheat are our two most 
difficult issues right now. I spent a lot of time personally in 
the northern plain States working on wheat. Mr. Moos, my 
predecessor, worked very, very hard on wheat for many, many 
years. Bill and I talked about a range of things we need to 
look at and EEP is a difficult one, and I'll address that in 
one minute.
    But I think one of the things we really worked hard on is 
to look at all of the tools that Congress provides us on 
exports, and, yes, we have a smaller proposed budget on the 
Cooperator Program, and we're looking for a little more cost 
sharing, and that's a proposal that we've put out. On the 
overall issue, though, we looked at the Korean situation and 
the Asian situation very, very hard, and we decided that at 
this time the GSM credits was the tool of choice because of the 
liquidity problem. We've spent about $36 million already on 
that and certainly our friends in Australia have made it very 
clear that they think that wasn't a very wise use of the tool 
you have provided us. We think it was a very wise use; we did 
it in a timely fashion, and we are working very, very hard. I 
think the access we're getting now in Indonesia will improve 
once those economies recover. Now, in the Philippines, there's 
the largest wheat market in Indonesia which blew them out of 
the monopoly business, and the security we've given our Korean 
friends and the reliable supply of our food will be very 
helpful.
    On the EEP, we have not used that, and we just haven't 
felt--and Chris can follow up--that market conditions since 
July of 1995 have called for the use of EEP. We're also going 
to work very hard on credit. Keith and I are looking--as some 
of the northern plains wheat growers are having some 
difficulties--to be quite flexible in looking at the credit 
needs to get them through these difficult areas. We've a number 
of issues we've discussed from this morning; we can discuss 
that in detail.
    Chris, do you want to follow up on the EEP which is the 
most difficult one and one that is causing some pain in the 
northern plain States. We hear about it very frequently.

                               use of EEP

    Mr. Goldthwait. Yes, I'll make a comment about EEP, and, 
maybe, perhaps, one also about Pakistan which you raised, 
specifically. With respect to EEP, again, it's one of several 
tools and depending on what the problem in the world market is, 
we choose one tool or another tool to try to address that 
problem. As we have looked at the world market situation over 
the past couple of years, we have not seen that we would 
actually be able to get additional market share or increased 
prices for our producers by the use of EEP under the existing 
market circumstances. That could change if the European Union 
were to take a much more aggressive posture with their own 
export subsidies.
    Mr. Nethercutt. Have they, sir? I mean, have they not 
historically in the recent several years taken a more 
aggressive approach?
    Mr. Goldthwait. The policy that they have followed over the 
past year, year and a half has been relatively less aggressive 
than the policies they followed three or four years ago. So, we 
think it's important to have EEP there as aresource in the 
event that those market conditions change and we should see that it's 
going to have the intended impact of helping our producer prices if we 
use it.
    Mr. Nethercutt. What would trigger your using it? What 
market conditions would be necessary before you would say, 
``Now's the time.''
    Mr. Goldthwait. I think if we saw substantially larger 
quantities of subsidized wheat moving into world markets than 
we have seen in recent months. That would be a very important 
circumstance.
    Mr. Nethercutt. Is there a standard? I mean, is there a 
trigger?
    Mr. Goldthwait. We look at a number of things. We look at 
whether we'll get additionality. We look at whether we'll lose 
any market share dramatically. We look at world prices; whether 
we're going to have a beneficial or a harmful effect on our own 
producers prices.
    With respect to Pakistan, I might just note we have tried 
very hard to use a combination of programs in Pakistan. In 
fact, I even visited Pakistan in December to get a first hand 
look at the situation there, because they're quite an important 
market for us, and during that period of time that you referred 
to, when we found that because of the creditworthiness 
requirements of the authorizing legislation for GSM, we could 
not make as much credit immediately available as we would have 
liked to, we used P.L. 480, and we couldn't take up the entire 
gap, but we made the largest allocation in fiscal year 1997 of 
P.L. 480, title I, funding to Pakistan.

                     reduction in p.l. 480 funding

    Mr. Nethercutt. Is there not a reduction in P.L. 480 
funding for 1999 by like 50 percent?
    Mr. Goldthwait. There is a reduction in P.L. 480 in the 
title I area. Across the board, it's much less than 50 percent.
    Mr. Schumacher. Is it the same than for 1999 as 1998? Am I 
not correct?
    Mr. Goldthwait. That is correct for titles II and III.
    Mr. Rogers. Yes, it is the same level.
    Mr. Nethercutt. I understand, but title I's down about 50 
percent. I don't mean to try to cause you problems, I just--
seriously, I think there's a perception out there, at least in 
my part of the world that there needs to be a balance between 
the department's engagement in this whole new concept of 
market-oriented farming, and there seems to be--and I 
appreciate your explanation--but there seems to be a lack of 
timeliness, for the department to engage itself and really work 
hard to make sure our farmers aren't disadvantaged. And in 
farming work, if you lose a market, you lose a market. Then 
it's too late to look and see what the markets are. I think 
there has to be some anticipation on our part as a Government 
to try to help our farmers, because our farmers don't have two 
years to wait for markets to come around. They need Government 
assistance with marketing when they need it.
    And I'm really bothered by the research part of it--again, 
respectfully to you the administration; I don't know if it's 
coming out of your agency, necessarily, but at least, in 
effect, there's a reduction in research. I think that's the 
worst thing that we can do when the Europeans and other foreign 
governments are providing tremendous amounts of research 
funding. I met with some of pea and barley guys this morning 
who say, ``Here's the numbers. Look at what Australia and 
others are doing in terms of their research on just peas 
alone.'' It's far out-stripping ours. So, I think that's a 
necessary component of successful farm policy that I think we 
can't overlook. It's not necessarily your area, but I'm sure 
going to look hard at this budget and try to increase ag 
research for our farmers, because I think they must have it. 
Thanks for your time. Thank you, Mr. Chairman.
    Mr. Skeen. Mr. Bonilla.

                           fsa county offices

    Mr. Bonilla. Thank you, Chairman, gentlemen. I'd like to 
start out with the problems that I have with the Farm Service 
Agency in my congressional district in the last year and a 
half. They've been very serious problems, in particular, in one 
county, in Reeves County, and I know the Inspector General's 
involved in trying to get that resolved, hopefully, any day 
now, as a matter of fact. Now something else has popped up in 
the County of Medina, a very heavy agriculture production area. 
I'm told that more than 400 payments are now being held up, and 
I'm very concerned. First of all, is this a problem that you're 
seeing in other FSA offices around the country? Is this 
becoming more prominent now or do I just happen to be getting 
the brunt of these problems in my congressional district?
    Mr. Schumacher. We're certainly aware of the issue in 
Reeves County. I think the Secretary dealt with that to some 
extent; Keith can follow up. But Medina came to our attention 
quite recently. Keith, do you want to respond to that?
    Mr. Kelly. Yes, Congressman Bonilla, what we are doing 
there is not system-wide but because we are shifting resources. 
I know we were operating without a county executive director in 
charge of that office area with some of the cutbacks we've gone 
through and having to fill some vacancies, but in the interim 
we are shifting resources from adjacent counties and from the 
State office to get on top of the problem that's happened in 
that particular county.

                         advance amta payments

    Mr. Bonilla. The State has requested that they be allowed 
to receive the remainder of their advanced payments once each 
producer files or gets their eligibility documents in. Is that 
going to be possible? That they'll receive their payments?
    Mr. Kelly. Sir, would you please repeat the question, 
because I'm still missing out on that one.
    Mr. Bonilla. The State has requested that they be allowed 
to issue the remainder of advanced payments one each producer 
has filed their eligibility documents. Would you allow the 
State of Texas to do this?
    Mr. Kelly. I think to be safe on this, I would like to get 
back with you within the next few days on this particular 
question with regard to the advance payments, because having 
just been made aware of what the issue is, I'm at a little bit 
of a loss as to what to respond to you right now.
    [The information follows:]

                         Advance AMTA Payments

    Advance payments to Production Flexibility Contract holders 
are currently paid on December 15 or January 15, at the 
producer's discretion. The law does not allow for advance 
payments to contract holders at any other time. USDA is 
proposing legislation that would relax this restriction by 
allowing contract holders to request advance payments any time 
from November 1 through August 1 of the fiscal year. This would 
provide much greater flexibility for contract holders who were 
unable to finalize farm plans prior to January 15. Final 
payments are made to contract holders at the end of the fiscal 
year.

    Mr. Bonilla. I appreciate that, and I also appreciate just 
from your earlier comment that there's a lot of attention being 
paid to these farmers in Medina County and, hopefully, we can 
get through this as quickly as possible.

                         Agricultural Mediation

    I only have one other question. As you know, you did not 
approve the Texas Agriculture Loan Mediation Certification 
program last time around, so now all mediation in Texas is put 
on hold and has been severely delayed. I'd like to know what 
steps have been taken and what progress has been made to ensure 
that Texas producers will continue to have access to mediation 
even though this program has been discontinued?
    Mr. Schumacher. That's been a very difficult situation in 
Texas. Keith, do we have a new approach we're taking on that?
    Mr. Kelly. Yes, Congressman. With regards to Texas, as 
you're well aware, we've really suspended the mediation program 
with a particular institution that was doing the mediation 
before. We did offer to Governor Bush to work with any 
institution that wanted to step up to do the mediation program, 
to be the cooperator down there. Nobody really has stepped 
forward at this point, so we directed the Texas State office to 
pick up the whole ball on mediation, especially for those cases 
that are mandatory--there's mandatory and then there's some 
voluntary mediation. I think it's at the end of this week that 
the Texas State office will be giving a plan back to us on how 
to catch up on the mediation that they inherited from the 
particular institution that was put on suspension at the 
request of OIG.
    Mr. Bonilla. Very good. I appreciate that very much. I have 
no further questions. Thank you very much, gentlemen. Thank 
you, Chairman.

                          disaster assistance

    Mr. Skeen. Thank you. Mr. Kelly, I want to tell you how 
much we appreciate the help that we got during the situation in 
southeastern New Mexico or all of southern New Mexico, because 
anytime you pile three foot of snow up on the flat plain over 
there you've got a real problem. You handled it very well, and 
I understand that you're also expecting to discuss the relief 
efforts that's in the New Mexico area.
    Mr. Kelly. That is correct, Congressman. We're trying to 
work hard with your office and be swift to follow up, because 
as I've discussed with the Under Secretary, the livestock 
industry is about one-half of our agricultural economy in this 
State, and it appears to me that we do not have a true 
mechanism to address bona fide disasters. What we did in New 
Mexico was use the remaining allocation for the Disaster 
Reserve Assistance Program. That money from the sale of 
disaster reserve grain is gone when it's gone, because we have 
sold the last of that reserve. So with the objective of almost 
a cost benefit study, we put $7 or $8 into feeding each animal 
in the hopes of not later paying for deceased livestock. I 
really want to visit with those New Mexico producers after the 
disaster's behind us and find out what would work better or 
what we could do better. We did a cost share on the feeding 
assistance to try to feed the cattle that were in dire need of 
nutrition right away.
    Mr. Skeen. This is a whole new area of that question of 
disasters as I understand it. We haven't covered that ground. 
Yes?
    Mr. Schumacher. Keith and I were trying to discuss this 
with the Secretary and the administration. I think half our 
receipts in this country in agriculture are from livestock. 
Hundreds of thousands of cow, calf, sheep, and dairy operators 
are, perhaps, not as well covered in our safety net, 
particularly for disasters that are unforeseen. When you and I 
talked on the phone several times, it was unforeseen that we 
would have so much snow in your district; unforeseen that we'd 
have the biggest icestorm of a hundred years in the Northeast. 
Will there be other unforeseen tornadoes? Two of them came 
through Florida last night. These are all very unforeseen. I 
think we just need to think through a little bit more how we 
buffer the very critical livestock industry from these 
unforeseen disasters.
    Mr. Skeen. I understand that and appreciate very much the 
statement and also the ability to be flexible enough to take 
care of events in this weather picture that we've been 
undergoing here in the last few months with El Nino. I don't 
know why they call it El Nino. El Nino is a little bitty 
character. This has gotten to be real big, but I do want to 
tell you that we do appreciate your quickness and 
responsiveness under terrible budgeting problems that go along 
with it; how you react and still stay flexible. I know that in 
California and some of the other areas where we've had this, 
you quickly adapted yourself to the situation. I have no 
further questions. Mr. Walsh? You can be the clean up batter 
here.
    Mr. Walsh. No, thank you.
    Mr. Skeen. Where have you been?
    Mr. Walsh. I'll defer back to you, Mr. Chairman.
    Mr. Skeen. Thank you very much, ladies and gentleman. We 
appreciate very much the work that you do, and we hope that we 
get a budget up here before long that reflects the kind of help 
that you need, and we do appreciate the kind of attention and 
work that you do. We're adjourned.
    [Clerk's note.--The following questions were submitted to 
be answered for the record.]

[Pages 35 - 673--The official Committee record contains additional material here.]


                                           Tuesday, March 10, 1998.

                   FOOD SAFETY AND INSPECTION SERVICE

                               WITNESSES

CATHERINE E. WOTEKI, UNDER SECRETARY
CAREN A. WILCOX, DEPUTY UNDER SECRETARY
THOMAS J. BILLY, ADMINISTRATOR
WILLIAM WEST, ASSISTANT DEPUTY ADMINISTRATOR FOR MANAGEMENT
STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

                            Opening Remarks

    Mr. Skeen. The committee will come to order. We're on 
record.
    Good afternoon.
    Dr. Woteki. Good afternoon.
    Mr. Skeen. Today, we have before the subcommittee the Food 
Safety and Inspection Service of the Department of Agriculture, 
FSIS, as it's known by. FSIS has one of the most critical 
missions in the Federal government, ensuring the safety of our 
supply of meat, poultry and eggs and also managing the biggest 
change in meat and poultry inspections since the Federal 
government got into that business, and they are an essential 
part of the new Food Safety Initiative.
    FSIS is operating this fiscal year on a budget of about 
$590 million in appropriated funds. For next year the official 
request is for about $150 million. That's $440 million less and 
the Administration says it's going to makeup the difference and 
then some with user fees.
    So Madame Under Secretary, I think I can say right here and 
now that you will get your full request for the fiscal year 
1999, just under $150 million, no problem. I also want to wish 
you well in getting that user fee legislation passed and all 
the regulations written by October 1.
    The Administration has already budgeted the user fee 
revenue for increases in WIC, and research, for the Inspector 
General, for salaries and expenses and a lot of things. If we 
have to find more money for FSIS because user fees didn't 
happen, we're going to refer the phone calls from all those 
people who thought they were getting more money to your office.
    Is that all right?
    Dr. Woteki. Why certainly, sir.
    Mr. Skeen. We have a lot to discuss besides user fees, so 
Madam Under Secretary, please introduce your colleagues, make a 
statement for the record and then we'll have some questions.
    Dr. Woteki. Thank you very much, Mr. Chairman.
    Mr. Skeen. Welcome to all of you.

                           Opening Statement

    Dr. Woteki. Thank you. I'd like to introduce those who are 
accompanying me today. With me are Deputy Under Secretary for 
Food Safety, Caren Wilcox sitting to my right, your left; FSIS 
Administrator Mr. Tom Billy who is sitting to my left and your 
right; USDA Budget Director, Steve Dewhurst, who I do not need 
to point out to you.
    Mr. Skeen. Absolutely not.
    Dr. Woteki. And Mr. Bill West, at my far right who is 
representing our budget office.
    Mr. Skeen. Welcome to all of you.
    Dr. Woteki. Before I begin, I would like to first of all 
thank you and other members of this subcommittee for acting 
favorably on our FY 1998 budget request. The funding that has 
been provided for us this year has been extremely helpful to us 
in fulfilling our fundamental mission in assuring the safety of 
the meat and poultry and egg products supply in the United 
States, and also as you referred to in your opening comments, 
in implementing a new approach to improve on the safety of 
those food products.
    I have prepared written testimony, as has Mr. Billy and we 
both respectfully request that that be submitted for the 
record.
    Mr. Skeen. It will be so done.
    Dr. Woteki. And what I would like to do, sir, since this is 
the first time that I'm appearing before you in this capacity, 
representing Food Safety, is to begin by talking briefly about 
the mission as I see it and then to talk more specifically 
about our budget request. I'd like to summarize my remarks.
    Mr. Skeen. Any way that you'd like to do this why, it's all 
right with us.

                     Broader Food Safety Challenges

    Dr. Woteki. Okay. As you're very much aware in report 
language that accompanied the Department of Agriculture 
Reorganization Act of 1994, one of USDA's basic missions is to 
ensure the safety and quality of the nation's food supply.
    Congress created this separate Subcabinet office to lead 
the effort to reform our food safety programs. And it's my goal 
as Under Secretary, first of all, to focus on long term 
planning and policy development and on our legislative program 
to ensure food safety. Secondly, on oversight of the Food 
Safety and Inspection Service, and thirdly on providing general 
assistance and advice regarding food safety issues, as the 
Secretary of Agriculture requests that I do.
    My office has broad responsibilities in food safety, as 
well as very critical responsibilities related to the safety of 
meat, poultry and egg products. Two examples of these broader 
responsibilities are leadership in the international Codex 
Alimentarious Commission and an important role for us in 
coordinating the United States' position on international food 
safety issues. That's required us to work across commodity 
lines, beyond meat, poultry and egg products as well as to work 
cooperatively with the private sector and other federal 
agencies that have interest in food safety.
    A second example of these broader responsibilities is the 
leadership for the President's Food Safety Initiative within 
the Department of Agriculture. This has required us to work 
across virtually all of the mission areas within the Department 
to coordinate our activities, as well as to work closely with 
the Department of Health and Human Services, the Environmental 
Protection Agency and other interested organizations.

                         Farm To Table Strategy

    Our responsibility for safeguarding the nation's meat, 
poultry and egg supply is really our central responsibility and 
we've come to recognize that not all contamination of meat and 
poultry and egg products occurs either in the slaughter or 
processing areas which we regulate. It can occur during animal 
production, during storage and transportation as well as during 
distribution. Contamination can occur at the retail level, in 
restaurants and stores, as well as in the home. Because of 
this, we've taken a farm to table approach in the development 
of our strategy to further assure the safety of meat, poultry 
and egg products.
    The President's Food Safety Initiative, both in FY 1998 and 
in 1999 also embraces this farm-to-table approach. It focuses 
on research and on education and training, on surveillance, 
risk assessment, on improved inspection as well as on long-term 
planning. Another focus of the President's Food Safety 
Initiative is the building of partnerships to further all of 
these areas. One example of a very successful partnership that 
we've initiated under the President's Food Safety Initiative is 
the ``Fight BAC'' educational campaign. We've used some of the 
funds appropriated to us in FY 1998 as have other federal 
agencies to help the partnership in the distribution of 
educational materials that have been developed. This is very 
much a partnership, a private/publicsector partnership, 
consisting of industry, consumer groups as well as government agencies.

                      Inspection Responsibilities

    I'd like to turn now to emphasizing our commitment to 
fulfilling our basic mission, ensuring the safety of the 
nation's meat, poultry and egg supply. Protection of the public 
health is our mandate and that is really the guidepost for all 
that we do. Of course, our primary vehicle for meeting our 
responsibilities is the in-plant inspection and the oversight 
of these specific products.
    As you indicated in your opening comments, we've begun the 
first phase of our new meat and poultry inspection system, 
based on hazard analysis and critical control points. A little 
over 300 plants began to implement this new approach in January 
of this year. These plants account for about 75 percent of the 
meat and poultry slaughtered in the United States.
    I'm pleased to report to you that from our perspective, we 
believe that HACCP implementation is going well. HACCP 
implementation though is an on-going process that we recognize 
is going to require fine tuning in the weeks and months ahead. 
And I think that this is to be anticipated and to be expected, 
given the complexity of the change that has been undertaken 
both within those plants that have begun implementation of 
HACCP, as well as by our inspectors who are stepping into their 
new roles.
    I'd like to assure you and Members of this committee that 
the Food Safety and Inspection Service is committed to working 
out any problems as they arise in implementation of HACCP and 
is firmly committed to using a common sense approach to problem 
solving.
    HACCP implementation will be continuing over the next two 
years as small and very small plants begin to come on-line in 
January of next year and January of 2000. These smaller plants 
are going to encounter some unique problems, and the Agency has 
been working closely with small plants, both through 
demonstration workshops in which 380 small plants have already 
participated, as well as through providing educational 
materials, technical materials, software, video information, to 
help small plants in preparing their own HACCP plans.

                   Government Performance Results Act

    I'd like to note two items that I know are of interest to 
the subcommittee. One is how we are implementing our 
responsibilities under the Government Performance and Results 
Act. Our goal as stated in our strategic plan is to enhance 
public health by minimizing food borne illness from meat, 
poultry and egg products. To accomplish that we have multiple 
objectives that include pathagen reduction, implementing the 
President's Food Safety Initiative, implementing our farm-to-
table strategy and fostering cultural change within the 
industry, as well as cooperating internationally to improve the 
safety of food.

                          Year 2000 Conversion

    The second issue that I know is of concern to this 
committee as to others as well is how we're addressing the Year 
2000 problem. Food Safety and Inspection Service began working 
well over a year ago to ensure that its information technology 
systems are prepared to support the inspection program 
successfully as we transition into the Year 2000. We've 
designated eight of our automated information systems as 
critical to our mission and we've been working to make them 
Year 2000 compliant within our existing resources. We're 
scheduled to have those completely implemented by March of 
1999.

                          1999 Budget Request

    Finally, turning to our budget request, the budget proposes 
a program level of $709 million, which is a net increase of $34 
million over our 1998 current estimate. I might point out to 
you, Mr. Chairman, that our staff resources will be maintained 
at the current levels. The budget includes programmatic 
increases to build on our investments so that we can continue 
to implement the HACCP system. It also includes programmatic 
increases to support the President's interagency Food Safety 
Initiative.
    That Food Safety Initiative is $101 million government-
wide, for which $11 million is requested for FSIS. There are a 
number of high priority food safety activities that provide an 
integrated approach to reducing food borne illness and FSIS's 
contributions within the President's Food Safety Initiative 
will facilitate the transformation of State programs to Hazard 
Analysis Critical Control Point Systems by the Year 2000. Those 
funds would also be used to expand consumer education, and to 
develop voluntary measures to reduce the risk of pathogenic 
contamination of animals on the farm, as part of our farm-to-
table strategy.

                           User Fee Proposal

    In the very near future, the Administration will be 
transmitting to the Congress the legislation necessary to 
support the 1999 budget proposal to recover the full cost of 
providing federal meat, poultry and egg products inspection 
through user fees. Requiring the payment of user fees for the 
federal inspection services would ensure that sufficient 
resources are available to provide the mandatory inspection 
services needed to meet industry demand.
    We've estimated that the overall impact on prices as a 
result of these fees will be less than a penny per pound of 
meat, poultry and egg products produced. The implementation of 
the user fee would be designed to be fair and equitable, to 
promote accountability and efficiency and also to minimize the 
impact on the competitive balance among the affected 
industries. As you had indicated, we've requested about $150 
million in appropriated funds to convert the Federal program to 
user fees and also for maintaining our obligations under the 
State inspection program.
    Thank you once again for the opportunity to appear here and 
to discuss our goals to enhance food safety. I'd be happy to 
answer any questions. My colleagues here are prepared as well.
    [Clerk's Note.--Dr. Woteki's written testimony appears on 
pages 783 through 793. Biographical sketches appear on pages 
781 through 782. The Food Safety and Inspection Service budget 
justification appears on pages 819 through 881.]

                     Regulatory Inspection Changes

    Mr. Skeen. I'll lead off. Before HACCP began, there was 
much discussion about how quickly it could be implemented to 
replace the old system or whether the new one would simply be 
layered on top of the old. What remains of the old system in 
the plants where HACCP is being enforced?
    Dr. Woteki. This question of ``layering'' is one that comes 
up very frequently. As you're well aware, we have committed to 
a major review of our regulations as HACCP is implemented. And 
we are continuing in that review. We began last summer with the 
publication of new rules, essentially eliminating the 
requirement for review of blueprints of facilities and 
equipment. We view that as being a major down payment on our 
promises to continue in the review of our regulations. So as a 
general issue, we are firmly committed to reviewing our current 
regulations and streamlining them to the fullest extent 
possible.
    I'd like to ask Mr. Billy to comment specifically on the 
implementation within HACCP plans.
    Mr. Skeen. Thank you. Yes, Mr. Billy.

                          HACCP Implementation

    Mr. Billy. Thank you, Mr. Chairman. We are changing our 
fundamental approach to inspection with the advent of HACCP, 
given the fact that only 300 plants now are under mandatory 
HACCP. There are 6,000 plants that remain under the traditional 
inspection program.
    Mr. Skeen. The old system.
    Mr. Billy. The old system, except for the sanitation 
standard operating procedures in all plants and the requirement 
that slaughter plants do E. coli testing.
    Mr. Skeen. I see.
    Mr. Billy. In those areas, we have, in fact, shifted to a 
new way of carrying out our inspection activities. 
Historically, under our control system where we assign tasks to 
inspectors, we had about 550 tasks that they would carry out 
systematically over time to determine whether a plant was in 
compliance with the regulatory requirements.
    Under the new HACCP approach there will be 49 procedures 
they will carry out, a totally different approach. They stop 
doing the old way. They start doing the new way under HACCP. So 
as we continue to implement HACCP next year in the small 
plants, the year following in the smallest plants, that 
transition will be complete and we will be under the new HACCP-
based approach.
    Mr. Skeen. As you phase the other one out, you have a clear 
definition of--from one technique to another?
    Mr. Billy. Yes, that's right.
    Mr. Skeen. You continue to do the old one as you phase it 
out and bring the new one on. You don't mix the two.
    Mr. Billy. That's right.
    Dr. Woteki. That's correct.

                     carcass by carcass inspection

    Mr. Billy. The other area where we continue to carry out 
essentially the same functionsis in the area of carcass by 
carcass inspection in slaughter plants. It is in that area that 
we have announced and are now in the process of implementing 
some pilot studies to explore how we can modify that part of 
our inspection activity in slaughter plants. In fact, these 
studies will determine the extent to which we can shift some of 
the sorting activities we now carry out to the plants and free 
up some of our inspection resources for some of the HACCP tasks 
and some of the other farm-to-table areas we want to focus on 
from a food safety perspective.

                          haccp implementation

    Mr. Skeen. Does the phase in cause the operators any 
problem? Are they complaining about it or are they working the 
system through?
    Mr. Billy. We've gotten just a few complaints. Over a year 
ago we implemented the sanitary SOP requirements and the E. 
coli testing requirements. In the 13 months since, we've had 
significant problems with only 95 plants. That's 95 plants out 
of 6,000. So I would characterize that as not a major problem.
    Mr. Skeen. Not significant.
    Mr. Billy. Now the fact is, there's a major culture change 
going on, so while our training is focused specifically on that 
in teaching our inspectors their different roles, both in 
sanitation and in HACCP, not everyone gets it perfectly the 
first time within our agency, nor in industry. I view it as a 
work in progress and we've been meeting with industry weekly 
since the HACCP implementation began to identify problems and 
then address them.
    Mr. Skeen. Both the operation and the inspectors are all 
working together and when a problem arises, you work it out 
together.
    Mr. Billy. That is our commitment and our intent and we're 
working very hard to make that happen across the board.
    Mr. Skeen. I don't see that there's going to be a lot of 
quarrel when you get through the thing. Usually, these things 
are very difficult.

                 government performance and results act

    Congress and the Administration are both required now to 
measure the performance and the results from the expenditure of 
the public money and you mentioned this in your testimony. What 
results are we getting for the money provided this year and 
what are your targets for next year?
    Have you pretty well covered that in your opening 
statement?
    Dr. Woteki. Yes, I believe I did, sir. Our goal though, 
within our strategic plan, as I had indicated, was to enhance 
public health by minimizing food borne illness from meat, 
poultry and egg products, and we've set for ourselves the 
objective of reducing food borne illnesses by 25 percent by the 
Year 2000. So that's the specific measurable objective that 
we're aiming towards.
    Mr. Skeen. That's very good and I would like to compliment 
you two on this, from farm to table, atmosphere that you're 
going to work with because I think that's one of the problems 
we have, we have good inspection system, but also we've come to 
rely on it to the point where we're not too careful about what 
we do in the home with these foods and I think that's a very 
important aspect of the thing. I congratulate you on adding 
that increment to the overall picture.

                       state inspection programs

    Why are you requesting a waiver of the limit of 50 percent 
of Federal funding for cooperative programs with the States. 
Can't the States share their costs equally? What's the problem 
there?
    Dr. Woteki. We're requesting that waiver in one specific 
area and that is to increase the Federal contribution that will 
go towards special assistance for the States in implementing 
HACCP, including the information management system that goes by 
the title FAIM.
    Mr. Skeen. What does that mean?
    Dr. Woteki. It is the Field Automation and Information 
Management project. It's essentially the software with the 
computers that we're providing to our inspectors to help them 
to do their jobs and also to help them communicate with us and 
for us to communicate with them.
    We believe that it will be a major assistance to the States 
that operate their own inspection systems to also be using this 
same software, and as an incentive to the States to adopt this 
software we're proposing that the federal contribution for that 
be raised to 75 percent.

                     progressive enforcement action

    Mr. Skeen. Under the progressive enforcement action, a 
plant can be noncompliant with your regulations and remain in 
production for 180 days. That could represent a significant 
volume of product that's going on to consumers. Should that 180 
day period be shortened to give the consumer more protection?
    Dr. Woteki. I'd like to ask Mr. Billy to respond because 
this gets into enforcement.
    Mr. Skeen. Thank you.
    Mr. Billy. Thank you, with the advent of the HACCP and 
pathogen reduction regulation and the shift to sanitation 
standard operating procedure systems approach, as well as 
phasing in HACCP, progressive enforcement falls by the wayside. 
It is being replaced by the systems approach that's represented 
in that new regulation where we will look to the plants to 
carry out a sanitation plan and a HACCP plan and we will be 
verifying that they're following that plan. When they're not, 
we will take action to, as appropriate, issue noncompliance 
reports and if there's an accumulation ofthose, then we will 
start the action to withhold the mark of inspection until a 
modification to their appropriate plan is made to assure us that they 
can live up to their obligation.
    Mr. Skeen. The 180 days is a fair amount of time.
    Mr. Billy. It's become moot. It's going to fall by the 
wayside.
    Mr. Skeen. Thank you. Ms. Kaptur?
    Ms. Kaptur. Thank you, Mr. Chairman. I want to welcome Dr. 
Woteki and Mr. Billy and all of your associates to the 
Committee this afternoon.

                  foodborne illness from campylabacter

    I wanted to ask Dr. Woteki or Mr. Billy, have you been at 
all surprised at the recent stories and reports that have been 
done about the poultry industry and the campylobacter percent? 
This is 1998, almost a century after we had all the revelations 
in the meat industry and you would think this would be one 
thing we could fix if we could put a man on the moon. What is 
going on in this industry here in this country?
    Dr. Woteki. No, I'm not surprised by the recent findings. I 
think you're probably referring to the recent Consumer Reports 
article about bacterial levels that are associated with 
poultry. Our own surveys and studies that had been done earlier 
had indicated even higher levels of campylobacter present on 
poultry carcasses that were tested.
    We're also learning more from the active surveillance 
program that the Centers for Disease Control is conducting to 
try to get a better understanding of food borne illnesses and 
their causes. CDC tells us that campylobacter is identified in 
about 46 percent of the diarrheal cases that are being detected 
in this active surveillance system. So it is a major cause of 
food borne illness in the United States and, as I said, the 
recent findings don't surprise me.
    Ms. Kaptur. I'm not a scientist on this. What's going on 
with that? What is it? A virus? It's a bacteria?
    Dr. Woteki. It's a bacteria.
    Ms. Kaptur. What's going on with that? Where does it come 
from; the inside of the poultry to the outside? Is it that 
they're grown in cages and they're close together? Where is 
this stuff coming from? It doesn't come from my refrigerator, 
right?

                          cross contamination

    Dr. Woteki. When it comes into your home it has probably 
come on a piece of food that you have purchased and brought 
into your home.
    In the home, however, because of the many practices that we 
have, we can cross contaminate food that has been brought in 
and prepared with a knife and a cutting board. Then that knife 
and cutting board being used for preparing a salad or some 
other type of food product can cross contaminate other foods. 
But you're correct that most of the food borne illnesses that 
are traceable to food that's prepared and consumed at home, 
have come into the home on that food.

                        source of contamination

    Ms. Kaptur. Now 46 percent of these intestinal conditions 
are caused by that particular bacterium. Knowing all you do 
about this industry, before it gets to the home, where would it 
come from in most cases?
    Dr. Woteki. Mr. Billy, you wanted to respond to this 
question.
    Ms.  Kaptur. What's going on?
    Mr. Billy. A lot of it originates during production and is 
carried with the birds into the slaughter operation. There's an 
extensive amount of research going on in ARS currently, 
primarily in Athens, Georgia to get a much better understanding 
of where that organism is coming from and how it's spread so 
widely in terms of the birds that are arriving at the slaughter 
plant and then further processed.
    Ms.  Kaptur. Sir, could I ask you if you will just look 
back though and help us in understanding, would this percent 
have been the same in 1950 and 1930? Has something happened of 
late?
    Mr. Billy. I don't think we know the answer to that. One of 
the problems we have is that because of the nature of the 
organism, it's a very difficult organism to sample and analyze 
for, and it's very expensive to do a test. It can cost anywhere 
from $300 to $500 to do one sample and that's been a 
significant deterrent both to regulatory activity as well as 
research in this area because of the high cost. So part of the 
President's Food Safety Initiative is to fund additional 
research to develop new reliable, much lower cost tests that we 
can all use to get a better handle on this organism.
    One other thing I wanted to emphasize is that the good news 
in a sense is we're just now phasing in HACCP, so we expect the 
HACCP system to have significant impact in terms of the 
presence of organisms like campylobacter. That plus the new 
sanitation approach that we're taking, we think, will make a 
big impact in terms of this organism, salmonella and other 
organisms of concern. We're just getting started, so we need to 
build the data now because of these new systems and approach 
that industry is implementing, and we're monitoring and 
verifying to see that, in fact, they have the impact that we 
believe they will.

                        antibacterial resistance

    Dr. Woteki. One footnote also to add is that as Mr. Billy 
said, it's hard to look back historically and to say because we 
don't have information about the different types of bacteria 
that were present in the food system 50 years ago or more, but 
we do know that these organisms are constantly changing or 
mutating. As we develop antibacterials, the organisms are 
developing resistance to those. As we've developed new 
processing techniques, they've become resistant to acid, 
resistant in some cases to heat or to cold treatment. We've had 
the emergence of organisms like E. coli 0157:H7 only 15 years 
ago that have an increased virulence and disease-causing 
potential that weren't known to exist prior to that. So it's a 
constantly shifting microbiological landscape that we're 
dealing with.
    Ms.  Kaptur. With the recent revelations that have come out 
publicly, were these industry sponsored?
    Mr. Billy. No.
    Ms.  Kaptur. They were, in other words, the research was 
done by either USDA or private consumer groups?
    Mr. Billy. Yes.
    Ms.  Kaptur. The industry. Why do you think that the 
poultry industry wasn't more forthcoming to try to clean up 
their own act?
    Mr. Billy. I believe that the industry is, in fact, 
carrying out research. I know for a fact they are doing 
research in this area. They're also supporting the research 
being carried out by ARS. They're implementing HACCP in their 
plans. They're meeting our regulatory requirements so I think 
that we're going to see some improvement.
    We made it very clear in the preamble to the final HACCP 
rule that we're open to the idea that with better methodology 
and a better understanding of this campylobacter organism that 
it may well be necessary to establish a newperformance standard 
for campylobacter like the one we've established for salmonella. More 
work needs to be done to arrive at a point where we'd have the science 
and the means to do that and make it work effectively. So in the 
meantime, I think benefits will be derived from the HACCP type approach 
and will be realized here in the next two or three years.

                  zero fecal contamination for poultry

    Ms.  Kaptur. Tell me, Mr. Billy, you know we had an 
amendment in this Committee which I didn't support a couple of 
years ago that essentially eliminated, if a piece of poultry 
were going down the line and there was a possibility of fecal 
contamination there, you used to have to cut it out and throw 
it away. Now it just has to go through two washes on the line.
    Is this procedure being looked at in relation to the HACCP 
system to see whether this, in fact, is working or isn't 
working in terms of public health of our people?
    Mr. Billy. Yes, we published last summer a regulation that 
clarified the zero fecal requirement for poultry and that is a 
part of the implementation of HACCP, and we are enforcing that 
requirement in the HACCP plans that industry has developed.
    Ms.  Kaptur. What does that mean? If there's fecal 
contamination----
    Mr. Billy. If plants fail to prevent fecal contamination, 
then that's a failure of their HACCP plan and we require them 
to take action to modify their plan or their practices to fix 
that problem.
    Ms.  Kaptur. Thank you. I have one other question and then 
I'll wait until the second round.

             inspection equivalence in exporting countries

    I'd like to know if all of our trading partners are 
complying with the new meat and poultry HACCP program?
    Dr. Woteki. We've been undergoing a round of reviews of 
countries that export meat to us to determine that yes, they 
have implemented the E. coli testing that we implemented here 
in the United States last year, and that yes, they are 
operating systems that are equivalent to ours. In the cases 
where we have identified that they have not been operating 
equivalent to our expectations for plants here, we have 
indicated to those countries that they are not compliant with 
our expectations. Most of those have implemented the necessary 
steps that they have to in order to have systems equivalent to 
ours.
    Ms.  Kaptur. You said meat. Only meat?
    Dr. Woteki. Meat and poultry.
    Ms.  Kaptur. And which countries do you feel--how many 
countries do you feel are out there that have not complied that 
we trade with and how many have?
    Mr. Billy. As far as I know, all of the countries that are 
presently shipping to us have complied with the sanitation SOP 
provision of the HACCP rule.
    There are seven or eight countries that have submitted 
alternative approaches for E. coli testing which the regulation 
provides for and we've reviewed their submissions. In some 
cases we've accepted the alternatives and in others we've asked 
for additional data or information. That process is just about 
complete.
    HACCP just began in January. All of the countries that are 
shipping to us have informed us that they've implemented HACCP. 
They've submitted paperwork and information. We will review 
that. That process has started and then our audit teams that 
visit the countries will verify that, in fact, they have HACCP 
in place as required by our regulations. So that process is 
pretty well in hand.
    Ms.  Kaptur. Thank you. Thank you, Mr. Chairman.
    Mr. Skeen. Mr. Walsh.
    Ms. Walsh. Thank you, Mr. Chairman. Dr. Woteki, good to see 
you, Mr. Billy, all the members of the team. Thank you for 
coming today. I'd especially like to tip my hat to Mr. Dewhurst 
who comes to all of these Committee hearings and has mastered 
the art of looking interested in everything that's being said 
at every single one of these hearings. It's pretty remarkable. 
Only the Chairman is the only other person who can do that.

                              irradiation

    I'd like to focus on the meat inspection, HACCP, but also, 
I'd just like to ask the question about irradiation. What is 
the current status of irradiation vis-a-vis meat and poultry?
    Dr. Woteki. Mr. Walsh, as you are probably well aware, the 
Food and Drug Administration has reviewed the safety of 
irradiation as applied to red meat and has found it to be safe. 
Food Safety and Inspection Service now has the responsibility 
for issuing regulations about the conditions under which 
irradiation can be used in meat processing and also for the 
labeling of that product. We are preparing the proposed rule, 
and we expect it to be ready for publication probably mid-
summer.
    Ms. Walsh. So every package of meat will have a little 
nuclear sort of figure on it that----
    Dr. Woteki. The redura? Yes. But that's among the issues 
that are being reviewed at this point in time.
    Mr. Billy.
    Mr. Billy. Yes, given the action that Congress took in 
terms of raising questions about the labeling and the other 
information that was raised as part of the FDA rulemaking, it's 
appropriate for us to take a fresh look at the labeling 
approach as it relates to irradiation and it is our intent to 
do that through the rulemaking.

                          haccp implementation

    Ms. Walsh. Good. Thank you. Now as far as the HACCP 
regulations, just this past month, right, it was implemented in 
the larger plants around the country?
    Dr. Woteki. In January.
    Mr. Walsh. The plan is to bring the next group which is 
approximately 3,000 plants on line next January?
    Mr. Billy. Yes.
    Mr. Walsh. Could you sort of give us your assessment of how 
that's gone so far with the larger plants? Either.
    Dr. Woteki. Well, I'll start. Our assessment is that HACCP 
implementation has gone relatively well. We had anticipated 
that with the change as large in magnitude as this is for the 
companies and plants that were implementing HACCP, as well as 
for our inspectors, that there would be some initial problems 
with start up. There have been a small number of problems from 
our perspective. They were of the sort that were anticipated 
and in all cases the companies have worked quickly to correct 
the problems. Where the fault has been misunderstanding on the 
part of our inspectors of their new roles, FSIS has also worked 
very quickly to try to correct whatever misunderstandings some 
limited number of inspectors may have had.
    My assessment is that HACCP implementation has gone as well 
as we could have expected it to go. And I'm pleased.

                industry and inspection responsibilities

    Mr. Walsh. This is a fairly dramatic departure from the old 
ways and the people who are responsible for this new plan are 
on the industrial side and on the inspection side.
    Do they both have, would you say, is it fair to say 
thatthey both have an equal understanding of HACCP and there is a 
common knowledge of what is required of each of them and what their 
responsibilities are, vis-a-vis each other?
    Dr. Woteki. Let me take a first cut at answering that and 
I'm sure Mr. Billy will want to add to it as well. The kinds of 
knowledge that we are expecting our inspectors to master as 
well as the kinds of knowledge that those that have designed 
HACCP plans for plants and have responsibilities from the 
corporate side for implementing them--those represent three 
different, but complementary sets of knowledge. I think the 
sense of your question is how adequate do we sense that the 
inspectors' preparation was and how adequate do we assess the 
private sector's preparation to be.

                             haccp training

    I think that the experience to date indicates that the 
training that our inspectors have undergone was appropriate to 
the task to be implemented. Several years of work that most of 
the companies have put into the development of their HACCP 
plans as well as the recent training that they have undergone 
in its implementation also indicate that industry efforts are 
adequate for the job. Mr. Billy might want to add to that from 
his perspective.
    Mr. Billy. There are many different roles that people 
working within a plant carry out in the area of HACCP, from the 
plant manager with the overall responsibility to an individual 
that is responsible for monitoring a critical control point, 
making sure that that critical limit is met and recording it. 
So the training, the learning requirements and responsibility 
varies significantly within the company setting. The same is 
true within our Agency. Our inspectors' primary responsibility 
is to be out there monitoring and verifying that the plant is 
following its HACCP plan and we've trained them to do that. 
They're not expected to be HACCP experts. We have HACCP 
experts. We have scientists who will look at the 
microbiological results. So there are varying roles within our 
Agency as well in terms of making HACCP work.
    Mr. Walsh. It's sort of compartmentalized, is that what 
you're saying?
    Mr. Billy. Yes, but both are very important 
responsibilities. I wasn't sure how to answer ``equal'' but 
both are critically important responsibilities and are, I 
think, complementary in terms of this fundamental change that 
we're trying to accomplish.
    Mr. Walsh. I understand that in some countries that have 
implemented this, they have trained both industry and 
inspectors together. Does that make sense for us?
    Mr. Billy. We looked very hard at that issue before we 
started our training and, for several reasons, decided that it 
was more appropriate to do the training separately.
    Probably the common ground is the basic understanding of 
the seven HACCP principles. That is the same regardless. But 
beyond that very basic initial part of one day of the training, 
the roles then diverge. Training that has to occur in a company 
is about how you do a risk assessment, how you make decisions 
about where to set up your critical control points, how you set 
the limits, and on through, what recordkeeping you want to 
have, how that is going to be done, versus on our side looking 
at the plan, making sure all the parts are there, but then 
getting into monitoring and verification that the plant is 
following its plan. Because of the differences, I think it was 
appropriate to do training separately.
    The other key factors were logistics. We trained 2,100 
people using a just-in-time approach to implement this first 
wave of HACCP. Most of those people had full-time jobs in 
plants. So we had to figure out the logistics of not shutting 
down plants, keeping the plants running, and doing the training 
in a manner that did not affect their operations but was 
effective in teaching our people their new roles.
    If you try to complicate that further by adding in the 
industry as well, it just got to be overwhelming, to be honest.
    Mr. Walsh. You considered that, rejected it because you 
thought that this process would work better.
    Mr. Billy. I think so.
    Dr. Woteki. I might point out, though, that through the 
training center at Texas A&M the agency did make available to 
the private sector access to the same course materials as were 
prepared for the inspectors.

                                layering

    Mr. Walsh. Another issue is this issue referred to as 
layering. This was a big issue when we talked about this 
several years ago. As I understand it, the FSIS has eliminated 
pre-approval for equipment and blueprints.
    Dr. Woteki. Right.
    Mr. Walsh. Is that all of the layering that will be 
removed? We anticipated that HACCP, with a more scientific 
approach, there would not be the need for some of the processes 
that were followed before. What other layers would you 
anticipate removing from the process?
    Mr. Billy. We are in the process of writing the final rule 
on sanitation. Our traditional approach to sanitation, as 
represented by our longstanding regulations, was a very hands-
on approach, where our inspectors would check before the plant 
started and then walk through the plant continually and point 
out problems and then expect them to get fixed, a very command 
and control-type approach.
    The final rule on sanitation will strip all of that away. 
What will remain are a few performance standards in terms of 
what we expect to be accomplished. How that is done will be 
left to the industry.
    We are also modifying our regulations with regard to the 
cooked product area, where, again, we have very specific 
command and control-type requirements, step-wise procedures for 
preparing roast beef or many of the other cooked products.
    Our proposal there will strip that away and set, again, 
performance standards. And consistent with the schedule that we 
provided to this Committee and to you specifically earlier, we 
are sticking to that schedule, reviewing and modifying all of 
our existing regulations. We will complete that process.

                            plant shutdowns

    Mr. Walsh. Mr. Chairman, if I have time for one more 
question, I will ask it. If I do not, I will wait until the 
next round. Thank you.
    My last question on this HACCP implementation, then, would 
be we are up and running. And the process is moving along and 
the inspectors are doing their job. And in the inspector's 
mind, there is a problem that he determines or she determines.
    As I understand it right now, the inspector has the ability 
with consultation with their supervisor to shut the plant down. 
And I can understand that. I think that is an important power 
that they have.
    But do they shut it down in every instance, for example, 
where they find examples of E. coli or if in the process, 
initial process, of recordkeeping, for example, if an i is not 
dotted, t is not crossed? At what point can you exert that very 
important power?
    Mr. Billy. It turns on the specifics. If it is pretty clear 
that something was not recorded, but the information available 
and ascertained by the inspection team is that the product was 
produced within the critical control requirements, the limits 
were met and so forth, then we will issue what is called a 
noncompliance report, but no further action will be taken.
    If, on the other hand, there is clear evidence of 
adulterated product from fecal contamination or for other 
reasons, that is clear evidence of a breakdown of the HACCP 
plan. The plan is written to prevent that.
    Mr. Walsh. At that point in the process, that should not 
happen.
    Mr. Billy. Well, it depends on where it happened. If it 
happened during slaughter, for example, or during processing, 
under HACCP, there is a self-correcting procedure, where you 
are allowed, and it is absolutely accepted, to take what is 
called corrective action. So we sit tight and allow the plan to 
work.
    If corrective action is not taken by the plant, you have 
got that problem, adulteration, and the final check on the 
records does not pick up that this adulterated product was 
produced, then we have got a system failure. In that instance, 
we will take that kind of action. So it really turns on the 
specifics of what is going on in that case.
    Where there has been a breakdown and the plant tells us, 
``We will take these actions,'' if those actions are not 
followed or they are not working and there is that pattern of 
repetitive breakdowns, it will also trigger that kind of 
response.
    Let me add one statistic.
    Mr. Walsh. Sure.
    Mr. Billy. We have been in this for about two months or a 
little less than that. And we have about 300 plants that have 
implemented HACCP. So far we have had ten plants where we have 
had to take that kind of action.
    Mr. Walsh. How long were they shut down?
    Mr. Billy. It varied from a few hours to a few days. In 
every instance now based on revising the HACCP plan, those 
plants are back in operation and functioning. There are a 
couple of instances where our actions are under appeal. And 
that is working its way through the system and will be finally 
resolved.
    The bottom line to me with this substantial change is we 
have had only 10 instances in more than 300 plants. As Dr. 
Woteki said, I think that is a pretty good start.
    Mr. Walsh. I would say it would seem to be. And let me just 
end by saying that as you experience these spots in the process 
where something breaks down and there is a problem and you have 
to close a plant down, I would think each one of those would be 
some sort of a learning experience to make it a positive thing 
for the inspector, for the plant, and for HACCP itself, and 
that you continue to work with the industry to work out--I do 
not want to use the word ``bugs,'' but to work----
    Dr. Woteki. Glitches.
    Mr. Walsh. What?
    Dr. Woteki. Glitches.
    Mr. Walsh. The glitches. Good. That is a nice, sanitary 
word--to work out the glitches so that this works well for 
everybody. It is really important that it improve the quality 
and the safety of our food product.
    So thank you very much.
    Mr. Skeen. Mr. Fazio.
    Mr. Fazio. Thank you, Mr. Chairman.
    I welcome all of you. I guess it is a commentary on the 
times that some of you are becoming nationally known public 
figures----
    Dr. Woteki. Yes.
    Mr. Fazio [continuing]. Given the number of problems we 
have had, not you, Mr. Dewhurst, but----
    [Laughter.]
    Mr. Fazio [continuing]. Certainly the rest of the panel 
have, at one time or another, been put in the position of 
talking to the national media about food safety. I guess that 
is a healthy development in the sense that we have a lot more 
public interest and attention being focused on something that 
we all know is important to the public health of the nation.
    Many of the issues that Mr. Walsh just brought to you were 
concerns that I shared. I think things are going relatively 
well, but there are clearly problems. And people in the 
industry are quick to report them to their members of Congress.

                      haccp implementation review

    When do you think it would be useful for, say, the GAO to 
come in and look at how the implementation is going? We are 
under way for two months. That is probably too soon. But at 
some point in order to put to rest criticism that might be 
warranted and to learn from the experience that we are having 
across the spectrum of plants, when do you think it would be 
helpful to have somebody come in and take a look?
    Dr. Woteki. Well, I know that we are keeping a very close 
eye on monitoring the enforcement actions that we are taking as 
well as periodically looking at the data that is evolving from 
the testing that is being done, particularly for salmonella.
    I would expect that since this is a work in progress and 
since the small and very small plants will be coming on in 
January of next year and January of 2000, that we really need 
to have an ongoing evaluation. It is difficult to say at any 
one given point: When would it be ready for such an evaluation?
    I think, as Mr. Walsh just pointed out, this is a learning 
environment. For us, it is a learning environment; and for the 
private sector as well.
    Mr. Fazio. Well, I do not see it as a punitive effort. It 
really is part of an effort to help pick up on problems, 
glitches, and try to learn from them. Mr. Billy.
    Mr. Billy. The first set of requirements under HACCP kicked 
in 13 months ago with sanitation and E. coli testing. We did an 
internal review. Now, those requirements for sanitation were 
effective in all 6,000 plants.
    We randomly picked about 300 plants and did our own review 
and audit. And we are in the process of finalizing that report, 
which we could share with you. It shows what things worked 
well. They found some examples where our training was not as 
effective as it should be and actually caused us to change the 
training for HACCP to reinforce some things that we did.
    I will provide further information for the record.
    Mr. Fazio. Good.
    [The information follows:]
    [Clerk's note.--The full study is too lengthy to print and 
will be retained in committee files. The summary follows:]

[Pages 692 - 693--The official Committee record contains additional material here.]


    Mr. Billy. We are planning to do the same thing again this 
summer sometime. We are going to do an audit similar to the 
audit of this first set of plants. We will pick some number of 
plants, interview all the company, our inspection team, and 
review all the records and data. We will summarize all of that 
because we need to learn from that----
    Mr. Fazio. Sure.
    Mr. Billy [continuing] As well for the next wave of plants 
that are coming in.
    Mr. Fazio. I am sure the Committee would benefit from that 
and others would want to review it as well and continue the 
dialogue to try to sharpen the process.
    I am particularly focused on potentially putting some sort 
of dispute resolution process in place, really following up Mr. 
Walsh's questions. Shutdowns are at times unavoidable, but when 
they could be avoided, that obviously would be preferable. But 
you do have issues that need to be resolved in very, very short 
order. I am hoping something along those lines could be looked 
at.
    Without going any further following some of the question he 
is already engaged in, I do think perhaps at some point we 
should on this first phase implementation ask the GAO to look 
unless you think the National Academy of Sciences or somebody 
else would be more useful. I would be interested in your 
thoughts. They are probably harder to rope.
    Dr. Woteki. Yes.

                       single food safety agency

    Mr. Fazio. Yes. Let us start with the GAO. I have had some 
people, particularly on the consumer side, say that FSIS and 
FDA are working more closely than ever before. But I know we 
have got two different agencies, two different cultures. And I 
am wondering at what point it makes sense to talk about perhaps 
moving to integrate them even more. As you know, I have a bias 
in that direction.
    We have 24 staffers come in to brief us on food safety from 
a wide variety of agencies in the federal government. It 
sometimes requires us to think long and hard about how we could 
cut on overhead and work in the direction of putting together 
something that would be a little more streamlined.
    Do you see any future changes that USDA or the 
administration might advocate that would streamline and perhaps 
rationalize the staffing and the number of inspections?

                   national academy of sciences study

    Dr. Woteki. Well, we are very much looking towards the 
review that the National Academy of Sciences is conducting now 
to provide us with some very specific recommendations about 
your first point: the organizational structure at the federal 
level for food safety and whether we can achieve any additional 
protections in public health by bringing together into a more 
coherent organizational structure the currently very diverse 
responsibilities that are centered in several different 
departments.
    As you are probably aware, the academy has appointed its 
committee. They are going to be holding their first meeting 
later this month, and they are expecting to have a report in 
late summer, I believe. So we are very much looking forward to 
that.

                        food safety coordination

    In the meantime, though, we are working very closely with 
the Food and Drug Administration, with the Centers for Disease 
Control, and with the other organizations within the Department 
of Agriculture that have an important role to play in improving 
food safety.
    Particularly on the inspection side, we are discussing at 
the staff level with FDA how to make better use of our FSIS 
inspectors that are in plants that are also producing foods 
that fall under FDA's responsibilities.
    So we do have talks underway. I am looking forward for 
recommendations to come to me as well as to the FDA 
Commissioner on how we can better use those resources.

                          food safety research

    We are working very closely with the Agricultural Research 
Service as well as with the Centers for Disease Control and 
also with the National Institutes of Health to try to develop a 
better research basis for our food safety programs. We have got 
an ongoing review right now of the federal research portfolio 
as it relates to food safety research. I am hoping that out of 
that review will come some very specific recommendations about 
where we can get more return on our investment in federally 
funded research to again improve the safety of the food as it 
is ultimately consumed.

                     outbreak response coordination

    So we have got those two specific examples. In addition, I 
have been working very closely with EPA as well as with FDA to 
better coordinate our responses to outbreaks. And we have 
established a federal outbreak response coordination group.
    Within the Department, I have also been working within our 
sister areas within the Department to better respond to and 
coordinate specific food safety problems that are exclusively 
within the USDA regulatory area.
    So there are a number of very positive steps that we have 
been taking.
    Mr. Fazio. Those all sound good to me. I hope we all look 
forward to the National Academy of Sciences study. That 
completion will perhaps give us some more guidance for the 
future.

                    inspection staffing under haccp

    Let me just ask: Did HACCP in the long run project 
reductions in your staffing for the same or increased level of 
effective meat inspection?
    Dr. Woteki. For the immediate time, during this 
implementation phase, no. We are not projecting any decreases 
in the size of our inspection workforce. Indeed, since food 
safety is such a problem in the minds of the public at this 
point in time and because the data that we are getting from our 
surveillance systems does indicate that it is a significant 
public health problem, we would view that it would be a better 
use of those resources that are freed up with HACCP 
implementation to deploy them into other areas in which we 
could expect to have a significant gain in health outcomes.
    Mr. Fazio. That was my assumption. And I wondered where the 
jurisdictional line with FDA is drawn under that scenario.
    Dr. Woteki. Well, we have been giving particular interest 
to the fact that of the food-borne diseases, about 70 percent 
or more of them are attributable to meat, poultry, and egg 
products. So redeployment of our resources would be into those 
areas in which hazards outside of the immediate slaughter and 
processing plants could arise.
    Mr. Fazio. For example?
    Dr. Woteki. In transportation, and in the retail area to 
improve our oversight in those areas.
    Mr. Fazio. So you would be redeploying them to other 
elements of the food chain?
    Dr. Woteki. Correct.

                     pathogen testing for hamburger

    Mr. Fazio. Okay. Let me just ask about a program thatJack 
in the Box has been using: an intensive testing system to check for 
hazardous bacteria in all hamburger. Apparently they have seen some 
significant results, the percentage of hazardous bacteria declining 
dramatically in the four years this program has been in operation.
    Are you observing this closely? Are you learning any 
lessons from it? Would you be in a position to comment on 
whether or not it might be applicable to other ground beef 
processors, particularly in light of what we have had with the 
Hudson recall and all the rest?
    Ms. Woteki. Yes. Well, because I know that Mr. Billy has 
been reviewing some of the data that have been forthcoming from 
that activity, I would like him to respond to that question.
    Mr. Fazio. Sure.
    Mr. Billy. We are closely monitoring their approach. We do 
believe that their approach has application more broadly. They 
have taken advantage of the changes that we are implementing in 
terms of sanitation and E. coli testing. They impose other 
testing requirements on their suppliers in addition to the 
testing they do themselves. The statistical design of their 
system also has a great deal of merit.
    They are not alone. There are others in the industry that 
are using similar approaches, which we are also aware of. And 
what I see is that kind of approach will tend to become the 
norm to address the various pathogens of concern, that it will 
be within a HACCP framework, that that is what the companies 
will be doing.
    Mr. Fazio. Those are the kinds of plans that will be 
submitted, which would be approved for their operation?
    Mr. Billy. Yes. We do not approve HACCP plans, but I think 
the marketplace and our regulatory requirements will in the end 
result in those kinds of strategies being used by industry 
overall.
    Mr. Fazio. You have got to be careful about using that term 
``approve.'' We do not approve. But you would certainly view 
positively----
    Mr. Billy. Yes.
    Mr. Fazio [continuing]. The successful operation of a 
variety of alternatives which work in the real world?
    Mr. Billy. Yes.
    Mr. Fazio. I thank you.
    Mr. Skeen. Mr. Nethercutt?
    Mr. Nethercutt. Thank you, Mr. Chairman. Madam Under 
Secretary, welcome, ladies and gentlemen.

                           user fee proposal

    I want to speak with you today about user fees. I have an 
understanding of why the budget reflects what it does. Last 
year as I looked at the F.Y. '98 versus the F.Y. '99 summary of 
increases and decreases for user fees, it looks like last year 
user fee proposal budget at about 390 million for import/export 
inspection as well as federal food inspection.
    This year that has increased to about what, $528 million, 
33 percent increase on the federal food inspection, 200 percent 
increase on the export/import inspection. Why the large 
increases?
    Dr. Woteki. Our proposal this year is to recover the full 
cost of the federal inspection, which amounts to about $573 
million. The prior proposal was to recoup some portion of that, 
some percentage of it.
    Mr. Nethercutt. What is the justification for that?
    Dr. Woteki. Well----
    Mr. Nethercutt. Let me just stop you and say that the 
authorizing committees, interest groups, industry groups, 
interest groups, no one likes user fees. Why are you doing it?
    Dr. Woteki. I think the most straightforward response for 
you is the same one that the Secretary gave when he has asked 
this question. We believe that the federal inspection 
activities for meat, poultry, and egg products are extremely 
important ones, both for the public health and for the 
industry.
    We believe that the industry benefits from these 
inspections and that benefit is in ensuring the public 
confidence in the product that they are selling. Also, the 
federal inspection activities contribute to the development of 
a level playing field for the small as well as the large 
processors, and a user fee would be an incentive to the 
industry to implement changes that will over the long term lead 
to some reductions in the cost of inspection.
    So because these functions are so important to industry as 
well as to public health, we believe it is important that funds 
be provided for them. We are, therefore, making a user fee 
proposal.
    Mr. Nethercutt. In other words, you want them to pay for 
the inspections, notwithstanding the fact that these 
inspections are beneficial to the public at large? You do not 
think it is a public responsibility, as opposed to a user or an 
industry-wide responsibility? Is that what you are saying?
    Dr. Woteki. We believe that the public benefits, that yes, 
there is a public health component to this, that the costs from 
analyses that we have conducted will be passed on to those 
consumers who are buying these products, that the costs will be 
less than a penny a pound depending on the specific product, 
and that yes, it is a public health program, but it also is of 
benefit to industry. So industry could bear responsibilities 
for it.
    Mr. Nethercutt. I guess that is an interesting way to look 
at it. You could use the user fee concept on everybody in the 
public from highways to food inspection to you name it. It can 
somehow craft a user fee. But all the while, the federal budget 
for your services does not go down.
    So I guess it is really you are wanting to tax the various 
parts of the industry, it seems to me, in order to use federal 
resources for some other purpose, the general taxpayers' 
obligation for some other purpose. Is that a fair statement?

                            user fee history

    Dr. Woteki. Well, I would point out to you, sir, that this 
idea is not a new one.
    Mr. Nethercutt. I know it is not a new one, but----
    Dr. Woteki. It has been implemented in----
    Mr. Nethercutt [continuing]. Would you disagree with my 
comment?
    Dr. Woteki. It has been implemented in the past. My 
understanding is in the Truman administration for one year, our 
meat inspection activities were reimbursed through a user fee 
proposal and that it has been proposed I believe 10 out of the 
last 15 years by the Reagan, the Bush, and the Clinton 
administrations.
    Mr. Nethercutt. So I take it based on past history, you 
think that it is okay? You have no objection to----
    Dr. Woteki. Based on past history----
    Mr. Nethercutt. Let me finish my question, please.
    Dr. Woteki. Okay.
    Mr. Nethercutt. You have no objection to expanding this 
concept of user fees, notwithstanding the fact that you do not 
disagree with what I say that it does relative to taxincreases 
for the industry?
    Dr. Woteki. I believe that a user fee will help us to 
maintain a strong public health protection for meat, poultry, 
and egg products. I believe this is an important function to be 
continued. And if a user fee is the approach that we have to 
use to maintain that, I think it is appropriate to impose one.

                          user fee legislation

    Mr. Nethercutt. You mention in your remarks prepared for 
the hearing that user fee legislation will be prepared in the 
near future. Secretary Glickman said that same thing to us a 
month ago.
    A year ago, it was also stated that legislation will be 
submitted providing for authority for USDA to collect fees for 
the costs of salaries and so forth relative to food inspection. 
When is the legislation going to be forthcoming?
    Dr. Woteki. I believe it will be forthcoming fairly soon.
    Mr. Nethercutt. When is that?
    Dr. Woteki. There is a draft bill that is now going through 
clearance. I cannot give you a specific date as to when it will 
be delivered to you.
    Mr. Nethercutt. Will it be within a month?
    Dr. Woteki. I cannot commit to a date. As I indicated, it 
is going through clearance.
    Mr. Nethercutt. So nothing has changed from a year ago 
relative to the testimony that has been given here relative to 
legislation being forthcoming. Is that correct?
    Dr. Woteki. No. I think there is one significant 
difference. And perhaps Mr. Dewhurst would like to comment on 
it.
    Mr. Nethercutt. Sure.
    Dr. Woteki. We do have a draft bill. It is going through 
clearance.
    Mr. Dewhurst. The legislation is in the final stages of 
clearance. I talked to the folks across town from us yesterday. 
They promised us a response by the end of the week. So I 
suspect that we will be able to send the legislation up much 
earlier this year than we did last.
    Mr. Nethercutt. Can you do any better, sir, on a time? When 
can we expect it? What is your internal review expected to be?
    Mr. Dewhurst. Our USDA internal review is completed. So if 
we get clearance by the end of this week, we will have it on 
the Hill within a week of that time.
    Mr. Nethercutt. That is what I am trying to get at. So 
maybe within 30 days? Is that fair enough?
    Mr. Dewhurst. Yes, sir.
    Mr. Nethercutt. Okay. Thank you very much. Thanks, 
Chairman.
    Mr. Skeen. Mr. Serrano?
    Mr. Serrano. Thank you, Mr. Chairman. I want to thank all 
of you for being here today and for the work that you do.
    You are in an area where, unlike other agencies where the 
public and a lot of people want the federal agencies to do 
less, this whole issue of food safety is one where a lot of 
people want you to do more. So you are in a unique situation. 
And I take very seriously the work that you do.

                          antibiotic residues

    Looking through the various statements, there are some 
things that come to mind for some questions. For instance, Mr. 
Billy, you speak in your statement about lab testing for, among 
other things, antibiotic residues. I would like to know: First 
of all, how does it get into our food supply? And what does 
science say about antibiotics in food? Is this in any way 
related to the increasing antibiotic resistance that we are 
seeing in this country, at least that we read about every so 
often?
    Mr. Billy. There are approved drugs, including antibiotics, 
for use in the production of animals. FDA evaluates the safety 
and approves drugs for use in that regard.
    When they are used, there are procedures that are to be 
followed and including what are called withdrawal times that 
are based on the studies to determine when these residues will 
dissipate in the animal.
    People do not always follow the directions or the 
procedures, and in what is a relatively very small number of 
cases, we will detect residues. Then we follow up by notifying 
the Food and Drug Administration, and they will take 
appropriate action with the producer.
    It is not a significant problem area in terms of finding 
the residues. We have seen a huge improvement in that regard 
over the last 10 or 15 years.
    We also monitor imports in the same way for residues as 
well and make sure that foreign countries have similar kinds of 
systems in place. And then as an extra check, we will sample 
and test products when they arrive.

                         antibiotic resistance

    There is a growing concern that the use of certain types of 
antibiotics may, in fact, be contributing to resistance by 
various organisms. And there is a lot of research going on now 
to develop a better understanding of that, including a fairly 
sizeable project in the Agricultural Research Service. The Food 
and Drug Administration, our agency, and others are cooperating 
in that. We hope to have a much better understanding of that as 
we see the results of that research.
    Similar work is being done in other parts of the world, and 
we are monitoring that as well. There was a recent conference 
over in Europe that looked at this question, and we had people 
participate in that and monitor what they are finding and their 
results as well.
    So that is a very important area for us to stay on top of 
and, as appropriate, modify both current practices and 
approaches to animal production as necessary to address this 
concern.
    Mr. Serrano. Mr. Billy, is the time element that you 
mention one that is very specific or does it function----
    Mr. Billy. It is usually very specific, yes, a two-week 
withdrawal time, a four-week, that kind of thing. It depends on 
the type of antibiotic that you are talking about or other 
compounds that are approved for use.
    Mr. Serrano. So you can control this somewhat if people who 
are producing, if you will, follow the rules?
    Mr. Billy. Oh, yes. The resistance part is different 
because what is happening there is the organisms are actually 
changing and finding a way to resist the effect of the 
antibiotic. That is a real concern, particularly in the medical 
community, in terms of the use of various antibiotics over the 
years.
    So there is a lot of work being done in this area that 
applies both to humans as well as to the production of animals. 
It is a very important area for us to stay on top.
    Mr. Serrano. You are sort of caught at the present in a 
Catch-22 situation. You need the antibiotics, but then there is 
a problem at the other end if it is not handled properly. So 
the answer is never going to be not to use the antibiotic; 
right, unless you come up with something better?
    Mr. Billy. There is a growing interest in the area of 
organic farming, including the production of animals. There are 
different views about that in terms of the efficiency with 
which we can produce animals, the cost of producing animals 
that would have a very real impact not only on the industry but 
the consumers as well.
    So, like in many things, it is a series of trade-offs. And 
you look at all of the factors and sort out your policy and 
approach based on that. So it is a very important area to us.
    Mr. Serrano. Thank you.

                             egg regulation

    I want to move on to the area of egg regulation. Why is it 
split between two different departments? I mean, it seems that 
there is a concern about egg products, and then there is shell 
eggs. Could not we, using a terrible pun, keep all of the eggs 
in the same basket?
    Dr. Woteki. That is one of the questions that my mother 
keeps asking me, too. You have got egg products? What about the 
eggs? Who has got that?
    I think there is a historical reason why those 
responsibilities are split. Clearly we have to work very 
closely with the Food and Drug Administration as well as with 
other agencies within the Department of Agriculture that are 
responsible for quality aspects of eggs, the Agricultural 
Marketing Service as a case in point. So we coordinate the 
various activities with respect to egg products inspection with 
those different agencies.
    I might also add just as a footnote we are in the process 
of completing the first farm-to-table risk assessment that we 
have undertaken under this farm-to-table strategy that I 
mention in my testimony.
    Mr. Serrano. For eggs or for----
    Dr. Woteki. For eggs.
    Mr. Serrano. Right.
    Dr. Woteki. And we have worked closely with the Food and 
Drug Administration in the development of that risk assessment.

                          cross contamination

    Mr. Serrano. Doctor, you also say in your statement that 
many consumers have good knowledge of food safety, but there 
are some persistent misconceptions as well as confusion about 
specific food-handling practices. Could you give us some 
examples of consumer misconceptions and confusion?
    Dr. Woteki. Most definitely. One of the biggest problems I 
think has to do with cross-contamination in the home: not 
understanding that if I use a cutting board and a knife to cut 
up a chicken and then I cut up my salad using that same cutting 
board and knife, that I can be contaminating the salad; not 
understanding that if I cut up a chicken and then wipe my hands 
on the dishtowel and then use that dishtowel to wipe my dishes, 
that I can be cross-contaminating. I think that the biggest 
misunderstanding has to do with the cross-contamination issues.
    Mr. Serrano. It is usually from chicken? Chicken seems to 
be the culprit here?
    Dr. Woteki. Well, actually, any raw meat product coming in 
or poultry could be a source of contamination. Fruits and 
vegetables also can be. Undercooked eggs is another example. We 
are all coming up with examples.
    Mr. Serrano. Right. But so that I can explain it better in 
my newsletter to my constituents--if I am allowed to talk about 
chicken and eggs, since we have a commission that tells you 
what you can put in those things and as long as I do not have a 
picture with a chicken--assuming that the chicken is okay to 
eat and the vegetables are okay to eat, why am I causing a 
problem by mixing one with the other?
    Dr. Woteki. Well, if that chicken or vegetable as you are 
preparing it is already contaminated with disease-causing 
bacteria, then you can be transferring them from one to the 
other.
    Mr. Serrano. What you are saying is that the best thing to 
do is to not take chances with anything, and try not to mix 
them up?
    Dr. Woteki. Correct, correct.
    Mr. Serrano. Okay.
    Dr. Woteki. And, in fact, for that newsletter, if you would 
like some of the material that we have developed in the Fight 
BAC campaign, Fight Bacteria, we would be happy to provide it 
to you.
    Mr. Serrano. That would be good. Sure, as long as there is 
no picture of me with a chicken.
    Dr. Woteki. We can help you with a picture of you with a 
big, ugly-looking bacterium if you would like.
    Mr. Serrano. I think I have a picture of myself with my 
opponent. Thank you. [Laughter.]

                waste transfer and processing facilities

    Mr. Serrano. Doctor, speaking of newsletters, my 
congressional district in the South Bronx contains a heavy--and 
that is another issue for another day--a heavy concentration of 
waste transfer and waste processing facilities. In fact, one 
area, the Hunts Point area, has over 41 sitings for these 
facilities.
    Emissions from these facilities and from the heavy truck 
traffic that serves them are already believed to be harming the 
health of nearby residents. Asthma is a big problem, and there 
is a study underway to deal with that, especially school-aged 
children, who have a very high rate of asthma.
    The most heavily affected part of my district also includes 
the Hunts Point Terminal Market, which is the major food 
distribution point in the Northeast. At least two national food 
companies--and I have their letters here--have protested 
against siting a new waste transfer station in that area, 
expressing concern not only for their employees' health but 
also for the proposed new station's closeness to the food 
distribution center.
    Is there any research or experience that would suggest a 
danger to the region's food supply from having these transfer 
stations so close?
    Now, please understand our situation. We have this problem 
with all these transfer stations. And it dawned on everybody 
that we also supply a large amount, if not the largest amount, 
of food to the Northeast from the Hunts Point area. And now are 
we creating a problem for a lot of other people by having those 
41 and more plants in that area?
    Dr. Woteki. Well, certainly airborne transmission of 
disease-causing organisms is a potential route for 
contamination of food. Without knowing the specific nature of 
these transfer points and various plants that you have 
described, I really cannot respond in detail, but we would be 
happy to provide you with some technical assistance. If they 
are not issues that we can deal with directly within the Food 
Safety and Inspection Service, we can put you in touch with 
others that could provide that technical assistance.
    Mr. Serrano. A lot of them are regular waste 
transferplants. By ``regular,'' I mean we have had everything from a 
place that processed waste from hospitals, everything left over from an 
operation to blood and everything else. And then we also have the 
largest sludge-processing plant in New York City. Something like 75 
percent of all that is processed in New York City every day comes 
through that area. It so happens that that is where the largest food 
supply distribution center is.
    But you would be willing to help us perhaps have a little 
better understanding?
    Dr. Woteki. Most definitely.
    Mr. Serrano. Well, I thank you in advance for that help. I 
have other questions that I will enter for the record.
    Mr. Skeen. Thank you.
    Mr. Bonilla.
    Mr. Bonilla. Thank you, Mr. Chairman.

                            haccp evaluation

    First I would like to thank Dr. Woteki and Mr. Billy for 
coming by a little earlier for a preliminary discussion before 
the hearing. I really appreciate that.
    I am encouraged somewhat by the HACCP Program being 
implemented with minor glitches, as we have discussed at this 
hearing. But I do want to concur with a question that was 
raised earlier by Mr. Fazio in my absence about the possibility 
of having an independent group evaluate and assess how this 
program is working because there are some complaints, very 
serious complaints, and concerns that are being expressed by 
some of our folks out there in the private sector. And one of 
the things that has helped make this work so far is people in 
the industry that have made significant investments in HACCP so 
far.

                         food safety education

    I have a specific question about HACCP in a second, but my 
friend Mr. Serrano raised an issue that I think at some point 
we have got to start asking ourselves why there is not more 
common sense out in the heartland about food safety.
    I feel like I am the last person to learn things sometimes, 
the issue about chicken and the safety, if you use a fork to 
take the raw chicken before you put it on the grill, do not use 
that fork again in your salad, et cetera, et cetera.
    At some point you teach people things that 10 times, 20 
times they do not learn. What else can we do in this area? How 
do you educate? How do you inject common sense into some 
people's minds that seems to be lacking? And they are blaming 
the government for getting sick.
    In some cases, it is just a matter of knowing simple 
things. It is like washing your hands to try to prevent 
catching the flu. Some people out there are shaking hands, 
using other telephones, doorknobs, et cetera. And then they put 
their fingers in their mouth. And they wonder whose fault it 
was that they got sick.
    This is the same situation we have with food safety. In 
some cases, it is not about a lack of federal initiative. It is 
about a lack of people out there with enough brains to do 
something that is as simple as that.
    I do not know. That is a general statement. I do not know 
if you have any more comment on that.
    Dr. Woteki. Well, I think we have both got ideas about it. 
Probably everyone here does as well. I think there are two 
things that we need to pay attention to on food safety 
education. One is constant reinforcement and finding new ways 
to get that old message out.
    The Partnership for Food Safety Education that I referred 
to in my testimony that has produced this Fight BAC campaign is 
a good example of that, public service announcements, 
brochures, other kinds of things, you know, that are 
interesting but, yet, have a very informative message and very 
simple message that, if people follow, is going to help them to 
protect themselves against food-borne illness.
    The second issue I think that we need to focus on is 
education for school-age children. In past years when one 
person in the household, usually the mom and the wife, was the 
food purchaser and preparer, home economics classes were the 
primary source of information about food safety. Now just about 
everybody in the household has got responsibilities for 
purchasing food because half of our meals are eaten away from 
home or they are purchasing food, bringing it home, and perhaps 
even preparing it at home. So there are many more people who 
perhaps have not had that exposure to the food safety education 
that they had gotten in the traditional home economics classes.
    The next thing that the partnership is turning its 
attention to is: How can we best focus on school age children, 
boys and girls, to provide them with the same kinds of food 
safety messages that are within the Fight BAC campaign?
    There are really very simple things that you can do that 
will achieve a significant level of protection.
    Mr. Bonilla. I think sometimes we forget to remind 
ourselves that we have got the world's safest food supply. To a 
great degree, it is because of the education programs out there 
and what we are doing at USDA. But, again, I think sometimes we 
tend to--this is a very general statement here--overreact when 
we have a problem that needs addressing in a plant somewhere 
and then everybody is up in arms because people get sick. Then 
the proposals are to throw a lot of money at this problem to 
try to improve it when, in fact, we have to remember that we do 
have a good system in place and we cannot be over-reactive as a 
society. And, again, I emphasize this is just a very general 
concern that I express.

                           user fee proposal

    Back to HACCP because we were talking about that earlier. 
The users' fees being requested amount to about $573 million to 
be paid, proposed to be paid, by the processing plants. But 
another figure that I wonder if you have looked at is based on 
figures from producer industry representatives. They say that 
this could cost cattle producers as much as $9 to $12 per head 
of live animal sold.
    When you calculated the cost to the consumer, did you also 
make any consideration for the economic impacts on the 
livestock producer?
    Dr. Woteki. Well, the economic analyses that have been done 
so far that I have reviewed have indicated that the majority of 
the costs would be passed on to the consumer and that the cost 
to the consumer would be, as I had indicated earlier, less than 
a penny per pound.
    Mr. Bonilla. So did you consider the costs to producers, as 
I indicate?
    Dr. Woteki. The economists who prepared the reviews or 
prepared the assessments that I have reviewed did take into 
account whether the producers would bear costs. And their 
assessment was the costs would flow through to the consumer.
    Mr. Bonilla. Okay. Do the figures $9 to $12 per head sound 
right to you?
    Dr. Woteki. I do not recall that figure. I will definitely 
ask about it.
    Mr. Bonilla. If you would dig into that a little bit 
because that can amount to a significant amount of money----
    Dr. Woteki. Yes. Preliminary estimates indicate that the 
cost of the proposed user fee would be less than $3.00 per head 
of cattle slaughtered and these costs would be passed forward 
to consumers.
    Mr. Bonilla [continuing]. I would appreciate that very 
much.

                   haccp implementation--due process

    As you discussed in your testimony, the processing industry 
began implementing HACCP on January, earlier this year, in the 
300 largest plants that exist. This represents $1.15 billion in 
commitments for food safety on behalf of the industry.
    However, I have a few concerns about the implementation of 
HACCP. And I have heard from many industry representatives that 
are concerned about a plant being denied due process and 
demonstrating that it is in compliance or that it have an 
opportunity to achieve compliance.
    In other words, we want to make sure. We have heard a 
couple of stories out there where a plant might report that 
they have seen something questionable and that before they are 
even given a chance to respond, that the new HACCP requirements 
would come in and shut them down before they even have a chance 
to address the problem.
    I understand that you are in the rulemaking process on this 
matter, but I want to hopefully make sure that this is being 
addressed.
    Dr. Woteki. Yes. Well, let me comment just generally, and 
then perhaps Mr. Billy would like to speak more specifically. 
You are correct that we are in the process right now of asking 
for comment about the rules of practice that essentially set 
the parameters within which we will be operating and the 
expectations of the industry for how they will be dealt with 
within those parameters. And we have received many comments 
from trade associations as well as consumer organizations and 
individuals and companies about those rules of practice.
    We are very much committed to resolving disputes, resolving 
them at the lowest level possible and with the most common 
sense. I think with that as background, perhaps Mr. Billy could 
speak specifically to your question that deals with HACCP 
implementation and this whole question of due process within 
HACCP implementation.
    Mr. Billy. One of the significant parts of our design of 
the new system was to ensure that there are checks and balances 
in terms of actions that we take at a plant. And towards that 
end, once inspectors have determined that there is a system 
failure we have implemented procedures that include the 
involvement of their supervisor right on up to the district 
manager being consulted before actions are taken.
    Also, to verify that the findings are accurate and well-
documented, in our reorganization we have shifted the role of 
what we call our compliance officers. And one is sent 
immediately to that location to audit, if you will, what has 
happened to make sure, as I indicated, that the facts are 
right.
    The plants are notified. The plants have an opportunity to 
appeal. We are encouraging plants to appeal. If there is a 
dispute of the facts or the results, they are encouraged to 
appeal.
    In our HACCP training, we focused a fair amount of time on 
an attitude and approach that disputes of facts are okay and 
that is part of the process and needs to be addressed in a fair 
and equitable way. The training for our supervisors and 
managers in the field, in particular, has focused extensively 
on that. And we are monitoring that closely.
    We also recognize that with the shift to HACCP, it is such 
a substantial change that it is fair to expect that there will 
be lots of questions by our own inspectors as well as people in 
the plants.
    So, towards that end, we established a new national 
technical center in Omaha. That center is available to both our 
people and to the industry to call and raise questions. It has 
an 800 number. It is available from 6:00 in the morning until 
6:00 at night. In the first 5 weeks or so now, we have gotten 
over 3,000 calls, about equally split between our own personnel 
and the industry.
    They respond immediately if they can. If it is a very 
technical issue where they need to consult with some experts, 
there is an arrangement for that. Based on some discussions 
with industry last week, we are refining that process so that 
it, in fact, will react more quickly. And that is a good 
example of where we are trying to make improvements and speed 
up the process.
    As you indicated, we are also doing the rulemaking, which 
is a fundamental look at appropriate due process for firms 
through the entire HACCP approach. So we are getting a lot of 
comments in now from all of the interested parties, and we will 
take a close look at those in terms of other changes that we 
should make.
    Mr. Bonilla. I think it would be a good idea if we all kind 
of keep in mind in the beginning here the worst-case scenario 
down the road we have been in. I am not saying this is the 
situation with HACCP at all, but over the years well-meaning 
programs, whether through OSHA or the IRS, wind up turning into 
the most punitive, difficult issues that people out there deal 
with. Compliance is great, and food safety is our primary 
concern. We should always make sure that that goal is number 
one.
    Sometimes these programs, the people who get involved in 
them take on a life of their own. And, before you know it, you 
are up here answering questions about punitive or Gestapo-like 
tactics that are being used out there.
    I know this is the very early stages, but, again, the 
reason I am asking now is to try to prevent this from occurring 
down the road. So I appreciate the attention you are paying to 
it at this point.
    I have some questions for the record I will submit, and I 
appreciate a prompt response on that. And I appreciate your 
time here today.
    Thank you, Chairman.
    Mr. Skeen. Mr. Latham?

                           user fee proposal

    Mr. Latham. Thank you very much, Mr. Chairman.
    Just a couple of questions. It is obvious the 
administration feels it is right for the meat processors to pay 
for the cost of actual meat inspection through users' fees, but 
is it right, do you believe, for those fees paid by the 
processors to pay for other things other than inspection, such 
as consumer and producer education, as proposed in the food 
safety initiative?
    Dr. Woteki. Well, we believe that our fundamental goal is 
to enhance public health. And there are a variety of different 
mechanisms to follow to achieve that goal. We are proposing as 
part of the user fee proposal that a very small proportion of 
that money will go into some of these other areas that we 
expect were going to yield some significant public health 
improvements that include working with the states as well as 
with producers through education programs so that they can 
implement some of the preventive strategies that are going to 
lead to a safer food supply.
    Mr. Latham. I guess my question was: Do you think it is 
right for the packers to pay for that?
    Dr. Woteki. Well, ultimately the consumers are going to be 
paying for it because the cost will be passed through to the 
consumers. Those who are purchasing meat, poultry, and egg 
products under this proposal would be paying more.

                          interstate shipment

    Mr. Latham. Do you support the interstate shipment of 
state-inspected meat?
    Dr. Woteki. We are working with our national advisory 
committee to develop a paper that would essentially lay out the 
principles under which state-inspected meat could be shipped in 
interstate commerce.
    We have had two meetings with that advisory committee. They 
have provided us with some very useful comments. And they have 
also been rather enthusiastic about the draft proposal that 
they have reviewed and commented on.
    So I think the short answer to your question is yes, we can 
envision in the future a set of circumstances with HACCP 
programs fully implemented at the federal level as well as in 
the state-inspected plants moving to implement that proposal.

                      haccp implementation review

    Mr. Latham. Are you planning on soliciting any independent 
or third party review of HACCP implementation?
    Dr. Woteki. We have been considering some audits that Mr. 
Billy described earlier of HACCP implementation. We have been 
working closely with----
    Mr. Latham. I am sorry. By whom?
    Dr. Woteki. This was internally. But do you want to 
describe that, Tom?
    Mr. Billy. Yes. With the first set of requirements in the 
HACCP regulation implemented about 13 months ago, last summer 
we put together a team internally that audited about 300 plants 
and interviewed the plant manager and the other plant 
officials, our inspection teams, reviewed all of the records 
and information, and pulled together a report that is in the 
final draft form that we will be making available.
    It found that overall things work pretty well. There were 
areas where we made mistakes or our training was not fully 
effective and where we are now taking steps to address that.
    But as an overall sense of what happened in that area, we 
implemented SSOPs in about 6,000 plants. There were 95 
instances or plants where we had significant problems out of 
6,000. That is less than .2 of a percent of the plant. So we 
did have some real problems in some of the plants, and they 
were addressed. But we looked hard at those as well.
    We were going to do the same thing with HACCP and audit 
some number of the 300 plants. We will collect the information 
and report it and look to see how well it is going, where there 
are real problems, identify them, and then figure out what we 
need to do to solve them.
    Mr. Latham. I appreciate very much what you are doing, but 
I take it your answer really is no as far as anyone outside 
actually looking at it to see that maybe would not have a bias 
one way or another.
    Dr. Woteki. The exception to that is the Meat and Poultry 
Advisory Committee, which is a statutory federal advisory 
committee to the Secretary that has members that include 
representatives of companies, trade associations, state health 
and agriculture departments, as well as consumer 
representatives. They are reviewing and providing advice to 
FSIS on HACCP implementation as well as on other issues.
    Mr. Latham. Where would they get their information?
    Dr. Woteki. The primary source of information is from the 
agency as well as all of their personal collective experience.
    Mr. Billy. Plus, when we publish the meeting, we invite the 
public to provide input and comment. And we provide all of that 
to the committee. So there is also that opportunity. The public 
can also provide comment and input during the meeting itself. 
We think that is important input as well.
    Mr. Latham. Okay. That is all. Thank you, Mr. Chairman.
    Mr. Skeen. Thank you.
    I think that we have had the first round and we will get 
started on the second and last one. I know that you are willing 
and also glad to see this point of inquiry come to an end.

                     australian inspection project

    Let me ask Mr. Billy a question there. You had some 
Australian government officials that have had some disputes 
recently over their meat exports to the United States.
    I know that you are just back from there. Tim Sanders and I 
took a trip about a year ago Christmas. We had a similar 
conversation with a lot of the Australians about why they 
should not take our meat and so forth. Now there is some 
reasons why maybe we have a problem with their meat.
    Can you tell us about the problem and where it stands now?
    Mr. Billy. Yes. About a year or so ago, the Australian 
government submitted a project proposal to us to modify their 
traditional approach to meat inspection. We recognized in 
reviewing that proposal that it contained certain aspects that 
were a significant departure, not only from what we have 
traditionally done but also what we were planning under a 
HACCP-based inspection approach.
    One example of that would be to eliminate federal 
inspectors and, instead, have that responsibility carried out 
by the plants themselves. There would be one remaining 
veterinarian that would oversee the HACCP quality assurance 
plan that the company was required to have in place.
    Recognizing that that was a lightning rod issue for the 
people interested in meat and poultry inspection, we published 
the proposal in the Federal Register and invited comments from 
the public. It was very divided in terms of the comments.
    It was clear from all of that public input as well as our 
own concerns that we should not accept their proposal as 
submitted. And we informed them of that.
    Now, keep in mind that all of this time their meat is still 
being exported to the United States because they are still 
operating their traditional system. And we are inspecting and 
verifying it. So it has not had an impact on trade in that 
sense. This is about the future and the extent to which they 
could change their system.
    After exchange of several letters and the meeting I held 
with my counterparts in Australia a couple of weeks ago, they 
now have indicated their plan to submit a modified proposal 
that takes into account all of our input. I expect to receive 
that in the next several days and will review it quickly to see 
whether it is something that we can work with.
    If it is, what will happen is in four plants,--at least 
that was the original plan--they would test out this modified 
inspection approach and collect data and information that would 
indicate whether with this modified approach they are able to 
assure us that safe product is being produced and exported to 
us in a manner equivalent to our own system as it is being 
changed.
    Mr. Skeen. In our discussions with the same group of 
people, we talked about them taking more imports from our 
poultry and pork areas because we are swallowing a whole lot of 
their lamb.
    Being a lamb producer, I want to be sure that theirs is 
safe. I would hate to see us being accused of killing somebody 
in the United States with Australian mutton when we have got 
good mutton or lamb right here.
    Mr. Billy. I understand.
    Mr. Skeen. Anyway, I appreciate it.
    Are they willing to accept our HACCP system? I gather that 
they are.
    Mr. Billy. Yes. They have informed us that they are 
implementing our HACCP approach in all of the plants that will 
be shipping to the United States.
    Mr. Skeen. Well, that is very good. I appreciate the fact 
that Australia has finally come to the line with the rest of 
us. Of course, they do not want us shipping any wheat into 
Southeast Asia either.
    Ms. Kaptur?

                                labeling

    Ms. Kaptur. Thank you, Mr. Chairman.
    Dr. Woteki, do you think that as a consumer, it is 
reasonable for me to want labeling on meat and poultry and eggs 
when I go to the counter in the store; so, for example, if I 
pick up a pound of hamburger, it would say, ``Idaho Beef Lot 
Number 25'' and ``Processed by IBP, Indiana''?
    I really would like to know where my food comes from for my 
family. I have really been discouraged in the burger business. 
I do not mean if you go to McDonald's or another fast food 
restaurant, but I am talking about where you go up to the 
counter and you purchase meat or poultry for your family.
    And eggs. Is it unreasonable for me to want to know which 
farmer or enterprise created those? I see in my part of the 
country a real effort to diminish labeling and to make 
everything look generic. So if you go to a grocery chain and 
you buy eggs, the best you can do is find a number on the side 
of the carton. Then you have to figure out: Well, who has the 
code to the numbers?
    Poultry at least, if you buy it in the counter, generally 
it has a label on it. Could you comment on that?
    Dr. Woteki. Yes. I think many consumers share the same 
desire that you have just expressed, ``I want to know where the 
food that I am purchasing was grown.'' And a lot of stores are 
responding in providing labeling to the extent that they can 
about the origin of those products.
    Certainly for the products that we regulate, my 
understanding is that there can be voluntary labeling as far as 
U.S. product. And I think that certainly on the commercial 
side, within what is permissible, that we are seeing companies 
pick up on that consumer desire and using it to their marketing 
advantage.
    Ms. Kaptur. Why do we not see it in hamburger or steak or 
pork unless it is locally produced and some grower claims 
credit for it, when you go up to the counter? What percent of 
beef comes from the top 3 producers in America? Over 80 
percent; right? So what is the big deal? Why is it so hard to 
get that package labeled?
    I mean, what is your observation? You are a professional in 
this business. I am not. Why will they not label what they 
produce?
    Dr. Woteki. As it has been explained to me by the 
producers, it is frequently difficult for them. It imposes an 
extra layer of recordkeeping. They are purchasing sometimes 
from the state in which they are operating, sometimes from 
adjacent states. So for them, it represents an additional 
burden to try to keep all of the product as it comes in 
associated with where it was produced.
    It is not impossible to do certainly with the technologies 
that we have today. One could conceive of not only systems that 
would link to the state but actually all the way back to the 
farm on which a specific animal is grown.
    Ms. Kaptur. I will be honest with you. Just if I can buy 
Ohio, I will. I am sure Joe will buy New Mexico if he can. You 
know, we like to help our local communities.
    Dr. Woteki. Sure.
    Ms. Kaptur. But they just blend it all together. This is 
very interesting what is going on. So, even if you want to help 
your local growers, you cannot. Who is going to be able to read 
those labels on those egg cartons? First of all, you have to 
find the number. And it is so small that 80 percent of the 
people who shop cannot see it anyway on the side of the box.
    But, anyway, just yes, Mr. Billy?
    Mr. Billy. Well, the one other aspect of this that I would 
point out that complicates it is--and we learned this firsthand 
as we were designing our E. coli 0157:H7 sampling program for 
hamburger--beyond the 2,000 federal plants that produce ground 
meat, ground hamburger, there are approximately 100,000 
retailers that grind hamburger and receive raw materials from 
any number of sources and carry out that activity in their 
stores.
    We do not regulate retail, and that is regulated at the 
state and local levels. And so I think, in part, the question 
you raise ought to also be directed back to your state 
officials that regulate the retail area because it is not just 
about what we do. A lot of raw material goes out of our 
inspected plants and is further processed at the retail level.
    So it is a very complex process or system. And being able 
to keep track of all of that information, as Dr. Woteki has 
referred to, is part of what is impeding it as well.
    Ms. Kaptur. As I have mentioned to other witnesses from 
your Department, in my neighborhood, what is happening is the 
hamburger is now coming in in styrofoam packs with this stuff 
that looks like a clear wrap over it. And they are eliminating 
all of the people in the back rooms of these large retail 
stores that used to grind meat. So they are coming in from some 
central processor somewhere, probably put in refrigerated 
trucks. Again, it is not labeled. So you really cannot tell. It 
is sort of generic beef.
    I just find it very interesting as someone who likes to 
know where what I eat comes from. So to the extent through 
HACCP and the influence that each of you can exert, you can get 
better labeling of product and encourage that, this member at 
least would appreciate it very much.

                        redeployment of staffing

    I wanted to ask you about under HACCP, the FSIS inspectors 
will now be assigned. Some of them will be redeployed to other 
assignments. You have referred to that generally what they 
might be doing. Could you be a little more specific, please?
    Dr. Woteki. I think earlier that I did give you a fairly 
general description of how we are considering redeploying those 
resources.
    I might emphasize that for the current period in time and 
for the next two years, our primary emphasis is going to be on 
HACCP implementation and the maintenance of those inspectors 
within the current facilities. What we are talking about as far 
as redeployment is going to be dependent on some projects that 
we now have underway that are examining how to best use those 
resources in the HACCP environment.
    So what we are talking about as far as redeployment is 
something that is in the planning stage but in the very, very 
early stages. So we are talking about a longer-term project.
    Do you want to add to that, Tom?
    Mr. Billy. Yes. HACCP by its nature changes, as I indicated 
earlier, eliminates a lot of the tasks that we have 
historically done. We are now shifting to a procedure approach.
    In doing that, it might allow us to shift more people, as 
an example based on the projects that Dr. Woteki just referred 
to, off of the slaughter line to other functions, both in the 
processing areas of slaughter plants, independent or separate 
slaughter plants.
    We are also looking at the whole area of transportation. We 
have done some studies that show that there are, in fact, 
significant problems with maintenance of temperature and 
sanitary conditions during the transportation of products to 
the marketplace and problems in the marketplace as well. We 
have been working with the states to see improvements in how 
they regulate and monitor retail practices.
    It was not long ago when many of the processing operations 
that we regulate were limited to federal and state plants. Now 
you find those processing operations in retail stores. You have 
retail stores catering weddings, and you have retail stores, 
supermarkets with restaurants inside them serving food, and 
providing fully cooked meals to take home. And we think that 
there is a need to completely refocus a lot of our effort in 
terms of food safety to assure that that continuum with all of 
those changes is properly monitored from the farm right through 
to the consumer.
    So projects will give us a very clear indication of where 
we can be effective within our jurisdiction.

                     assistance in state inspection

    Ms. Kaptur. How much of that redeployment will involve 
helping the state inspect the facilities that are currently 
state-regulated?
    Mr. Billy. We have talked to the states about different 
roles we can play. We have traditionally gone out and audited 
product at retail, but we do not have jurisdiction over the 
sanitary condition or the actual operations at retail.
    So we believe that there is assistance we can provide. In 
fact, this Committee supported our requests for this year to 
provide us some additional funds where we have now instituted a 
training program for the state and local regulators that 
oversee retail. And we are teaching them the approaches that we 
use in terms of monitoring meat and poultry and egg product-
type operations. So you will see more of that.
    Perhaps we can provide an audit function to the state 
program as well where we would independently audit the state 
regulatory activities at some frequency and provide technical 
support and other types of assistance as well.
    Ms. Kaptur. Dr. Woteki, if State of Ohio Agricultural 
Commissioner were to say to you that Ohio's standards are 
higher than their own; inspection standards, that is, what 
evidence would you give to support or contradict that 
statement?
    Dr. Woteki. Well, first of all, I would say good for Ohio. 
And I would hope that all of the state inspection programs 
would be striving to achieve that.
    I would certainly look for some objective criteria with 
respect to the performance standards that we have set for 
salmonella. I would expect that the state inspection program 
would be able to provide the same data as we are getting out of 
federally inspected plants and that the pathogen levels on the 
finished product would be in the same range.
    I would also like to look at any data that the state would 
have on food-borne illnesses traceable to the inspected 
products to see how comparable that is to the overall national 
picture. So I would be looking for that kind of validation.
    Ms. Kaptur. If you could submit for the record that type of 
comparison between federal standards in these areas and Ohio's 
standards, I would be interested in seeing if they are the 
same. Anything you could provide would be greatly appreciated.
    Mr. Billy. I will provide further information for the 
record.
    [The information follows:]

  A Comparison of Ohio State Inspection Program Standards to Federal 
                           Program Standards

    Each State Meat and Poultry Inspection Program must submit 
an annual State Performance Plan in a format that addresses 9 
basic items: laws, regulations, resource management, facilities 
and equipment, in-plant reviews, enforcement, specialty 
programs, and laboratories. The State Performance Plan for Ohio 
is consistent with Federal standards and does not claim or 
document that a higher standard is met.

                           labeling for eggs

    Ms. Kaptur. I want to just go back to that original 
question I asked about labeling. We talked about meat. What 
about eggs? What about eggs? Why is it so hard to say where 
eggs come from on the box?
    Mr. Billy. Shell eggs?
    Ms. Kaptur. In the shell.
    Mr. Billy. I think that it is possible to figure out a 
strategy that would keep track of that. It might add 
significant costs in terms of how they are cleaned and boxed 
and warehoused and shipped and so forth.
    FDA currently regulates the shell egg area. So if shell 
eggs go in the marketplace, it would be under their 
jurisdiction. So I think it is an area you might want to 
explore with them in terms of what might be possible.
    Ms. Kaptur. But they do not do the checking for salmonella, 
do they? They do? You do not?
    Mr. Billy. For shell eggs.
    Ms. Kaptur. So they would be the ones to encourage 
labeling, not yourselves?
    Mr. Billy. They regulate the labeling of shell eggs. That 
is right.

                           foodborne illness

    Ms. Kaptur. I just wanted to ask a final question of Dr. 
Woteki about the conference that was recently held in Atlanta 
on food safety. There were some statements made in the paper, 
one of which you stated today. And that is 40 percent of the 
average family's food budget is spent outside the home in 
restaurants now.
    There was also a statement made in that article: Another 
reason for a lot more foodborne illness in the eyes of those 
attending the conference had to do with the rising level of 
imports, particularly in fruits and vegetables.
    Is it our impression that levels of foodborne illness are 
rising and these are related to fruits and vegetables? I mean, 
they made that statement. Is that your impression?
    Dr. Woteki. The data that we have on foodborne illnesses so 
far has indicated that we have about 9,000 deaths a year. We 
have approximately 33 million cases of foodborne illness. And 
most of those are attributable to meat, poultry, and egg 
products. The data also, though, indicate that there has been 
an increase in foodborne illnesses that are related to fruits 
and vegetables.
    I do not know the original data that was reported in the 
news report. I read the same one today. It was just reported 
yesterday in Atlanta. And I believe that they are using some 
data that is coming from the active surveillance system that 
the Centers for Disease Control is currently maintaining.
    Those data do indicate, when compared to some previous data 
not collected in the same way but the best information that was 
available, that the average person has about 1.4 
gastrointestinal illnesses a year that may be food-related. The 
inference that was drawn in the article was that yes, there has 
been an increase in foodborne diseases.
    I would like to see the data and see the original data upon 
which those reports were based in order to get a better sense 
and to give you a scientific answer to your question.
    I do have to say, though, that we are very much concerned 
about foodborne illnesses. They are preventable illnesses, by 
and large. And they do carry a very big economic cost in this 
country. We also know that the number of cases that we detect 
and that are reported is really a very substantial 
underestimate. So the handle that we have on foodborne illness 
from a scientific perspective is not the best.
    We are trying very hard through the efforts of CDC to get 
better estimates of foodborne illnesses. And the data that are 
referred to are kind of a first installment on that. There is 
going to be a lot more information coming forward as these 
surveillance systems improve over the coming years that will be 
better able to give some good answers on which ways the tends 
are going.
    Ms. Kaptur. Thank you. Thank you very much, Mr. Chairman.
    Mr. Skeen. Thank you.
    Mr. Latham?

                        LABELING AND FOOD SAFETY

    Mr. Latham. I guess some of the things that Ms. Kaptur 
brought up I would be curious. You know, we are talking about 
food safety. Would the labeling of the point of origin or if 
you got down to which--I do not know whether you are talking 
about which chicken laid which egg. Is there a safety issue if 
we are talking about food safety?
    I am just curious. I mean, I understand. It would be nice 
to know if it was Iowa beef or whatever, but is it a safety 
issue?
    Dr. Woteki. Well, I do not think that the source of origin 
by state is an indication of safety. With the inspection 
systems that we have at the federal level and the state level, 
we should be assuring the same level of protection, regardless 
of what state the food is produced in.
    Mr. Latham. I guess my concern would be that you would 
expend resources possibly trying to follow the carcass, 
whatever, and to maintain identity that could be resources 
devoted to food safety.
    Dr. Woteki. Well, I think you are touching on an important 
issues. There are two very different perspectives. One is the 
food safety one. The other is, ``the consumer wants to know.'' 
There is a demand from some segments of consumers to purchase 
locally. And to the extent that labeling----
    Mr. Latham. Can they not go----
    Dr. Woteki [continuing]. Can help them to do that, they 
would like to see labeling.
    Mr. Latham. But you could go to your local butcher, I would 
think, and ask them if the beef or the hog was raised locally 
if that was your number one concern. I would be very concerned 
about diverting resources that should be used for food safety.
    That is my only comment, Mr. Chairman. Thank you.
    Mr. Skeen. Thank you.
    Mr. Serrano?
    Mr. Serrano. Mr. Chairman, it was not my intention to 
comment any further, but I am troubled by what I am hearing 
here today about the issue of food labeling, not troubled by 
these folks but troubled about the facts they bring to me.
    We know where this suit was made, and we know where so many 
products--where our cars are made, our TV sets are made. And if 
we do not know exactly what plant, we have a general 
understanding. At least we have somebody we can go to in their 
corporate office, and then we find out where it was made. We 
even found out that Kathie Lee's clothing line was made by 
children somewhere.
    We don't seem to know about the eggs I am eating. And I am 
hearing--and I know you are just bringing to us the information 
that other people present to you--about the added cost.
    I used to chair the Consumer Affairs Committee of the State 
Assembly in New York before I became Chairman of the Education 
Committee. And it ties in, right--education and consumerism? 
But whenever I heard someone say, ``It will add costs,'' I 
suspected that they were hiding something. Whoever tells me 
that they cannot label the eggs, I am wondering if they are 
always following the regulations.
    So I just want to let you know that I respect the fact that 
the information you are giving us is based on what people in 
the industry tell you. U.S. government officials have to bring 
it to us, but I know they could label it if they wanted to and 
if we forced them to. And I know the public wants it.
    Let me tell you something else. You hear a lot of talk at 
these kinds of hearings, about money and how much it will cost 
to do something and what government should be doing with tax 
dollars. I would bet that if you took a poll nationwide, you 
would find out that Americans in general are very concerned 
about food safety, even if it affects someone else.
    In other words, if you hear about a program in one part of 
the country that helps certain children get certain breaks in 
society to get a head start or whatever, you might find people 
in other parts of the country or in that same part of the 
country in another strata of society who say, ``You know, 
government should not be doing that.''
    I suspect, though, that if you hear someone in one part of 
the country has a cancer that we should be doing more research 
about, there are other people who do not feel that, ``Well, 
that is their problem.'' But if you hear that someone got sick 
eating food, meat or whatever, I do not think a person in the 
middle class is saying, ``Well, that is that person over 
there'' or saying, ``Well, that is what they get for eating all 
of that food.'' It doesn't work that way.
    And so I would hope that we begin to look at this whole 
area and question deeply why people refuse to label, because it 
makes me very suspicious, as I said. And I will close with 
this. My experience has always been that when people say, ``It 
will add costs,'' it usually means that they found a way to get 
around the regulations imposed on them and that is their 
concern, the cost.

                              SERRANO HAM

    And speaking of things that are in good shape now, I will 
ask this question every week: Serrano ham is okay now from 
Spain?
    Dr. Woteki. Yes.
    Mr. Serrano. Okay. I know it was not for years. Can you 
tell me quickly what has changed in the ham or what changed in 
us?
    Mr. Billy. There are certain plants that another agency in 
USDA, the Animal and Plant Health Inspection Service, has 
approved to ship this type of ham to the United States. The 
concern is the African swine disease. Based on control measures 
and inspections on site there, there now are a very few plants 
that are permitted to ship this type of product.
    If Spain and any other country that produces that type of 
product can provide APHIS the assurances they need to ensure 
that that disease is not going to be introduced in the United 
States through their products, then more can be approved as 
well.
    Mr. Serrano. So it is not an open market to this ham?
    Mr. Billy. Not at all.
    Mr. Serrano. It is just some places.
    Mr. Billy. It is a very legitimate animal health concern 
that has to be very carefully controlled.
    Mr. Serrano. At $24 a pound, it should be. Thank you.
    Mr. Skeen. That brings us to the close. I want to thank 
you, very much----
    Dr. Woteki. Thank you, Mr. Chairman.
    Mr. Billy. Thanks.
    Mr. Skeen. [continuing]. For your forthcoming and honest 
and open answers in the problems that you deal with and the way 
that you deal with them and the way that you make them produce.
    I want to thank all of you. Ms. Wilcox and Mr. West, we are 
going to give you medals for being so patient. Thank all of 
you. We are adjourned.
    [Clerk's note:--The following questions were submitted to 
be answered for the record.]

                   Food Safety and Inspection Service

                          inspector vacancies
    Mr. Skeen. How many inspector vacancies have there been per year 
from 1992 through the current year?
    Respondent. Prior to 1997, FSIS requested significant increases in 
the budget to fill in-plant inspection vacancies based on a work 
measurement formula that reflected 30-year-old inspection methods and 
industry practices. In the 1997 budget, FSIS determined that it could 
accomplish its food safety mission and make the gradual shift to a new 
inspection system without additional permanent, full-time, in-plant 
inspection staff. The 1997 budget requested and the Congress provided 
an increase of $3.2 million for 100 other than permanent full-time 
staff years to facilitate the Agency's transition to HACCP-based 
inspection. No additional inspection staffing was requested in the 1998 
budget, and the Congress provided the funding requested for pay cost 
increases which enables FSIS to maintain constant in-plant inspection 
staffing levels. Under this policy, we have operated with no vacancies 
in fiscal years 1997 and 1998.
    As part of the 1997 strategy, the Agency committed to employee 
groups that it would not let our inspection workforce go below 7,502 
permanent full-time positions. For fiscal year 1998, we have increased 
this commitment to 7,530 positions due to Federal assumption of the 
Florida State inspection program with reprogramming of funds from 
Grants-to-States to Federal Food Inspection. The Agency's commitment to 
employees is part of the basis for our ongoing efforts to implement 
HACCP and modify online inspection procedures. Another part is our one-
for-one policy; that is, when any inspector leaves, we hire another as 
quickly as possible to satisfy the most critical need, so as to 
maintain a constant level of inspection personnel.
    Following are the numbers of inspector vacancies at the end of 
fiscal year 1992 through 1996. These numbers are based on the work 
measurement formula that FSIS began using 30 years ago.
    [The information follows:]

End of year inspector vacancies\1\

1992..............................................................   501
1993..............................................................   372
1994..............................................................   441
1995.............................................................\2\ 728
1996..............................................................   678

\1\ Inspection assignments covered through temporary combination of 
inspector assignments.
\2\ Early out retirement option caused a one-time, short-term increase 
of 190 in permanent full-time vacancies.

    Mr. Skeen. Please update the table on page 769 of last year's 
hearing record showing levels of permanent full-time employees and 
other employees from fiscal year 1990.
    [The information follows:]

[Page 718--The official Committee record contains additional material here.]


                             pilot programs
    Mr. Skeen. Please identify any pilot programs FSIS has in operation 
and include those pilot programs to be established in fiscal year 1998 
and those proposed for fiscal year 1999. Please also provide beginning 
and ending dates for the projects and estimated costs of each.
    [The information follows:]

[Pages 720 - 722--The official Committee record contains additional material here.]


                     field management consolidation
    Mr. Skeen. What closings or consolidations of field offices will be 
completed by the end of fiscal year 1998?
    Respondent. All closings or consolidations of field offices in the 
reorganization of FSIS will be completed by the end of fiscal year 
1998. Much of the field consolidation was accomplished in fiscal year 
1997 with the opening of the District Offices, and the establishment of 
a Technical Services Center and Financial Processing Center. In fiscal 
year 1998 FSIS continues to consolidate activities within the new field 
office structure and is closing the Program Review Office located in 
Lawrence, Kansas.
    Mr. Skeen. What do you plan for fiscal year 1999?
    Respondent. No additional closings are planned for fiscal year 
1999.
    Mr. Skeen. What personnel transfers will be required as a result of 
any closings or consolidations?
    Respondent. A small number of employees are being transferred in 
fiscal year 1998 as a result of the reorganization. These employees are 
working in the district offices until such time as they are 
transferred.
    Mr. Skeen. Please provide a chart showing the number of field 
offices FSIS will have by the end of fiscal year 1998 with a comparison 
of fiscal year 1997 and the proposed number for fiscal year 1999.
    [The information follows:]

                                FOOD SAFETY AND INSPECTION SERVICE FIELD OFFICES                                
----------------------------------------------------------------------------------------------------------------
                                                                    End of year    Proposed end    Proposed end 
                                                                       1997        of year 1998    of year 1999 
----------------------------------------------------------------------------------------------------------------
Inspection operations regional offices..........................  ..............  ..............  ..............
Inspection operations area offices..............................  ..............  ..............  ..............
Import field offices............................................  ..............  ..............  ..............
Compliance area offices.........................................  ..............  ..............  ..............
Egg products inspection offices.................................  ..............  ..............  ..............
Inspection operations correlation center........................  ..............  ..............  ..............
Program review office...........................................               1  ..............  ..............
District offices................................................              18              18              18
Financial processing center (Urbandale, Iowa)...................               1               1               1
Technical services center (Omaha, Nebraska).....................               1               1               1
Personnel operations branch (Minneapolis, Minnesota)............               1               1               1
                                                                 -----------------------------------------------
      Subtotal..................................................              22              21              21
Eastern laboratory (Athens, Georgia)............................               1               1               1
Midwestern laboratory (St. Louis, Missouri).....................               1               1               1
Western laboratory (Alameda, California)........................               1               1               1
Tranining center (College Station, Texas).......................               1               1               1
                                                                 -----------------------------------------------
      Grand total...............................................              26              25              25
----------------------------------------------------------------------------------------------------------------

                           research projects
    Mr. Skeen. What joint or coordinated research is FSIS conducting 
with the Agricultural Research Service (ARS) and other USDA agencies?
    Respondent. FSIS coordinates 44 research projects with ARS and does 
not conduct research itself. These projects are broken out into four 
categories: control of foodborne pathogens in live animals (16 
projects); pathogen control during slaughter and processing (9 
projects); post slaughter pathogen modeling and control (7 projects); 
and residue detection and chemical analysis (12 projects). Most of 
these projects answer basic research questions, but some are applied 
research. These four categories follow the research project tracking 
system that FSIS uses to monitor this work to ensure that it meets the 
Agency's food safety research needs.
    FSIS acts as a research partner with the Cooperative State 
Research, Education, and Extension Service (CSREES), which administers 
research grant programs that focus on food safety research needs. FSIS 
works closely with CSREES and conveys its research needs both through 
the report, ``FSIS Food Safety Research Agenda: Directions for the 
Future'' and by involving them in the annual research meeting held in 
conjunction with ARS. CSREES uses the report to establish the focus of 
the research topics that they fund.
    Provided for the record are copies of the ``FSIS Food Safety 
Research Agenda--Directions for the Future'', and the ``1997 Progress 
Report on Food Safety Research Conducted by ARS.''
    [The information follows:]

    [Clerk's note.--The documents are too lengthy to be printed and 
will be retained in committee files.]

                           ratite inspection
    Mr. Skeen. Is FSIS considering a change in its policy on mandatory 
inspection of ratite meats?
    Respondent. In 1994, the Department received a petition dated 
December 31, 1993, requesting mandatory inspection of ostriches. In 
September 1995, FSIS received a second petition requesting mandatory 
inspection of ostriches. In March 1995, FSIS received a petition 
requesting FSIS to promulgate regulations governing the voluntary 
inspection of emu and emu products. FSIS denied all three petitions. 
FSIS does not plan on changing its policy on mandatory inspection of 
ratite meats based on amenability criteria.
    In 1997, the House Appropriations Committee directed USDA/FSIS to 
develop a cost benefit analysis of the impact of including ratite meats 
in the mandatory inspection program. The Agency's response is currently 
undergoing final clearance within the Department.
                        inspected establishments
    Mr. Skeen. Please provide a table showing the number of plants 
inspected in fiscal years 1996 and 1997 and the number estimated for 
fiscal years 1998 and 1999.
    [The information follows:]

                                       FEDERALLY INSPECTED ESTABLISHMENTS                                       
----------------------------------------------------------------------------------------------------------------
                                                                                            1998         1999   
                                                              1996 actual  1997 actual   estimated    estimated 
----------------------------------------------------------------------------------------------------------------
Slaughter plants............................................          297          236          230          230
Processing plants...........................................        4,402        4,357        4,310        4,255
Combination slaughter and processing plants.................          996          925          940          935
Talmadge-aiken plants \1\...................................          245          261          258          255
Import establishments.......................................          162          124          122          120
Egg plants..................................................           78           78           78           76
                                                             ---------------------------------------------------
      Total.................................................        6,180        5,981        5,938       5,871 
----------------------------------------------------------------------------------------------------------------
\1\ Federal slaughter, processing, and combination plants that are inspected by State employees under federal   
  supervision.                                                                                                  
                                                                                                                
Note.--This does not include plants that are inspected on a voluntary basis only, or inspected food warehouses. 

             sanitary and phytosanitary cooperative efforts
    Mr. Skeen. How does FSIS work with other agencies in USDA and with 
other U.S. government agencies on trade-related matters such as 
Sanitary and Phytosanitary regulations, new requirements under trade 
agreements, and trade disputes?
     Respondent. The mission of FSIS is to ensure the safety of both 
domestic and foreign meat, poultry, and egg products. To fulfill this 
mission, the Agency provides technical support for FAS in negotiations 
with foreign countries, such as the European Union.
    With regard to sanitary and phytosanitary standard development in 
the Codex Alimentarius Commission, FSIS staff carries out two roles. 
One is the general coordination and management of U.S. participation in 
the Commission and the deliberations of its subordinate committees. The 
second is in substantive participation in the elaboration of issues in 
the Committees. The former involves work at both policy levels and 
technical levels in DHHS, Department of Commerce, and EPA, and within 
the Department, FAS, AMS, APHIS, GIPSA, and ARS. The latter involves 
participation as Chairpersons of Committees, US delegation heads to 
Committees, and delegation members. These latter roles are also carried 
out by employees from several agencies in the Department. Technical 
staff from several agencies and departments will frequently work 
together as members of delegations to Codex Committees. 
                           state equivalency
    Mr. Skeen. FSIS is responsible for assessing the effectiveness of 
state meat and poultry inspection programs. What happens when a state 
program is found to be inadequate?
    Respondent. FSIS regularly reviews each State's program. If a State 
program is found to be not ``equal to'' the Federal, USDA designates 
the State for full Federal inspection of all plants. Designation means 
Federal assumption of a State inspection program.
    Mr. Skeen. Are any states currently operating substandard programs?
    Respondent. Currently, there are no states operating substandard 
programs.
    Mr. Skeen. What are Talmadge-Aiken plants?
    Respondent. Talmadge-Aiken plants are federal slaughter, 
processing, and combination plants that are staffed with State 
employees who serve as Federal agents under Federal supervision.
              field automation and information management
    Mr. Skeen. How many computers have you delivered to date to field 
inspection staff under the Field Automation and Information Management 
Project (FAIM)?
    Respondent. In fiscal year 1997 FAIM delivered 841 computers to 
field inspection personnel. Since the start of nationwide FAIM 
implementation, 2,116 computers have been deployed.
    Mr. Skeen. What is the current schedule for completion of the FAIM 
project?
    Respondent. Nationwide FAIM implementation is scheduled to be 
phased in over a five-year period. Implementation started in fiscal 
year 1996 and is on schedule to be completed at the end of fiscal year 
2000. To date, FAIM has met all deadlines and schedules.
    Mr. Skeen. Is the FAIM project coordinated with the Chief 
Information Officer?
    Respondent. Yes, the FAIM project is coordinated with the Chief 
Information Officer (CIO) at both the Agency and Department levels. 
Each week, the FEIS Agency Chief Information Officer is updated by the 
FAIM Project Manager on all FAIM activities. The FAIM Project Manager 
also reports to the Agency IRM Steering Committee (IRMSC) which reviews 
and approves all major FAIM milestones, implementation plans, and 
development activities. The IRMSC is chaired by the Agency CIO.
    From FAIM's inception, FSIS has coordinated efforts with the USDA 
Office of Information Resources Management (OIRM) and its successor 
organization, Office of the Chief Information Officer (OCIO). Following 
the granting of Technical Approvals by OIRM, FAIM has provided OCIO 
with annual status reports and quarterly briefings. In fiscal year 
1997, FAIM submitted requests for waivers from the Department's 
Information Technology (IT) moratorium and received approvals from 
OCIO. OCIO continues to cite FAIM for its sound business case and 
endorsed FAIM's selection as one of the ``Top 20'' IT projects in the 
Industry Advisory Council report on Best IT Practices in the Federal 
Government.
    Mr. Skeen. Is the FAIM project fully compliant with year 2000 
requirements?
    Respondent. FAIM is not a single application but an initiative 
covering multiple applications, hardware, training, etc. All FAIM 
software, applications are fully compliant with year 2000 requirements. 
All FAIM hardware and telecommunications equipment has been tested and 
is fully compliant with year 2000 requirements.
                           condemned products
    Mr. Skeen. Please update the table on condemned product provided on 
page 798 of last year's hearing record to include 1997.

                                                CONDEMNED PRODUCT                                               
----------------------------------------------------------------------------------------------------------------
                                                                        Thousands of heads          Liquid egg  
                                                                 --------------------------------    products   
                                                                                                   (millions of 
                                                                      Poultry        Livestock        pounds)   
----------------------------------------------------------------------------------------------------------------
Fiscal year:                                                                                                    
    1990........................................................          71,056             410              95
    1991........................................................          74,282             386             104
    1992........................................................          72,154             401             109
    1993........................................................          63,927             385             113
    1994........................................................          69,192             412             128
    1995........................................................          79,998             469             139
    1996........................................................          82,665             546             145
    1997........................................................          87,573             543             153
----------------------------------------------------------------------------------------------------------------

    Mr. Skeen. How much of these products were imported?
    Respondent. Since the early 1990's, less than one percent of 
product presented for entry into the U.S. has been refused entry and 
rejected as unfit. Imported product that has passed U.S. re-inspection 
at the port of entry is subsequently treated as domestic product and 
not accounted for separately if it is later found to be unfit during 
further processing.
                     progressive enforcement action
    Mr. Skeen. What is the average length of time the 200 federally 
inspected plants were under some level of Progressive Enforcement 
Action in fiscal year 1997?
    Respondent. The average length of time an establishment operated 
under Progressive Enforcement Action in fiscal year 1997 was 
approximately 18 months.
                            early retirement
    Mr. Skeen. Was early retirement offered to FSIS employees last year 
and, if so, what was the result?
    Respondent. In fiscal year 1997 early retirement was offered to all 
eligible employees in FSIS, except in-plant veterinary medical officers 
and in-plant inspectors. A total of 28 employees accepted the early 
retirement offer. During fiscal year 1997, a total of 56 buyouts were 
taken. They were offered because of field consolidation as part of the 
Agency reorganization. Of the 28 employees who accepted the early 
retirement offer, 18 took buyouts.
                     office of the under secretary
    Mr. Skeen. Please provide the number of people assigned to the 
Office of the Under Secretary for Food Safety including those detailed 
from other agencies or from other offices in FSIS? Please also provide 
the job title for each of those persons.
    Respondent. The Office of the Under Secretary for Food Safety 
currently has three individuals assigned and one serving on detail from 
FSIS. The office includes the Under Secretary for Food Safety, one 
Deputy Under Secretary for Food Safety and two secretaries, one of whom 
is on detail.
            disposition differences between meat and poultry
    Mr. Skeen. In red meat inspection, only the veterinarian can make 
the final disposition on a diseased carcass; whereas, in poultry 
inspection, the inspector can make final disposition under veterinary 
supervision. Why is there a difference?
    Respondent. Uniform inspection standards and procedures are to be 
applied during the postmortem inspection of each meat and poultry 
carcass. The regulations covering meat and poultry inspection provide 
that in red meat inspection, only the veterinarian can make final 
disposition on a diseased carcass, whereas in poultry disposition, the 
inspector can make a final disposition under direct veterinary 
supervision. Although the food inspector can condemn obviously diseased 
carcasses in poultry, the veterinarian is responsible for the uniform 
dispositions made by the food inspector. This is accomplished by 
setting standards and observing how inspectors handle normal as well as 
abnormal conditions. In both meat and poultry the inspector designates 
questionable carcasses for veterinary review and final disposition. A 
major factor in this difference has to do with the difference in the 
financial consequences of condemning a chicken vs. an animal carcass.
                           lab accreditations
    Mr. Skeen. Please update the table that appears on page 805 of last 
year's hearing record showing the total number of labs that were 
accredited, the total number of accreditations, and the cost to include 
fiscal year 1997 actuals and estimates for fiscal year 1998.
    [The information follows:]

                                             ACCREDITED LABORATORIES                                            
                                             [Dollars in thousands]                                             
----------------------------------------------------------------------------------------------------------------
                                                               Accredited         Number of                     
                                                              laboratories     accreditations         Cost      
----------------------------------------------------------------------------------------------------------------
Fiscal year:                                                                                                    
    1990..................................................               265               297              $902
    1991..................................................               227               292               926
    1992..................................................               231               313             1,024
    1993..................................................               243               323             1,091
    1994..................................................               149               186               672
    1995..................................................               148               184               440
    1996..................................................               150               186               360
    1997..................................................               140               177               363
    1998 estimate.........................................               141               177               350
----------------------------------------------------------------------------------------------------------------

    Mr. Skeen. How much was collected in accreditation fees in 1997, 
and so far in fiscal year 1998?
    Respondent. In fiscal year 1997 the agency collected $447,500 in 
accreditation fees. Through February of 1998, we have so far collected 
$385,00 in fees.
                        appropriations transfers
    Mr. Skeen. Were there any transfers made to or from your agency in 
fiscal year 1997? If so, please list where the transfer came from along 
with a brief explanation as to why they were made.
    Respondent. As provided by the Agriculture, Rural Development, Food 
and Drug Administration, and Related Agencies Appropriations Act, 1997, 
Public Law 104-180, the Office of the Assistant Secretary for 
Congressional Relations transferred $309,000 to FSIS to maintain 
personnel at the Agency level.
    Mr. Skeen. Have there been any transfers so far this fiscal year?
    Respondent. FSIS has received two transfers so far this year. As 
provided by the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 1998, Public 
Law 105-86, FSIS received a transfer of $309,000 from the Office of the 
Assistant Secretary for Congressional Regulations to maintain personnel 
at the Agency level. Also, under the authority provided in the 
Department of Agriculture Reorganization Act of 1994, 7 U.S.C. 6912, 
FSIS has received a transfer of $155,256 and two staff years from 
Departmental Administration to maintain EEO counselors at the Agency 
level.
                         inspection exemptions
    Mr. Skeen. An establishment is exempt from Federal and/or state 
inspection if the product is for the sole use by the owner of the 
livestock, the owner's family, or nonpaying guests. How many exempt 
plants are there?
    Respondent. There are about 1,800 State plants and about 2,800 
Federal plants involved in conducting custom exempt operations.
    Mr. Skeen. Can a plant be exempt for a part of its production on a 
daily or weekly basis?
    Respondent. Yes, a plant can be exempt for a part of its production 
on a daily or weekly basis. Such operations must meet clean up, product 
identification, and separation requirements.
                  performance based inspection system
    Mr. Skeen. Please provide the Committee with the current status of 
the Performance Based Inspection System (PBIS).
    Respondent. The Performance Based Inspection System (PBIS) is a 
computer-based system for organizing regulatory inspection 
requirements, scheduling inspection activities, and recording and 
reporting inspection findings. PBIS provides FSIS with a centralized, 
easily accessible database on plant performance by scheduling and 
tracking inspection findings in all plants under Federal inspection. 
These records document plant performance forming a sound basis for 
uniform inspection decisions.
    Sanitation Standard Operating Procedures (SSOP's) were implemented 
in January of 1997. The changes required for this implementation, the 
revision and retirement of tasks in the Inspection System Guide have 
been in place since January 1997. The new tasks focus on process 
oversight by inspection personnel to assure that the regulatory 
requirements for SSOP's are met by inspected establishments.
    PBIS changes required for the first phase of HACCP, E. coli, and 
Salmonella for large plants have been completed and implemented. These 
changes include a revision of the Inspection System Guide (ISG) to a 
systematic process and performance standard approach for consistency 
with the PR/HACCP final rule. The inspection System Procedure (ISP) 
Guide contains the resulting consolidation of more than 400 ISG tasks 
into 49 ISP procedures relevant to the SSOP's, HACCP, E. coli, 
Salmonella, and all remaining regulatory inspection requirements. The 
revised version of PBIS for PR/HACCP continues to function to schedule 
inspection procedures and record inspection findings. The traditional 
version of PBIS will be used in establishments until they become 
subject to the provisions of the PR/HACCP final rule.
    PBIS continues to function as originally intended in scheduling of 
processing inspection activities. FSIS is currently developing a 
strategic plan for standardizing and improving the flow of PBIS-
generated inspection data from the field level to headquarters. Part of 
this strategic plan is the PBIS Centralization and Reporting Project, 
which will establish a central point for PBIS administrative operation 
schedule production and distribution, and feedback entry. The ability 
to access Management Reports will be provided at locations other than a 
central point. PBIS has provided the vehicle for implementation of 
agency responsibilities pertaining to the HACCP regulation to be phased 
in through the year 2000. Currently, about 300 traditional plants in 
PBIS have been changed to HACCP. PBIS has the capability to directly 
transmit HACCP data to computers in the Washington DC Headquarters 
office.
    Mr. Skeen. Will PBIS be expanded to egg production?
    Respondent. PBIS will be expanded to include egg products 
inspection when HACCP is implemented in egg processing establishments.
                      eligible exporting countries
    Mr. Skeen. How many countries are eligible to export to the U.S.?
    Respondent. There are 42 countries eligible to export to the U.S., 
although only 34 of the 42 countries actually export.
    Mr. Skeen. Has the number of eligible countries increased over 
fiscal year 1996?
    Respondent. No, the number of eligible countries is 42 for both 
fiscal years 1996 and 1997.
    Mr. Skeen. Please provide a table showing the number of countries 
eligible to export to the U.S., the number that actually export 
products to the U.S., and the number of new countries that have 
applications pending to export to the U.S. for each of the fiscal years 
1993 through estimates for 1999.
    [The information follows:]

[Pages 729 - 735--The official Committee record contains additional material here.]


    Mr. Skeen. How are exporting countries certified?
    Respondent. Countries apply to FSIS for an initial determination of 
equivalence. Each country's inspection system must undergo a rigorous 
and lengthy review process to determine whether it is equivalent to the 
U.S. system of inspection. It begins with a review of the country's 
responses to five sets of questionnaires; the country's laws, 
regulations, and instructions; and additional documentation. After 
scientific experts within FSIS are satisfied with the results of the 
document review, a FSIS multi-disciplinary team conducts an on-site 
audit of the country's inspection system. If FSIS finds that the 
country's inspection system is equivalent, FSIS publishes a proposed 
rule in the Federal Register inviting public comment on the proposed 
listing of the country as a country eligible to export products to the 
United States. The final determination to list the country as 
equivalent and, therefore, eligible to export products to the United 
States must be published as a final rule in the Federal Register, along 
with FSIS's responses to the public comments.
    Mr. Skeen. How often are slaughter and processing plants in other 
countries reviewed by your Agency?
    Respondent. FSIS conducts a periodic on-site audit of each of the 
countries that are eligible to export meat and poultry products to the 
United States, usually on an annual basis but more often as needed. As 
part of the audit, a random selection of certified establishments are 
selected to be audited. In addition, FSIS reinspects imported meat and 
poultry at the port of entry on a random sample basis.
                library of foreign country requirements
    Mr. Skeen. What is the cost to maintain the Library of Foreign 
Country Requirements?
    Respondent. The cost to maintain the Library of Foreign Country 
Requirements is about $30,000 annually for staff and operating costs.
    Mr. Skeen. How many requests for information did you receive from 
the export library system in fiscal year 1997?
    Respondent. We received approximately 13,000 requests in fiscal 
year 1997. Most of these requests were from traders interested in 
exporting to foreign countries.
                     fast antimicrobial screen test
    Mr. Skeen. Will the Fast Antimicrobial Screen Test (FAST) be 
extended to pork inspection?
    Respondent. There are no plans to extend FAST into swine slaughter 
plants at this time. A large scale validation study in swine would be 
required before FAST could replace the STOP tests.
    Mr. Skeen. How widely is FAST being used?
    Respondent. FAST is currently being used in approximately 80 
percent of all cow and bob veal slaughter plants in the USA. All other 
slaughter species, including swine, use the STOP test.
                    sos, stop, cast, and fast tests
    Mr. Skeen. Please update the table that appears on page 815 of last 
year's hearing record showing the number of SOS, STOP, CAST, and FAST 
tests performed to include fiscal year 1997.
    [The information follows:]

                                           RESIDUE TEST BY FISCAL YEAR                                          
----------------------------------------------------------------------------------------------------------------
                           Year                               SOS        STOP       CAST       FAST      Total  
----------------------------------------------------------------------------------------------------------------
1992.....................................................    106,133    117,858     79,666      (\1\)    303,657
1993.....................................................    101,118    116,600     85,033      (\1\)    302,751
1994.....................................................    127,742     93,428     54,783     17,831    293,784
1995.....................................................     26,273     74,632     79,542     68,410    248,857
1996.....................................................     17,682     41,428     19,448     96,805    175,363
1997.....................................................     11,415     37,140     12,529     52,393   113,477 
----------------------------------------------------------------------------------------------------------------
\1\FAST final analysis completed July 1993.                                                                     


    Mr. Skeen. What were the results of these procedures?
    Respondent. In fiscal year 1997 there were 973 total violations 
detected, including 22 by SOS tests, 185 by STOP tests, 74 by CAST 
tests, and 692 by FAST tests.
    Mr. Skeen. In total, how many inspection hours were performed in 
fiscal year 1997 on a voluntary basis and how much was reimbursed to 
FSIS?
    Respondent. In fiscal year 1997, 82,734 hours were spent on 
inspections not required by law. Fees paid for this inspection totaled 
$4,126,812.
                   fsis committees and working groups
    Mr. Skeen. Please provide the Committee with an updated list of 
committees and working groups that have been established within the 
agency and briefly describe their activities.
    [The information follows:]
                       office of field operations
Safety and health steering committees
    The Occupational Safety and Health (OSH) Steering Committee 
monitors and assists the Agency with in-plant safety issues by 
providing an open channel of communications between labor, management, 
and safety/health professionals. The Steering Committee's principal 
functions include; monitoring and evaluating performance of existing 
OSH programs; reviewing and evaluating new OSH programs before 
implementation; and advising or making recommendations concerning 
existing and/or proposed FSIS OSH programs.
                  office of public health and science
Recall policy working group
    The recall working group is assessing the adequacy of FSIS recall 
procedures and policy and practices. The group is examining how FSIS 
does recalls, how the agency communicates recalls with consumers, the 
industry and other state and local agencies and what actions should be 
taken after product is removed from commerce.
Fermented sausage work group
    The Fermented Sausage Working Group was formed to develop the 
Agency's strategy on how to encourage establishments to either adopt a 
safe process or validate that their current processes for ready-to-eat 
products are safe. The working group is composed of members of each 
Agency program and members from the Office of the General Counsel
Advisory committee on microbiological criteria for foods (NACMCF)
    The advisory committee was formed in 1987 to provide a means 
whereby the Federal Agencies responsible for assuring the safety of the 
food supply can develop consistent regulatory policies that are uniform 
to the fullest extent possible. The committee is currently working on a 
variety of assignments related to food safety, including risk 
assessment, HACCP, microbial criteria for performance standards, and a 
variety of CODEX documents related to foods in international trade.
Antibiotic residue analytic team
    The group was designed to resolve issues of new methods for 
antibiotic residue detection by Technical Services Laboratory 
personnel.
          office of policy, program development and evaluation
HACCP-based inspection models project
    A project team has been established to support each of three 
volunteer plants as technical advisors. The project will develop new 
inspection methods and protocols for testing them. Team members 
represent multiple program areas within FSIS.
Headquarters sampling management committee
    This committee plans regulatory microbiological and food chemistry 
sampling programs, formulates operating procedures and work practices, 
manages an ongoing scheduling system, provides guidance to the field as 
needed, reviews data and issues reports. Microbiological sampling is 
conducted on raw product, ready to eat products, and ground beef.
In-distribution working group
    This group is a sub-group of the HACCP Inspection Models project. 
The group is developing options and recommendations on: activities to 
be conducted by inspectors working in-distribution, how the activities 
will be scheduled, how in-distribution personnel and activities will be 
managed within the field organization, and the training needs of the 
in-distribution inspectors. The working group will develop models to be 
tested in areas near the HACCP Inspection Models test sites.
Working group on small/very small plant demonstration project (SPDP)
    At publication of its Pathogen Reduction; Hazard Analysis and 
Critical Control Point (HACCP) Systems final rule, FSIS recognized that 
small and very small establishments might need technical assistance in 
meeting these regulatory requirements. FSIS also recognized that many 
small establishments lack the familiarity of HACCP that already exists 
in many large establishments. Therefore FSIS planned an array of 
technical assistance activities that will facilitate HACCP 
implementation in the small and very small establishments.
    The SPDP working group's major activities are: developing and 
distributing resource materials, conducting small plant HACCP 
workshops, purchasing and distributing HACCP ``new technologies'' and 
providing technical assistance to Institutional plant HACCP 
demonstrations. Institutional Sponsors assist in providing technical 
guidance to small and very small plants and include trade associations, 
Extension agents, and university professors.
Working group on experimental project for zero tolerance for HACCP 
        livestock plants
    FSIS is preparing a Federal Register Notice announcing an 
experiment that may lead to new procedures for FSIS verification of the 
zero tolerance standard for visible fecal material on livestock 
carcasses. The Agency is seeking livestock plants operating under the 
Hazard Analysis and Critical Control Points (HACCP) system and 
employing antimicrobial interventions after the final carcass rail 
inspection point to participate in the experimentation.
    The experimentation will follow FSIS briefings for industry and 
consumer groups that were held on Friday, March 6, 1988. These 
briefings focused on the Agency's current thinking on making the zero 
tolerance verification point in livestock consistent with Pathogen 
Reduction/HACCP final rule requirements and concepts. FSIS believes 
that it is timely to permit experimentation with potential new 
procedures for verifying that the standard is being met.
Humane slaughter working group
    Advises the Deputy Administrator of the Office of Policy, Program 
Development, and Evaluation concerning progress toward implementing a 
comprehensive strategy regrading humane handling and slaughter of 
livestock.
Interagency committee on animal production and food safety
    This committee involves fourteen federal agencies in four Cabinet 
departments. The purpose of the Committee is to assure coordination and 
collaboration of the member agencies activities to protect human and 
food animal health, including animal production practices on land and 
in water, that may impact food safety.
National residue program working group
    This group involves FDA, EPA, CDC and USDA agencies. The purpose is 
to make recommendations to revise the FSIS residue program to be based 
on public health risks and to function effectively in a HACCP 
environment.
Headquarters sampling management committee
    Plans and manages regulatory microbiological (including raw 
products for Salmonella) and food chemistry sampling programs. 
Responsibilities include: managing the ongoing sample scheduling 
system, coordinating sampling procedures and instructions for 
inspectors and receiving procedures at labs, analyzing data and lab 
results to provide information to OFO, OPHS, and other FSIS managers 
concerning the sampling process, planning and developing future 
sampling programs, and modifying current ones based on FSIS policy and 
planning.
                            grants to states
    Mr. Skeen. Please update the table that appears on page 818 of last 
year's hearing record showing a cost breakout, by state, of the Grants 
to States program to include fiscal year 1997 actuals and fiscal year 
1998 estimates.
    [The information follows:]

                                            GRANTS TO STATES PROGRAM                                            
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                              State                                    1996            1997            1998     
----------------------------------------------------------------------------------------------------------------
Alabama.........................................................          $1,275          $1,283          $1,321
Alaska..........................................................             341             346             356
Arizona.........................................................             585             605             623
Delaware........................................................             213             217             223
Florida.........................................................           1,967           2,029         \1\ 300
Georgia.........................................................           2,404           2,463           2,535
Hawaii..........................................................         \2\ 293  ..............  ..............
Illinois........................................................           4,361           4,673           4,810
Indiana.........................................................           1,653           1,695           1,745
Iowa............................................................           1,011           1,055           1,086
Kansas..........................................................           1,283           1,404           1,445
Louisiana.......................................................           1,755           1,836           1,890
Mississippi.....................................................           1,099           1,098           1,130
Montana.........................................................             341             353             363
New Mexico......................................................             419             421             433
North Carolina..................................................           2,849           3,045           3,134
Ohio............................................................           4,620           4,610           4,745
Oklahoma........................................................           1,617           1,624           1,671
South Carolina..................................................           1,133           1,184           1,219
South Dakota....................................................             483             478             492
Texas...........................................................           4,603           4,752           4,891
Utah............................................................             771             822             846
Vermont.........................................................             284             295             304
Virginia........................................................           1,293           1,304           1,342
West Virginia...................................................             597             606             624
Wisconsin.......................................................           2,985           3,019           3,107
Wyoming.........................................................             284             311             320
                                                                 -----------------------------------------------
      Total.....................................................          40,519          41,528          40,955
----------------------------------------------------------------------------------------------------------------
\1\ The Florida inspection program converted from State to Federal Inspection on December 1, 1997.              
\2\ The Hawaii inspection program converted from State to Federal Inspection on November 1, 1995.               

       volume and cost of meat and poultry inspected at slaughter
    Mr. Skeen. Please update the table that appears on page 819 of last 
year's hearing record showing the volume of meat and poultry inspected 
at slaughter to reflect the separate cost associated with each to 
include fiscal years 1997 and 1998.
    [The information follows:]

                           VOLUME AND COST OF MEAT AND POULTRY INSPECTED AT SLAUGHTER                           
                                              [Dollars in millions]                                             
----------------------------------------------------------------------------------------------------------------
                                                    Millions of pounds           Slaughter inspection cost      
                                                ----------------------------------------------------------------
                                                   Red meat     Poultry        Meat       Poultry       Total   
----------------------------------------------------------------------------------------------------------------
1986...........................................       37,042       24,273  ...........  ...........         $203
1987...........................................       36,300       25,700  ...........  ...........          212
1988...........................................       36,885       28,213  ...........  ...........          225
1989...........................................       37,400       30,268  ...........  ...........          237
1990...........................................       38,413       31,932  ...........  ...........          248
1991...........................................       36,190       33,959  ...........  ...........          262
1992...........................................       38,727       35,679  ...........  ...........          282
1993...........................................       40,688       37,095  ...........  ...........          296
1994...........................................       41,091       39,626         $138         $173          311
1995...........................................       43,663       41,303          134          180          314
1996...........................................       44,689       43,572          133          185          318
1997...........................................       40,522       44,233          139          193          332
1998 estimate..................................       41,002       46,505          143          199          342
----------------------------------------------------------------------------------------------------------------
Note:--The separate cost of meat and poultry slaughter is not available prior to fiscal year 1994.              

                      fsis enforcement activities
    Mr. Skeen. Please update the table that appears on page 822 of last 
year's hearing record showing the number of FSIS enforcement 
activities, to include fiscal year 1997.
    [The information follows:]

                                           FSIS ENFORCEMENT ACTIVITIES                                          
----------------------------------------------------------------------------------------------------------------
                                                              1993       1994       1995       1996       1997  
----------------------------------------------------------------------------------------------------------------
Suspensions of inspection................................        n/a        n/a        n/a        n/a         64
Cases received...........................................      1,348      1,381      1,039        776        797
Cases filed with hearing clerk...........................          4          8          6         17          6
Prosecutions.............................................         22         24         27         41         22
Civil injunctions........................................          0          4          7          7          1
Seizures.................................................          1          1          1          1          1
Warning letters..........................................      1,721      1,662      1,361      1,063      1,097
Administrative orders....................................          4          7          5          8         12
Detentions...............................................        796        672        586        466        327
Pounds detained (mils.)..................................       13.1       22.0       10.1       31.3       44.0
Recalls monitored........................................         36         45         48         23         25
                                                          ======================================================
Planned reviews..........................................     12,114     11,198     10,170      8,716      7,648
Random reviews\1\........................................     36,179     35,013     27,732     22,383     18,494
                                                          ------------------------------------------------------
      Total reviews......................................     48,293     46,211     37,902     31,099     26,142
----------------------------------------------------------------------------------------------------------------
\1\ Random reviews declined in fiscal years 1993 and 1994 due to the need to divert personnel to the            
  investigation of problems related to the E. coli outbreaks.                                                   

                            training center
    Mr. Skeen. Please update the table on page 821 of last year's 
hearing record showing the annual costs to operate the Donald L. 
Houston Training Center since it was first established
    [The information follows:]

FSIS program training costs, Texas A&M University

                        [In thousands of dollars]

        Fiscal year                                       Contract costs
1988..............................................................   780
1989.............................................................. 2,372
1990.............................................................. 2,691
1991.............................................................. 2,562
1992.............................................................. 2,997
1993.............................................................. 2,748
1994.............................................................. 2,495
1995.............................................................. 2,852
1996.............................................................. 3,106
1997.............................................................. 3,452

    Mr. Skeen. How many FSIS employees are located at this training 
center?
    Respondent. there are currently 34 permanent full time employees 
assigned to this training center.
    Mr. Skeen. Do you plan to add or reduce staff at this center in 
fiscal years 1998 or 1999?
    Respondent. We are planning to reduce the number of permanent full 
time employees to 31 by the end of fiscal year 1998.
    Mr. Skeen. How many employees were trained at the Center during 
fiscal year 1997 and how many do you anticipate training during fiscal 
year 1998?
    Respondent. During fiscal year 1997, 2,300 FSIS employees were 
trained, and in fiscal year 1998, we expect to train up to 1,850 
employees. This figure includes training provided for the 
implementation of the Field Automation and Information Management 
(FAIM) project as well as the Food Safety Education Program being 
conducted in cooperation with the Texas A&M University.
    Mr. Skeen. Please provide a status report on FSIS' work with Texas 
A&M on developing new methods of training.
    Respondent. The following listing shows the programs developed 
using new methods of training.
    a. The Food Safety Education Program for FSIS inspectors has been 
developed and is currently being delivered by Texas A&M University 
faculty. This Food Safety Science program prepares food inspectors for 
their regulatory roles in plants subject to the 1996 rule on ``Pathogen 
Reduction; Hazard Analysis and Critical Control Point Systems''.
    b. There are over 30 training modules that are in the process of 
being converted to a CD ROM format for the computer Based Training 
Program.
    c. The development of an Internet home page has been accomplished 
and will be developed as an information resource for both FSIS 
personnel and the public in general.
    d. Training continues to be delivered via Satellite Downlink for 
State and Local Sanitarians.
    e. The district offices have been wired to receive training 
originating from the training center via Picture-Tel teleconferencing 
equipment.
                      amount of poultry inspected
    Mr. Skeen. Please update the table that appears on page 823 of last 
year's hearing record showing the number of poultry carcasses 
inspected.
    [The information follows:]

                                   POULTRY CARCASSES INSPECTED PER FISCAL YEAR                                  
                                                  [In millions]                                                 
----------------------------------------------------------------------------------------------------------------
                                                    Young        Mature                                         
                      Year                         Chickens     chickens     Turkeys       Ducks        Other   
----------------------------------------------------------------------------------------------------------------
1985...........................................        4,427          189          172           21          1.1
1986...........................................        4,593          187          192           23          1.2
1987...........................................        4,929          193          223           23          1.6
1988...........................................        5,149          197          237           24          3.4
1989...........................................        5,422          184          244           22          3.0
1990...........................................        5,787          184          267           21          3.6
1991...........................................        6,146          171          278           21          5.5
1992...........................................        6,369          181          280           18          5.1
1993...........................................        6,613          171          277           20          5.3
1994...........................................        7,014          174          278           21          5.2
1995...........................................        7,303          163          279           19          5.5
1996...........................................        7,517          154          290           20          5.3
1997...........................................        7,646          164          289           22          9.5
----------------------------------------------------------------------------------------------------------------

                            labeling program
    Mr. Skeen. Please update the two tables that were provided last 
year to include fiscal years' 1997 and 1998 data. One showed the staff 
years and cost of the labeling program and the other showed the number 
of labels processed and approved. Be sure to include the footnote on 
the staff year table to reflect the total staff year level devoted to 
actually reviewing labels.
    [The information follows:]

                      LABELS PROCESSED AND APPROVED                     
------------------------------------------------------------------------
               Year                     Processed           Approved    
------------------------------------------------------------------------
1984..............................            151,591            129,852
1985..............................            134,432            114,938
1986..............................            149,019            129,819
1987..............................            158,082            135,176
1988..............................            182,403            154,570
1989..............................            180,404            154,799
1990..............................            184,887            160,258
1991..............................            210,957            191,018
1992..............................            192,330            173,801
1993..............................            145,526            135,372
1994..............................            190,439            177,302
1995..............................            202,077            180,262
1996..............................            141,022            120,976
1997..............................             73,010             57,000
1988 estimate.....................             78,000             62,000
------------------------------------------------------------------------


                STAFF YEARS AND COST OF LABELING PROGRAM                
------------------------------------------------------------------------
               Year                    Staff years           Costs      
------------------------------------------------------------------------
1984..............................                 38         $1,288,850
1985..............................                 40          1,548,891
1986..............................                 39          1,438,084
1987..............................                 42          1,796,385
1988..............................                 45          1,785,065
1989..............................                 42          1,730,913
1990..............................                 41          1,920,921
1991..............................                 37          2,167,177
1992..............................                 30          1,482,392
1993..............................                 29          1,372,635
1994..............................                 27          1,385,772
1995..............................                 27          1,483,795
1996..............................                 24          1,350,000
1997..............................                 19          1,100,000
1998 estimate.....................                 17          1,050,000
------------------------------------------------------------------------
Note.--5 staff years were devoted to reviewing labels in 1997.          

                      organic foods production act
    Mr. Skeen. Are any FSIS funds being devoted to the Organic Foods 
Production Act in fiscal year 1998?
    Respondent. No FSIS funds are being devoted to the Organic Foods 
Production Act in fiscal year 1998.
                     codex alimentarius commission
    Mr. Skeen. What responsibilities does FSIS have on the Codex 
Alimentarius Commission?
    Respondent. FSIS manages the program of planning, policy 
development, support and coordination for U.S. involvement and 
participation in the Codex. FSIS serves as a focal point for 
dissemination of information to Government officials and members of the 
public on Codex Alimentarius activities; performs outreach activities 
to educate the public on Codex activities; seeks mechanisms to enhance 
public participation in the process; assesses the effectiveness of U.S. 
participation in Codex; develops strategies to accomplish U.S. goals in 
the Commission; and supports the U.S. Manager's efforts at achieving 
harmonization of U.S. food standards development among federal 
agencies. FSIS also provides assistance to the U.S. Manager for Codex 
Alimentarius and U.S. delegates to the Codex Alimentarius Commission in 
carrying out activities handled by various committees. Additionally, 
FSIS plans and coordinates US Government hosted meetings of subsidiary 
bodies of the Commission.
    Mr. Skeen. Are there any new responsibilities in light of the GATT/
WTO agreement?
    Respondent. The GATT Uruguay Round Agreements Act designated USDA 
as the lead agency for U.S. participation in the sanitary and 
phytosanitary standards-setting activities of the Commission. FSIS 
coordinates USDA's participation in these activities. The Act also 
established a requirement for an annual public notice of the Codex 
standard-setting activities. FSIS published such notices on May 23, 
1995, June 4, 1996, and May 23, 1997. A 1998 notice, covering the 
period June 1, 1997, to May 31, 1999, is anticipated.
               number of livestock inspected at slaughter
    Mr. Skeen. Update the table that appears on pages 569 and 570 of 
last year's hearing record showing the number of livestock inspected at 
slaughter, by species, to include fiscal year 1997.
    [The information follows:]

                                       LIVESTOCK INSPECTED PER FISCAL YEAR                                      
                                                 [In thousands]                                                 
----------------------------------------------------------------------------------------------------------------
                     Year                         Cattle     Calves     Sheep      Goats      Swine     Equines 
----------------------------------------------------------------------------------------------------------------
1986..........................................     34,822      3,215      5,411        147     77,246        171
1987..........................................     34,811      2,779      5,096        159     76,388        246
1988..........................................     32,790      2,437      4,802        236     79,129        300
1989..........................................     31,340      2,177      5,059        230     82,111        343
1990..........................................     33,034      1,872      5,141        230     83,856        315
1991..........................................     29,620      1,463      4,449        191     81,298        236
1992..........................................     30,759      1,353      5,129        225     89,210        244
1993..........................................     32,569      1,210      5,094        289     90,481        184
1994..........................................     33,179      1,191      4,645        365     90,206        109
1995..........................................     35,681      1,395      4,512        333     94,490        113
1996..........................................     37,690      1,723      4,268        421     93,397        113
1997..........................................     35,809      1,579      3,743        375     78,489         88
----------------------------------------------------------------------------------------------------------------

                        meat and poultry exports
    Mr. Skeen. Provide a list of countries that received U.S. meat and 
poultry exports, how much they received, and the dollar value for 
fiscal year 1997.
    Respondent. The quantity is provided in metric tons.
    [The information follows:]

[Pages 744 - 759--The official Committee record contains additional material here.]


                    fiscal year 1999 budget request
    Mr. Skeen. Provide a table showing a complete breakout, including 
all proposed increases and decreases, of your budget request to the 
Secretary, the Secretary's request to OMB, and the OMB allowance.
    [The information follows:]

[Page 761--The official Committee record contains additional material here.]


           egg products inspection and salmonella enteritidis
    Mr. Skeen. Please describe FSIS responsibilities for egg products 
inspection and Salmonella enteritidis.
    Respondent. Under the Egg Products Inspection Act, Public law 91-
597, FSIS is responsible for administering a continuous inspection 
program for the processing of liquid, frozen, and dried egg products.
    The act requires all egg products to be pasteurized to destroy 
Salmonella (all species including enteritidis) prior to distribution in 
commerce. Salmonella enteritidis is a pathogen of particular concern, 
which has increasingly been associated with egg consumption. FSIS and 
other experts are developing a Salmonella enteritidis risk assessment 
to help guide agency and other efforts in addressing this serious 
public health problem.
                          exporting procedures
    Mr. Skeen. Did you act on the recommendation from the Office of the 
Inspector General report on exporting procedures that has been open 
since 1987?
    Dr. Woteki. Yes, the Agency reviewed its action with the Office of 
the Inspector General (OIG) to reconcile the audit recommendation and 
the Agency's response. The resolution of this recommendation reflects 
the Agency's current organizational structure and implementation of the 
Pathogen Reduction; Hazard Analysis and Critical Control Point Systems; 
Final Rule. In addition, the Office of the Chief Financial Officer 
(OCFO) accepted the Agency's final action on the recommendation and 
closed the audit in its entirety, advising that no further reporting to 
the OCFO is necessary on this audit. Following is OIG's recommendation 
and the Agency response.
    [The information follows:]
Exporting Procedures Audit #24097-1 AT, Recommendation #1 (the 
        management decision was reached on February 5, 1987)
            Recommendation
    Issue Federal regulations governing the Acceptable Quality Level 
(AQL) program for all classes of poultry that are expected to remain 
subject to the provisions of Meat and Poultry Inspection (MPI) 
(Directive 918.1.
            Response
    The food safety elements contained in the MPI Directive 918.1 
``Poultry Carcass Inspection Program'' dated December 10, 1973, were 
replaced by the January 26, 1998, implementation of the Pathogen 
Reduction; Hazard Analysis and Critical Control Point Systems and the 
February 4, 1997, final rule, ``Poultry Inspection's Revision of 
Finished Product Standards with Respect to Fecal Contamination'' (62 
F.R. 5139, 9 CFR 381.65, and 381.76). In light of the final rule, the 
provisions in the food safety guidance provided under MPI Directive 
918.1 have been codified. This action addresses the recommendation for 
FSIS to issue Federal regulations related to the food safety elements 
in the AQL program through MPI Directive 918.1
                        meat and poultry hotline
    Mr. Skeen. How many calls did the Meat and Poultry Hotline receive 
in fiscal year 1997?
    Respondent. USDA's Meat and Poultry Hotline received 138,120 calls 
in fiscal year 1997.
    Mr. Skeen. How does this compare with the two previous fiscal 
years?
    Respondent. Some year-to-year fluctuation in call volume is normal. 
In 1997, FSIS expanded its call-processing capacity during the two 
weeks immediately following the Hudson Foods ground beef recall, which 
accommodated a significant increase in the number of calls received.

Calls to meat and poultry hotline by fiscal year (Oct. 1-Sept. 30)

1995..........................................................   116,530
1996..........................................................   113,026
1997..........................................................   138,120
                export certification information system
    Mr. Skeen. What is the status of the Export Certification 
Information System?
    Respondent. The Export Certification Information System (ECIS) was 
referenced in a 1993 FSIS proposed regulation aimed at automating the 
export certification process. It was determined by FSIS that the 
specific system proposed was not adequate to accommodate industry 
practices and needs for the growing export market. However, FSIS 
remains committed to improving export certification, and the Agency is 
currently studying the process and will make recommendations for 
improvements.
           ergonomically designed poultry inspection station
    Mr. Skeen. What is the status of the ergonomically designed poultry 
inspection station that is being developed to help reduce the potential 
for cumulative trauma disorders?
    Respondent. FSIS contracted for fabrication of a prototype 
ergonomically designed leaning/standing stool. A test plant was 
identified, but subsequently declined to allow test of the stool. No 
further action has been taken on the stool at this time.
                            fsis staff years
    Mr. Skeen. Please provide a table showing a breakout of your staff 
years by inspectors and non-inspectors for fiscal years 1990 through 
1998.
    [The information follows:]

              STAFF YEARS SUPPORTED WITH APPROPRIATED FUNDS             
------------------------------------------------------------------------
                                         Inplant                        
                                    inspection  staff     Non-inplant   
                                          years           staff years   
------------------------------------------------------------------------
Fiscal year:                                                            
    1990..........................              7,495              1,711
    1991..........................              7,593              1,693
    1992..........................              7,644              1,742
    1993..........................              7,667              1,857
    1994..........................              7,829              1,782
    1995..........................              8,025              1,773
    1996..........................              7,915              1,555
    1997..........................              7,935              1,497
    1998 (estimated)..............              7,963              1,477
------------------------------------------------------------------------
Note: Fiscal years 1995 and later include the Egg Products Inspection   
  and Animal Production Food Safety programs transferred to FSIS during 
  USDA reorganization in 1995.                                          

                         on-farm investigations
    Mr. Skeen. What type of on-farm investigations does the Food and 
Drug Administration (FDA) do?
    Respondent. To assure human food safety from violative residues in 
animal products, FDA Center for Veterinary Medicine sets safe 
concentrations and tolerances for the approved drugs that may appear in 
animal tissue at the time of slaughter and investigates violations of 
residues above safe tolerances. FDA also ensures that animal feed is 
safe and wholesome and is free of violative drug, pesticide, and/or 
industrial chemical residues. FSIS reports violations found at 
slaughter to the FDA, who conducts field investigations with FDA field 
staff or with State agencies contracted to perform appropriate producer 
education and traceback activities for the FDA.
    Mr. Skeen. Does FSIS conduct on-farm investigations?
    Respondent. FSIS does not conduct on-farm investigations. FSIS has 
no regulatory authority for pre-slaughter food safety.
                              haccp forum
    Mr. Skeen. Please identify field hearings to explain the Pathogen 
Reduction and HACCP programs that you plan for fiscal year 1998.
    Respondent. Thus far, FSIS has conducted four HACCP implementation 
field hearings in fiscal year 1998 and also plans to conduct additional 
meetings.
    [The information follows:]
A. HACCP implementation field hearings
    1. Planning meeting, Washington, DC--December 12, 1997.
    2. Des Moines, Iowa--January 14, 1998.
    3. Denver, Colorado--January 16, 1998.
    4. Memphis, Tennessee--January 21, 1998.
B. Additional meetings on HACCP implementation
    1. Outcomes of Ground Beef Working Group--April 22, 1998--
Arlington, Virginia.
    2. New Technologies--date and location to be determined.
    3. Small plant communications planning meeting--May 1998 (location 
to be determined).
    4. Series of meetings throughout the United States for small plant 
owners (Dates and locations to be determined).
                 animal production food safety program
    Mr. Skeen. Please describe the operation of the Animal Production 
Food Safety program.
    Respondent. As part of FSIS's farm-to-table strategy, the Animal 
Production Food Safety Staff works with constituent groups to encourage 
and coordinate voluntary efforts to address public health issues 
associated with food animal production. In this ongoing program, FSIS 
promotes adoption of voluntarily-implemented food safety initiatives 
and quality assurance certification programs. The Staff helps identify 
and supports adoption of animal production practices having the 
potential to reduce chemical residues, antibiotic resistance and human 
pathogens in or on animals or eggs presented for slaughter or 
processing. In carrying out this activity, FSIS builds partnerships 
among animal health and public health experts at State, regional, 
district and national levels to increase the understanding and adoption 
of HACCP-compatible animal production food safety practices. The staff 
works with industry, academia, the USDA Extension Service, and other 
State and federal governmental agencies to proactively address the 
challenges small producers and ranchers are facing in food safety. The 
Animal Production Food Safety staff also supports the USDA farm animal 
well-being efforts and coordinates Agency efforts to improve voluntary 
industry and regulatory oversight efforts in the humane slaughter of 
livestock.
                          haccp implementation
    Mr. Skeen. How many plants in the United States have gone ahead 
with a HACCP system?
    Respondent. Two hundred ninety-nine plants met the regulatory 
definition for a ``large'' establishment contained in the Pathogen 
Reduction and HACCP rule and implemented the use of the HACCP system on 
January 26, 1998.
                  haccp impact on exporting countries
    Mr. Skeen. What affects will the HACCP rules have on imported 
products?
    Respondent. Meet and poulty imported to the United States must be 
produced under an inspection system equivalent to the U.S. system. 
Following promulgation of the final Pathogen Reduction; HACCP 
Regulation, exporting countries were notified by FSIS that they would 
have to comply with the regulation or implement equivalent 
requirements. Foreign plants are required to adhere to the same 
deadlines as domestic plants. FSIS verifies that foreign countries meet 
U.S. requirements through review of relevant documents and on-site 
audits.
                             sentinel sites
    Mr. Skeen. Please identify the sentinel sites for the food safety 
initiative.
    [The information follows:]
Sentinel sites for 1998 are:
    California--Alameda, San Francisco metro area.
    Connecticut--all countries.
    Georgia--counties of Cobb, Clayton, DeKalb, Douglas, Fulton, 
Gwinnett, Newton, Rockdale, Forsyth, Pickens, Cherokee, Bartow, 
Paulding, Carroll, Coweta, Fayette, Spaulding, Henry, Walton, Barrow.
    Maryland--counties of Anne Arundel, Baltimore, Carroll, Harford, 
Howard, and Baltimore City.
    Minnesota--all counties.
    New York--counties of Genessee, Livingston, Monroe, Ontario, 
Orleans, Wayne, Yates.
    Oregon--all counties.
    Mr. Skeen. What are the criteria for selecting these sites?
    Respondent. The Centers for Disease Control and Prevention (CDC) 
manage the selection of sites. Site applications are ranked by a 
scoring system based on the State's existing infrastructure and ability 
to perform the programs. The criteria used by CDC in selecting the 
sentinel sites are part of their overall effort to establish Emerging 
Infections Program (EIP) projects with State and local health 
departments. These cooperative agreements will assist local, State, and 
national efforts to conduct surveillance and applied epidemiologic and 
laboratory research in emerging infectious diseases. CDC administers 
the EIP projects through an application and award process. Eligible 
applicants are the official public health agencies of States or their 
bona fide agents.
    Mr. Skeen. How much do FSIS and CDC respectively budget for the 
sentinel sites program?
    Respondent. For fiscal year 1998 FSIS is budgeting $1.5 million for 
the Sentinel Sites Survey, now known as FoodNet. For fiscal year 1998 
CDC is budgeting $14.5 million for their entire food safety initiative, 
of which $4.2 million is for FoodNet, the active surveillance network 
for CDC.
                       faim project expenditures
    Mr. Skeen. Please provide a table showing expenditures for the FAIM 
project from its first year with estimates for fiscal year 1998 and 
subsequent years.
    [The information follows:]

Field automation and information management

Fiscal year             [In thousands of dollars]
                                                            Expenditures
    1996......................................................    $7,230
    1997......................................................     9,485
    1998......................................................     8,760
    1999......................................................     8,525
    2000......................................................     (\1\)
---------------------------------------------------------------------------
\1\ To be determined.
---------------------------------------------------------------------------
                     traceback of imported product
    Mr. Skeen. Last year you testified that imported product that has 
passed inspection at the port of entry is treated as domestic product 
if it is later found to be unfit. Does this mean that we can not trace 
back a shipment of contaminated meat to its country of origin?
    Respondent. The Federal meat and poultry inspection laws provide 
that imported product that has passed inspection and entered the United 
States is treated as domestic product. Thus, our ability to trace the 
origin of the product is the same as it would be for domestic product. 
All imported products are labeled with the country of origin. Consumer-
size packages must maintain that labeling through final sale. In those 
cases where product is found unfit and the original labeling is intact, 
FSIS is able to trace it to the country of origin.
                      increase in non-salary costs
    Mr. Skeen. What is the purpose of the increase in ``non-salary 
costs'' mentioned on page 13-10 of the budget justification?
    Respondent. The increase in ``non-salary costs'' mentioned on page 
13-10 of the budget justification will defray the estimated increase in 
non-salary operating costs resulting from economic increases in the 
cost of goods and services.
       termination of florida meat and poultry inspection program
    Mr. Skeen. Why did Florida terminate its funding for the 
cooperative inspection program?
    Governor Lawton Chiles informed Secretary Glickman, in his letter 
of July 23, 1997, that the State budget adopted by the Florida 
legislature for the fiscal year 1997-98 reduced funding for the State 
meat and poultry inspection program sufficiently to necessitate 
termination of the State program in December 1997 when funds would be 
depleted. Details were not provided for the rationale used by the 
legislature to prioritize funds.
    Mr. Skeen. Have other states done this and do you expect others to 
do so?
    Respondent. FSIS has not received any notification that a State is 
planning to terminate its program. A list of designated states is 
provided for the record.
    [The information follows:]

                DATES USDA ASSUMED INTRASTATE INSPECTION                
------------------------------------------------------------------------
                 State:                        Meat           Poultry   
------------------------------------------------------------------------
Arkansas................................        06/01/81        01/02/71
California..............................        04/01/76        04/01/76
Colorado................................        07/01/75        01/02/71
Connecticut.............................        10/01/75        10/01/75
Florida.................................        12/02/97        12/02/97
Georgia.................................  ..............        01/02/71
Hawaii..................................        11/01/95        11/01/95
Idaho...................................        07/01/81        01/02/71
Kentucky................................        01/14/72        07/28/71
Maine...................................        05/12/80        01/02/71
Maryland................................        04/01/91        04/01/91
Massachusetts...........................        01/12/76        01/12/76
Michigan................................        10/03/71        01/02/71
Minnesota...............................        05/16/71        01/02/71
Missouri................................        08/18/72        08/18/72
Nebraska................................        10/01/71        07/28/71
Nevada..................................        07/01/73        07/01/73
New Hampshire...........................        08/07/78        08/07/78
New Jersey..............................        07/01/75        07/01/75
New York................................        07/16/75        04/11/77
North Dakota............................        06/22/70        01/02/71
Oregon..................................        07/01/72        01/02/71
Pennsylvania............................        07/17/72        10/31/71
Rhode Island............................        10/01/81        10/01/81
South Dakota............................  ..............        01/02/71
Tennessee...............................        10/01/75        10/01/75
Washington..............................        06/01/73        06/01/73
------------------------------------------------------------------------

                     origin of foodborne illnesses
    Mr. Skeen. Do you have any estimates of the percentage of foodborne 
illnesses originating in the home vs. retail, processing or production 
sites?
    Respondent. No, data is unavailable at this time to determine the 
origin of causes of foodborne illnesses.
                    food safety education initiative
    Mr. Skeen. On page 13-11 of the budget justification, you describe 
the ``FIGHT BAC'' graphic as the foundation of the multi-year food 
safety initiative. You are requesting $500,000 for this program as part 
of a $100 million initiative. Is ``FIGHT BAC'' more important to the 
initiative than research, risk assessment, and surveillance?
    Respondent. ``Fight BAC'' is the foundation of the multi-year Food 
Safety education initiative that is part of the overall President's 
Food Safety Initiative. The President's farm-to-table strategy for 
reducing foodborne illness recognizes that consumer education is 
necessary to ensure that preventive measures are taken at each step of 
the food handling continuum. The Fight BAC! education 
campaign is a critical component of the activities dedicated to 
preventing foodborne illness, such as research, risk assessment, and 
surveillance. From a public health viewpoint there is agreement in both 
the public and private sectors that investing in consumer education is 
an important step that should not be overlooked. No matter how safe the 
food supply, consumers will always be the last link in preventing 
foodborne illness.
    Mr. Skeen. Are your food safety education initiatives coordinated 
with the Extension Service?
    Respondent. FSIS and the Extension Service coordinate extensively 
on numerous food safety education projects. CSREES and FSIS were co-
sponsors, along with ARS,FDA, CDC and the Department of Education of 
the recent Food Safety Education Conference. CSREES and FSIS are the 
USDA representatives to the partnership for Food Safety Education. 
Building on the national campaign launched by the public-private 
Partnership for Food Safety Education in 1997, FSIS, CRREES and FDA 
will target specific programs to change unsafe behaviors used by home 
food handlers, cooks and food handlers in retail settings and in 
congregate feeding sites.
                    egg products inspection training
    Mr. Skeen. Will meat and poultry inspectors also be trained in egg 
products inspection?
    Respondent. Yes, meat and poultry inspectors will also be trained 
in egg products inspection when inspection coverage would be more 
efficiently provided by doing so.
                consumer education and budget activities
    Mr. Skeen. You are requesting increases in the Food Safety 
Initiative for education of consumers with parts of the requested 
increases going for import/export inspection and laboratory services. 
How do import export inspection and laboratory services relate to 
consumer education?
    Respondent. The requested increase for food safety education will 
assist in changing unsafe behaviors used by home food handlers, cooks 
and food handlers in retail setting and congregate feeding sites, and 
provide for development of materials to assist in educating school 
children about how to prevent foodborne illness. This increase is 
distributed proportionately to the Federal food inspection, import/
export inspection, and laboratory services activities because all three 
activities contribute to the production of safe food destined for 
consumers. The proposed expansion in food safety education will help to 
ensure the continued safety of both domestic and foreign meat, poultry, 
and egg products that have passed inspection by FSIS personnel and been 
subject to pathogen testing in FSIS laborators.
                            grants to states
    Mr. Skeen. Please provide a table showing the distribution of the 
grants to states for fiscal years 1997, 1998 and 1999.
    [The information follows:]

                        GRANTS TO STATES PROGRAM                        
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                 State                      1997       1998       1999  
------------------------------------------------------------------------
Alabama................................     $1,283     $1,321     $1,355
Alaska.................................        346        356        365
Arizona................................        605        623        639
Delaware...............................        217        223        229
Florida................................      2,029    \1\ 300  .........
Georgia................................      2,463      2,535      2,601
Illinois...............................      4,673      4,810      4,936
Indiana................................      1,695      1,745      1,790
Iowa...................................      1,055      1,086      1,114
Kansas.................................      1,404      1,445      1,483
Louisiana..............................      1,836      1,890      1,939
Mississippi............................      1,098      1,130      1,160
Montana................................        353        363        373
New Mexico.............................        421        433        445
North Carolina.........................      3,045      3,134      3,216
Ohio...................................      4,610      4,745      4,869
Oklahoma...............................      1,624      1,671      1,715
South Carolina.........................      1,184      1,219      1,251
South Dakota...........................        478        492        505
Texas..................................      4,752      4,891      5,019
Utah...................................        822        846        868
Vermont................................        295        304        312
Virginia...............................      1,304      1,342      1,377
West Virginia..........................        606        624        640
Wisconsin..............................      3,019      3,107      3,189
Wyoming................................        311        320        329
                                        ------------                    
      Total............................     41,528     40,955     41,719
------------------------------------------------------------------------
\1\ The Florida inspection program converted from State to Federal      
  Inspection on December 1, 1997.                                       

               pulsed-field gel electrophoresis patterns
    Mr. Skeen. What are Pulsed-Field Gel Electrophoresis patterns?
    Respondent. Pulsed-Field Gel Electrophoresis (PFGE) patterns are 
also known as DNA fingerprints. The DNA is released from the pathogen, 
enzymatically fragmented, and then the fragments are separated by size 
along the exis of electrocal flow in an agarose gel matrix. After 
electrophoresis, the gel is trained with a dye specific for nucleic 
acid fragments and examined under a UV light source. The resulting 
visible, separated bands are referred to as the pattern. Some patterns 
may contain 30-40 distinct bands. DNA from different organisms, 
subjected to PFGE, produced their own specific patterns particular to 
that organism. PFGE patterns or DNA fingerprints are used to identify 
individual strains of various organisms and can determine if strains 
from different sources are related, especially in epidemiological 
investigations.
                consumer surveillance information system
    Mr. Skeen. The Consumer Surveillance Information System (CSIS) 
logged 448 consumer complaints in fiscal year 1997. This seems to be a 
small number given the publicity food safety has received in the past 
three years. Did you expect this level of calls?
    Respondent. Prior to 1996, the Meatborne Hazard Control Center 
(MBHCC) was responsible for managing complaints involving meat and 
poultry products under USDA jurisdiction. In fiscal year 1996, the 
Consumer Surveillance Information System (CSIS) replaced the MBHCC. In 
fiscal year 1995, the MBHCC processed approximately 213 cases, and in 
fiscal year 1996 the newly implemented CSIS logged 219 cases. Thus, the 
448 cases processed by CSIS in fiscal year 1997 were over twice the 
number of cases in the previous two years. In the past, the number of 
complaints received by the MBHCC has varied from 290 to 420 cases per 
year. Therefore, the 448 consumer complaints reported to CSIS in fiscal 
year 1997, although higher than average, was not unexpected.
    Mr. Skeen. What do FSIS and other USDA agencies do to publicize the 
availability of CSIS?
    Respondent. The majority of complaints enter CSIS, which is managed 
by the FSIS Office of Public Health and Science, through the FSIS 
Compliance Program and the FSIS Meat and Poultry Hotline rather than 
direct consumer contact with CSIS. Therefore, complaints received by 
CSIS are generally screened by another agency division before entering 
the system. The FSIS Food Safety Education and Communication staff has 
published a document entitled ``What to Do If You Have a Problem with 
Food Products,'' which provides instructions on how to report a 
compliant to the Meat and Poultry Hotline. This document is available 
on the FSIS web site. Consumers may also lodge complaints by contacting 
the Compliance Program Office in their area. Compliance Officers are 
instructed to report cases involving illness or injury to CSIS.
    Mr. Skeen. What is the cost of operating CSIS?
    Respondent. The cost of operating CSIS includes an estimated 
$71,000 for the salary and benefits of one full-time GS-12 staff 
person, long distance phone calls to contact consumers, and limited 
laboratory analysis of products.
                foodborne disease cases reported to cdc
    Mr. Skeen. On page 13g-5 you state that only one to five percent of 
foodborne disease cases are believed to be reported to CDC. How was 
this estimate made and why is the figure so low?
    Respondent. The estimates are based on CDC studies of disease 
outbreaks where the number of people exposed to a known source of 
contamination can be compared to the number of people whobecame ill, 
sought medical care, had stool cultures taken, had a pathogen isolated 
from the stool, and had that finding reported to the local health 
department and subsequently to CDC. FSIS does not have information on 
the specific studies or calculations used by CDC.
                         dioxins and ball clay
    Mr. Skeen. On page 13g-9 you describe tracing dioxins to ball clay, 
an ingredient in soybean meal. Is ball clay widely used and are there 
now restrictions on its use?
    Respondent. Ball clay is widely used in the ceramic industry, and 
was used in feed as an anti-caking agent. It may no longer be used as a 
feed additive. In a letter dated October 7, 1997, the FDA asked 
producers or users of clay products in animal feeds to stop the 
practice of adding ball clay to animal feeds or to ingredients of 
animal feeds.
                   premature browning of ground beef
    Mr. Skeen. On page 13g-10 you report that some ground beef turns a 
well-done brown color even when only cooked to a rare temperature, 
below 160 degrees. Why is this?
    Respondent. Scientists at Kansas State University and the 
Agricultural Research Service (ARS) have observed that some ground beef 
may turn brown when cooked to less than 160 degrees. This observation 
has been shown to be related to the oxidation state of the myoglobin in 
the meat. That is, the oxidation state of myoglobin affects the 
temperature at which the ground meat turns brown. This means that the 
color of a cooked beef patty is not a sufficient indicator that 
pathogens such as E. Coli 0157:H7 have been killed. Additional studies 
by scientists at ARS have also found that freezing and thawing seems to 
have an affect on the temperature at which cooked ground beef turns 
brown. FSIS has conducted studies of cooking ground beef and has 
confirmed the ARS observation.
    The specific question asked, ``Why is this?'' can not be fully 
answered by FSIS at this time. The answer undoubtedly lies in a better 
understanding of the basic chemistry of myoglobin, a topic that 
requires a significant basic research effort.
    The focus of the FSIS project, was to determine the prevalence of 
low temperature browning in ground beef purchased at retail and cooked 
at home. The reason for undertaking this study is to develop the 
scientific basis for advice that will be provided to consumers. 
Preliminary results indicate that some premature browning does occur. 
However, the premature browning appears to be more a problem of gradual 
changes and unevenness in color within a cooked patty than being a 
discrete effect (a sharp color change).
               foreign country equivalence determinations
    Mr. Skeen. Please list the countries for which you did equivalence 
determinations as described on page 31g-17 of the budget justification.
    Respondent. The following is a list of countries for which FSIS did 
equivalence determinations as described on page 13g-17 of the budget 
justification.
    [The information follows:]
    Countries Which Received Equivalence Determinations: Argentina, 
Australia, Austria, Belgium, Brazil, Canada, Costa Rica, Croatia, Czech 
Republic, Denmark, Dominican Republic, Finland, France, Germany, 
Guatemala, Honduras, Hong Kong, Hungary, Iceland, Ireland, Israel, 
Italy, Japan, Mexico, Netherlands, New Zealand, Nicaragua, Northern 
Ireland, Paraguay, Poland, Romania, Slovenia, Spain, Sweden, 
Switzerland, United Kingdom, and Uruguay.
                          bse risk assessment
    Mr. Skeen. When do you plan to carry out the BSE risk assessment 
mentioned on page 13g-21?
    Respondent. The formal BSE risk analysis is estimated to be 
completed 24 months from the starting date of the cooperative 
agreement, which is estimated to be May, 1998. At this time an 
agreement has not been finalized.
                   general standard on food additives
    Mr. Skeen. What is the General Standard on Food Additives?
    Respondent. In 1989, the Codex Committee on Food Additives and 
Contaminants (CCFAC--a committee of the Codex Alimentarius Commission, 
FAO, WHO, UN)--began work on a General Standard for Food Additives 
(GSFA) to establish permitted levels of use of food additives in 
various food groups to ensure that the intake of additives does not 
exceed the acceptable daily intake. The GSFA is being developed by a 
Working Group of the CCFAC, which is chaired by Dr. Alan Rulis, FDA the 
United States delegates to the CCFAC, and is not completed.
    Based on input from the government of countries and from 
international non-government organizations participating on the CCFAC, 
the GSFA sets the conditions under which permitted food additives may 
be used in all foods whether or not they have previously been 
standardized by Codex. Only food additives which have been evaluated by 
the Joint GAO/WHO Expert Committee on Food Additives (JECFA) and found 
acceptable for use in foods are included in the GSFA.
                   increases in object classification
    Mr. Skeen. Please explain the increase in Object Class 21, Travel, 
over the current fiscal year.
    Respondent. The increase in Object Class 21, Travel, for fiscal 
year 1999 of $1.4 million is primarily associated with $0.6 million for 
defraying the estimated economic increase in the cost of inspection 
travel, which includes the use of GSA vehicles and mileage 
reimbursements for use of privately owned vehicles. In addition, the 
1999 request includes $0.4 million for travel to conduct 25 State 
program audits, and $0.3 million for an enhanced compliance presence to 
conduct increased inspection activity in distribution channels beyond 
the in-plant setting in order to ensure food safety from the farm to 
the table. The balance reflects a net increase of $0.1 for travel 
associated with HACCP implementation in Egg Products Inspection, and 
Federal operation of the Florida Inspection Program; and a reduction in 
non-implant field travel as a result of FAIM implementation.
    Mr. Skeen. Please explain the increase in Object Class 25.2, Other 
Services, over the current fiscal year.
    Respondent. The increase in Object Class 25.2, Other Services, for 
fiscal year 1999 of $3.8 million is primarily associated with $3 
million of increased obligations for the President's Food Safety 
initiative for contracts and cooperative agreements associated with 
risk assessment and producer education and $0.5 million for food safety 
education of consumers and those who prepare food. In addition, $0.3 
million is for defraying economic increases in the costs of contracted 
services.
    Mr. Skeen. Please explain the increase in Object Class 31, 
Equipment, over the current fiscal year.
    Respondent. The increase in Object Class 31, Equipment, for fiscal 
year 1999 of $2 million is primarily associated with $1.4 million of 
increased obligations for upgrading technology used by inspection 
personnel in the fully implemented HACCP-based inspection program. 
Examples of this technology include stethoscopes for veterinary medical 
officers to make a more through determination of the health status of 
incoming animals for slaughter and improved thermometers to perform 
verification tasks required by HACCP. In addition, $.03 million will 
support FSIS performing 25 State program audits. The balance of the 
increase is for defraying economic increases in the cost of goods and 
services.
    Mr. Skeen. Please explain the increase in Object Class 41, Grants, 
Subsidies and Contributions, over the current fiscal year.
    Respondent. The increase in Object Class 41 of $8.6 million 
consists of the total increase in two budget activities: the increase 
of $7.8 million for the President's Food Safety Initiative in special 
assistance for State programs, and $0.8 million for the increase in 
Grants-to-States. The request for special assistance for State programs 
reflects the proposed increase in the Federal share of State costs, 
from 50 percent to 75 percent, for assisting the State programs with 
HACCP implementation through infrastructure support in the areas of 
automation, laboratory pathogen testing, and inspector training. The 
requested increase in Grants-to-States is primary for the increased 
cost associated with pay for State inspectors, and is offset by 
decreasing associated with termination of the Florida State inspection 
program and projected savings from the implementation of FAIM in the 
State programs.
                           user fee proposal
    Mr. Skeen. Madame Under Secretary, in talking about user fee 
legislation your testimony says ``in the near future.'' That is what 
Secretary Glickman told us one month ago. That is what OMB told us one 
year ago. When is that legislation coming up?
    Respondent. The proposed user fee legislation is presently in 
clearance at the Office of Management and Budget (OMB) and will be 
submitted to Congress very soon.
    Mr. Skeen. How did you arrive at the calculation of $515 million in 
user fees for the federal food inspection function?
    Respondent. The user fee proposal is intended to recover the full 
cost of the Federal inspection program, which includes 100 percent of 
the cost estimates for the activities of Federal food inspection, 
import/export inspection, laboratory services, and field automation and 
information management. The fiscal year 1999 program level estimate for 
Federal food inspection is $515,660,000.
    Mr. Skeen. Last year your user fee proposal was to cover food 
inspection costs and import export inspection. This year you have added 
laboratory services and the computer program known as FAIM. Why have 
you proposed to cover the additional activities with user fees?
    Respondent. The user fee proposal is intended to recover the full 
cost of the Federal inspection program. Laboratory services and FAIM 
are part of the Federal inspection program and provide essential 
support for inspection activities.
    Mr. Skeen. Why do you not propose to pay for all FSIS costs with 
user fees?
    Respondent. Appropriated funding is requested for the grants to 
States and special assistance to State programs activities in order to 
maintain the continuity of funding in the State inspection programs and 
ensure successful implementation of HACCP requirements. Special 
assistance to State programs is a critical element of the President's 
Food Safety Initiative to strengthen the Federal-State food safety 
partnership.
    Mr. Skeen. Last year your user fee proposal budgeted $386.1 million 
for federal food inspection and $3.9 million for import-export 
inspection. This year your budget for those activities is $515.6 
million and $12.2 million respectively, a 33 percent and a 200 percent 
increase. Please explain these large increases.
    Respondent. The 1998 user fee proposal was intended to recover the 
direct, on-site cost of inspection. whereas the 1999 proposal is 
intended to recover the full cost of the Federal inspection program. 
While the 1998 proposal included only direct costs for inspection, the 
1999 proposal includes both direct and indirect costs for all 
activities in the Federal inspection program. In addition, the 1998 
proposal distributed one percent of the proposed fees to import-export 
inspection, which represented less than 30 percent of the total 
estimate for import-export inspection, and 99 percent of the proposed 
fees to Federal food inspection, which represented 78 percent of 
Federal food inspection. Therefore, on an activity basis, the 
percentage increase in the 1999 user fee proposal is much higher for 
import-export inspection than for Federal food inspection.
    Mr. Skeen. How would user fees be charged to plants/ by number of 
inspectors, volume of production, or some other means?
    Respondent. Upon enactment of user fee legislation we will begin a 
rulemaking process, including public meetings, to address how fees will 
be charged. To expedite the implementation of user fees, the Department 
has evaluated several options for charging user fees and recommends 
that user fees be charged on the basis of volume of production. Under 
this recommendation, an average inspection cost per pound of production 
would be assessed in each of four industry segments--Egg Products 
Inspection, Imported Products Inspection, Meat and Poultry Processing 
Inspection, and Meat and Poultry Slaughter Inspection. Within each 
segment, the average cost per pound would be based on estimated fiscal 
year 1999 inspection costs and actual production for fiscal year 1997.
    Mr. Skeen. From press reports and from our meetings with interested 
parties it appears that the authorizing committees, the industry, and 
consumer groups oppose user fees. Can you identify any groups who 
support the idea other than OMB?
    Respondent. If the user fee proposal is enacted, the primary 
beneficiary will be the American public. User fees will provide the 
required funds to maintain a strong public health protection for meat, 
poultry and egg products.
    Mr. Skeen. Let's suppose that user fee legislation passes. How long 
will it take the Department to product final regulations on user fees?
    Respondent. We will do what is necessary to produce final 
regulations on a timely basis in order to implement new user fees at 
the start of fiscal year 1999.
    Mr. Skeen. You are requesting an increase of $100 million for 
start-up costs associated with the user fee program and to maintain a 
reserve. Please explain the reason for the start-up costs and the 
reserve and break down the costs for each.
    Respondent. Establishments will be billed on a monthly basis, with 
fees due by the end of the month following the billing period. Because 
no fees will be received in the first month of the fiscal year, start-
up funding is requested to cover FSIS budget obligations that must be 
paid in the first month. In addition, a reserve is needed to maintain a 
stable Federal inspection program as the flow of user fee revenue may 
not match estimated costs. Of the total $100 million requests, 
estimated costs include $48 million for fiscal year start-up, and $52 
million for program reserves.
                  fsis food safety education programs
    Mr. Bonilla. You have requested $500,000 for the President's Food 
Safety Initiative for food safety education of consumers and those who 
prepare food. Why is FSIS engaged in these activities and not the 
Research, Education and Economic mission at USDA?
    Respondent. FSIS has a long-standing mission to conduct national 
food safety education programs about safe handling of meat and poultry 
products. Throughout the 25 or more years of conducting food safety 
education the agency has worked very closely with the CSREES.
    Most of the CSREES resource allocation is provided through grant 
funding to local extension offices in individual sates or localities. 
Projects are developed on a smaller scale. FSIS conducts educational 
programs on a national level and provides local extension specialists 
with tools to expand the impact of the national programs at the grass-
roots level. For example, FSIS as a partner in the Fight 
BAC!TM campaign, contributed to the production of brochures, 
camera-ready art and action kits which are supplied to extension 
specialists. FSIS is funding the brochure's distribution through the 
Consume Information Center (CIC). Extension specialists can direct 
their constituents to that resource.
    For 1999, FSIS is proposing to develop extensive food safety 
education programs that will be designed to be able to be incorporated 
into core curriculums by science, health, and home economics teachers. 
Once the primary programs are developed on the national level, CSREES 
can provide the tools and material to each State and university 
specialist for their own use with teachers in their systems.
                           regulatory reform
    Mr. Bonilla. What progress has FSIS made to eliminate old 
inspection regulations that were not compatible with HACCP?
    Respondent. In August 1997 FSIS published the proposed regulation 
on Sanitation Requirements for Official Meat and Poultry 
Establishments, which will finalized in the summer of 1998. Also, in 
January 1998 FSIS published the proposed regulation on Rules of 
Practice. Both of these regulations eliminated unnecessary differences 
between old regulations and current ones. These regulations are more 
compatible with the HACCP requirements and convert prescriptive 
requirements to performance standards.
    We are also currently drafting several performance standard 
regulations which replaces current prescriptive and detailed 
regulations. These performance standards would be consistent with FSIS 
requirements for establishment-operated HACCP systems and with the 
agency's food safety regulatory strategy.
                        haccp inspector training
    Mr. Bonilla. Do you think the ``Just-in-Time'' training approach by 
FSIS provided adequate training in HACCP for inspectors?
    Respondent. Yes., The HACCP Technical Training Program provides 
inspection personnel with the required information and background on 
HACCP and its principles; and knowledge, understanding, and techniques 
to apply the inspection procedures established to determine plant's 
compliance/noncompliance with Pathogen Reduction and HACCP 
requirements. The ``just-in-time'' approach allows the agency to: (1) 
link the training to the four-phase implementation schedule contained 
in the Pathogen Reduction and HACCP rule spanning a period of 6 to 42 
months; (2) make the best use of scarce human resources; (3) minimize 
the disruption of program services; and (4) have employees immediately 
apply their newfound knowledge and skills, thus eliminating the need to 
establish and maintain costly re-training or refresher programs.
    Mr. Bonilla. What follow up or additional training is available to 
inspectors that request it or have questions?
    Respondent. We have established multiple means for employees to 
become more familiar and comfortable with the new Pathogen Reduction 
and HACCP inspection procedures as follows: (1) computer Based training 
programs; (2) issuance of a Reference Guide on the HACCP-based 
inspection; (3) around the clock availability of technical assistance 
from the Technical Service Center through the use of e-mail and a 800 
number; (4) day-to-day guidance, support and coaching by supervisors; 
and (5) additional training when new needs are identified, especially 
for mid-level supervisors.
                        contents of haccp plans
    Mr. Bonilla. Did the final rule issued for HACCP specifically state 
that a HACCP plan is required to have a Critical Control Point in each 
of the nine slaughter/cut-up categories in meat and poultry plants?
    Respondent. No, the PR/HACCP final rule requires that there be a 
CCP for each food safety hazard, that is identified by an establishment 
as reasonably likely to occur. There appeared to be some confusion on 
this matter, so FSIS published the following two January 30, 1998, 
Federal Register Notices for clarification purposes:
    1. Docket No. 97-082N; Contents of HACCP Plans; Critical Control 
Points.--This notice was issued to ensure hat the owners and operators 
of federally inspected establishments are award that the identification 
of appropriate critical control points is crucial.
    2. Docket No. 97-074N; Contents of HACCP Plans.--This notice was 
issued to ensure that the owners and operators of federally inspected 
establishments are aware that the hazard analysis and critical control 
point (HACCP) system regulations required that a HACCP plan be a self-
contained document. In particular, the Agency does not view references 
to good manufacturing practices, or establishment actions in accordance 
with good manufacturing practices, as satisfying the requirements for 
the contents of an HACCP plan.
                       haccp benefits to industry
    Ms. DeLauro. HACCP is a great victory for American consumers and 
their families. Congratulations on all of your efforts to ensure a 
smooth start to this program. While the benefits to consumers are 
obvious, could you highlight some of the benefits to industry of 
putting HACCP in place?
    Respondent. There are several benefits to the regulated industry 
from implementation of HACCP. First, implementation of HACCP preventive 
process control systems, in conjunction with food safety performance 
standards like the Salmonella performance standard, provide the 
industry with maximum flexibility in choosing the means by which they 
meet regulatory requirements. One of the primary advantages of HACCP is 
that it provides industry the flexibility to innovate. Second, again it 
is the combination of HACCP and food safety performance standards, 
which we believe will enhance consumer confidence in the safety of the 
food supply. Finally, the broad international consensus that supports 
HACCP systems will result in enhanced trading opportunities for 
establishments that have implemented these systems.
    Ms. DeLauro. One of the unique characteristics of HACCP is that, 
rather than a one-size-fits-all approach, each plant has designed its 
own plan to meet USDA food safety standards. Would you give us a few 
examples of such customized plans? How have their differences benefited 
the individual plants while still guaranteeing the same level of food 
safety?
    Respondent. HACCP does give inspected establishments the 
opportunity to have customized plans for meeting food safety regulatory 
requirements. This means that the plants that are required to meet the 
Salmonella performance standard have maximum flexibility in determining 
how they will do so. There are a variety of anti-microbial 
interventions that establishments might choose to make sure they meet 
this requirement. Some establishments that slaughter livestock may 
decide to use steam vacuum technology at various points in their 
slaughter and sanitary dressing procedures; others may decide to use 
steam pasteurization; still others may choose a very simple approach 
such as slowing production lines and taking more time and paying 
greater attention to each carcass as it moves through the process.
             food safety risks without haccp implementation
    Ms. DeLauro. What food safety risks would we run if we did not 
implement HACCP?
    Respondent. If we had not chosen to implement HACCP, it is likely 
that all food safety risks would be increased because of the 
inefficiencies and limitations of the approach we have used, which is 
to detect problems late in the process and try to remove product from 
distribution channels. HACCP is a means for industry to control and 
prevent problems. By controlling the production process from start to 
finish rather than detecting problems at the end of the line, food 
safety will be enhanced. Without HACCP, one would expect to see the 
same or increased levels of foodborne illnesses. It is the indivisible 
hazards--microbial contamination, especially--that are particularly 
well suited to a HACCP approach. Thus, the risks to the public of 
foodborne illness form microbial sources should be reduced.
          preventative research findings on foodborne illness
    Ms. DeLauro. A lot of research has been completed on how to prevent 
foodborne illness. How do we take what we have learned and actually 
implement it so that American families can benefit from this knowledge?
    Respondent. FSIS has begun to implement important improvements in 
how meat and poultry are handled in slaughter and processing plants 
with respect to pathogen reduction. The Agency is also incorporating 
preventative research findings into its total farm-to-table food safety 
strategy. Education programs have been initiated to teach food service 
workers and consumers on steps they can take to prevent foodborne 
illness. Through this farm-to-table approach, American families will 
benefit from research already conducted and from future research as 
findings are continuously incorporated into the processes.
    Following is information on specific research projects that have a 
direct impact on consumers:
    The hamburger browning project conducted by ARS in cooperation with 
FSIS showed some hamburger meat could appear cooked before reaching a 
safe cooking temperature. FSIS is using these research results to 
develop educational material for consumers.
    Other ARS/FSIS projects include carcass cleaning procedures 
developed or in development at Clay Center, Nebraska for beef and pork; 
Wyndmoor, Pennsylvania for chickens, and Athens, Georgia for poultry. 
These procedures will give industry the ability to supply both 
consumers and restaurants with safer raw products.
    ARS has also been a pioneer in irradiation research of meat and 
poultry products. This research has shown both the factors optimizing 
destruction of pathogenic bacteria and factors that would increase 
consumer risk if not avoided. ARS irradiation research provided 
important information for the new regulations approving the use of 
irradiation in beef.
    For well over a decade, ARS/FSIS projects have focused on 
preventing pathogen colonization of food animals. Success has been 
noted at the Athens, GA and College Station, Texas facilities where 
methods on competitive exclusion in poultry have been patented and 
licensed to industry. These methods will enable producers to supply 
processors with live birds carrying lesser amounts of pathogens that 
are of public health concern.
    Other work performed by ARS has led to a better understanding of 
how to protect the food supply both in retail establishments and the 
home. Some of the findings from ARS investigations have been used by 
the FDA in its ``Food Code,'' which gives guidance to retail food 
establishments. Other ARS research was useful in developing the ``Fight 
BAC!'' campaign, which teaches school children about reducing foodborne 
illness.
    A primary component of the sentinel sites project, known as 
FoodNet, is a survey of the general population to obtain information 
about what people eat, where they eat, how they handle and prepare 
food, and what their food preferences are. This information will allow 
FSIS to structure a consumer education campaign to target specific 
population groups with specific messages about food safety and proper 
handling and preparation techniques, thereby contributing to a 
reduction in the cases of foodborne illness.
                    haccp technical training program
    Ms. DeLauro. The President's Food Safety Initiative calls for 
better use of scientific analysis to improve our food safety system. 
Scientific testing is critical because many harmful pathogens cannot be 
detected using current inspection methods. How will FSIS train 
inspectors so that they have the skills to implement improved food 
safety standards?
    [The information follows:]
    The HACCP Technical Training Program being given to inspection 
personnel contains the following modules:
    1. Microbiological Testing--E. coli: Upon completion of this 
module, participants will be able to:
    Explain why E. coli testing is used.
    State who will conduct E. coli testing.
    Explain the difference between process microbiological control 
guidelines and performance standards.
    Explain how industry defines greater than very low volume and very 
low volume plants.
    List dates for implementation of E. coli testing according to plan 
volume.
    List frequency based on plant volume.
    List the species that must be tested.
    Describe how industry may decide which of the three methods of 
sample collection to use for testing.
    Name the sites of sample collection for cattle, swine, and turkeys. 
Name the methods used to sample chickens and/or turkeys.
    List the plant record keeping requirements for its E. coli testing 
program.
    State the options that the industry may select for demonstrating 
statistically based process control.
    Discuss E. coli sampling techniques recommended in the FSIS 
guidelines.
    2. Microbiological Testing--Salmonella: Upon completion of this 
module, participants will be able to:
    Explain why Salmonella testing is used.
    State who will conduct Salmonella testing.
    Explain the difference between process microbiological control 
guidelines and performance standards.
    List the species and types of product that must be tested.
    List the sampling sites for cattle, swine, and turkeys. Name the 
methods used to sample chickens.
    State what determines the compliance dates for Salmonella testing.
    3. E. coli--Basic and Other Compliance/Noncompliance: Upon 
completion of this module, participants will be able to:
    Identify the role of in-plant inspection personnel in E. coli 
testing verification.
    State the regulatory requirements for E. coli plans and procedures.
    Verify that E. coli plans/procedures meet regulatory or performance 
standards requirements.
    Document findings and take enforcement actions when regulatory 
requirements are not met.
    Use noncompliance trend indicators.
    4. Other Compliance/Noncompliance, Salmonella Sampling: Upon 
completion of this module, participants will be able to:
    State who will conduct Salmonella testing.
    List the species and products that must be tested.
    State at what point in the process to sample each product.
    Describe the aseptic sampling method.
    List the sampling sites for beef, swine, and turkey carcasses.
    Describe the sampling method for chicken carcasses and ground 
product.
    Describe the sample storage and shipping procedures.
                     food net system in connecticut
    Ms. DeLauro. I understand that to get baseline data on the 
incidence of foodborne illness attributable to meat, poultry, and egg 
consumption, FSIS is working with the Centers for Disease Control and 
Prevention and the FDA to monitor seven foodborne illness sites through 
the FoodNet system. One of these sites is in Connecticut. Would you 
describe the monitoring program there? What results are you finding?
    Respondent. Beginning in 1998, all counties in Connecticut are 
participating in FoodNet. Preliminary data for 1997 for Connecticut 
shows that the total actual number of laboratory-confirmed cases of 
foodborne illness was 1.041, of which there were 477 caused by 
Campylobacter, 34 from E. Coli 0157:H7, 7 from Listeria, 430 from 
Salmonella, 77 from Shigella, 4 from Vibrio, and 12 from Yersinia.
                           fight bac! program
    Ms. DeLauro. I commend FSIS for its active role in consumer 
education, especially the FIGHT BAC! program. Educating children about 
the importance of food safety is essential. Would you give me some more 
details on this part of the program?
    Respondent. FSIS recognizes the importance of reaching children 
with food safety information. Because understanding and practicing 
proper food safety techniques can significantly reduce foodborne 
illness, children are identified as a high priority group to receive 
food safety education under the President's Food Safety Initiative.
    FSIS is involved in many activities to reach children with food 
safety information. Currently, FSIS is advising the Partnership for 
Food Safety Education on two school--based initiatives. The first is 
development of a ``Presenter's Guide'' for introducing the Fight BAC! 
TM message to children in kindergarten through third grade. 
The presenters, our partners at the local level--i.e., cooperative 
extension agents, health and consumer educators--have many 
opportunities to present information in a classroom setting. This 
program will include interactive activities to engage the children, as 
well as information to take home to parents. The goal is to have this 
program in place for September 1998.
    The Partnership is also in the developmental stages of creating a 
science-based food safety education program for children in grades 
three through six. This longer-term project will meet the educational 
needs of children as they are just beginning food preparation in the 
home.
    Both of these projects are based on findings of a report, 
Evaluating the Placement of Food Safety Education in American Schools, 
contracted for by FSIS and the Food and Drug Administration. Never 
before has an educational survey been conducted to identify at which 
subjects, grade levels, and school personnel food safety education 
should be directed. This report, currently under review, will serve as 
the foundation for developing relevant and effective education programs 
for years to come.
    Ms. DeLauro. How many children are you reaching?
    Respondent. FSIS, in partnership with the American Culinary 
Federation, is reaching out to the youngest consumers--four and five 
year-olds--and their parents, with a coloring book on food safety. The 
coloring book, which teaches the basics of safe food handling and the 
very important message of hand washing, was distributed to 80,000 day 
care centers nationwide. Requests for an additional 100,000 copies are 
currently being filled. The Fight BAC! TM message is 
featured on the first page of the coloring book. In cooperation with 
FDA, the coloring book is now featured on the government's food safety 
Web site.
    And teenagers are also getting the food safety message with a 
highly successful video program, The Danger Zone. Through a video tape 
and teacher's guide, the fundamentals of food safety are taught in an 
educational and entertaining manner.
    Ms. DeLauro. Are there plans to expand this program?
    Respondent. Planning is underway for National Food Safety Education 
Month in September. FSIS is working with FDA, USDA's Food and Nutrition 
Service, and the American School FoodService Association to distribute 
a poster to all elementary school foodservice managers. The poster 
focuses on the ``keep it clean'' message on one side and the Fight BAC! 
TM message on the other. This poster will be sent to 
approximately 50,000 elementary schools in August.
    With various education materials now available or under 
development, FSIS has the potential to reach millions of school 
children with food safety information.
                     suspension of plant inspection
    Mr. Walsh. We have heard from several meat and poultry processors 
that FSIS is shutting down plants when legitimate factual disputes 
exist and before a plant can present its side of the story. Shouldn't 
plants have the opportunity to demonstrate it is in compliance, or have 
an opportunity to achieve compliance before plants are shut down?
    Respondent. FSIS is fully committed to ensuring that plants are 
granted their full due process rights before taking enforcement 
actions. However, it is important to note that the courts have long 
recognized that prior notice and an opportunity to be heard are not 
mandatory when the Government must act immediately to protect the 
public health. Thus, under the Federal Meat Inspection Act and the 
Poultry Products Inspection Act, if an inspector cannot be sure that a 
product is not adulterated, he or she is empowered to withhold the mark 
of inspection, even though this means that the plant cannot ship the 
affected product and thus, in some circumstances, is effectively shut 
down, without providing prior notice to the plant. It should be noted, 
however, that most withholding actions have been preceded by numerous 
process deficiency reports or noncompliance reports that give the plant 
ample notice that it has a significant problem needing immediate 
attention.
    Mr. Walsh. While I recognize that USDA is engaged in rulemaking 
concerning rules of practice, what are USDA's plans in the interim to 
address this serious issue of due process?
    Respondent. If the plant does not take adequate corrective actions 
in response to the withholding action for adulterated products, the 
Agency frequently suspends inspection because of the continuing public 
health concern and provides an opportunity for appeal after the 
suspension is in effect. While the Agency believes that doing so is 
fully consistent with the due process rights of plants, it has recently 
discovered, as a result of its review of suspension and of industry 
appeals, that, in some instances plants should be provided additional 
notice and opportunity to be heard when available evidence shows there 
is no immediate concern about product adulteration. The Agency intends 
to modify its procedures to reflect this determination; to revise its 
guidelines on appeals to clarify what matters should be appealed, how 
to appeal, and the Agency's appeal procedures; and to review the 
comments on the Rules of Practice proposal and issue a final rule in a 
timely manner.
                           regulatory reform
    Mr. Walsh. During the development of USDA's HACCP/pathogen 
reduction regulations, the department said it was going to eliminate 
old regulations that were not in compliance with HACCP. Can you tell me 
what progress has been made in addressing this issue? (Little progress 
has been made to date.)
    Respondent. In August 1997 FSIS published a final rule to eliminate 
the requirement for prior approval of facilities and equipment. In 
August 1997 FSIS published the proposed regulation on Sanitation 
Requirements for Official Meat and Poultry Establishments, which will 
be finalized in the summer of 1998. Also, in January 1998 FSIS 
published the proposed regulation on Rules of Practice. Both of these 
regulations eliminated unnecessary differences between old regulations 
and current ones. These regulations are more compatible with the HACCP 
requirements and convert prescriptive requirements to performance 
standards.
    Mr. Walsh. My concern is that we now have a new system that is 
enforcing the old rules. How does the department, and how quickly does 
the department, plan to rectify this situation?
    Respondent. We are also currently drafting several performance 
standard regulations that replace current prescriptive and detailed 
regulations. These performance standards will be consistent with FSIS 
requirements for establishment-operated HACCP systems and with the 
agency's food safety regulatory strategy.
                        haccp inspector training
    Mr. Walsh. There have been reports from plants that inspectors are 
still operating in much the same manner as they were before HACCP was 
implemented in that they are shutting down plants based on 
questionable, subjective inspection decisions. Much of this is due to 
concern over inadequate training procedures for FSIS inspectors on the 
new HACCP system. What plans do you have to better train or educate 
inspectors in order to ensure that inspection decisions are based on 
scientifically sound principles?
    Respondent. You can be assured that the agency is concerned about 
the way inspection personnel carry out their regulatory 
responsibilities. For the first time in the history of implementing 
technical program changes, the Agency included a module on Business 
Relations in the HACCP Technical Training Program. It focuses on the 
concepts and practices that inspection personnel need to know to 
establish and maintain an effective business relationship with plant 
owners, operators and employees. It is centered on the following five 
relationship principles:
Principle 1--Maintain, open, honest, and straightforward 
        communications:
    Meaning and intent is conveyed by more than words alone. Tone of 
voice, expression, listening ability and apparent receptiveness to the 
responses of others all has an impact on those you wish to reach. 
Policy that is published in regulations and directives must be known, 
understood and consistently applied to make communications effective. 
Communications must also be consistent with long-range interests and 
goals.
Principle 2--Have mutual respect:
    Give respect, get respect. As Civil Service employees, our behavior 
must not be abusive or disrespectful of those we regulate. Do not 
permit your behavior to give people cause to question your motives as 
being anything more than fair and objective.
Principle 3--Be issues-oriented, do not personalize:
    We must stay focused on the issue(s) being discussed and not let 
personalities get in the way of doing our jobs. If others personalize a 
situation, do not get hooked. We must discipline ourselves not to let 
personal problems and preferences influence our work behavior and 
actions.
Principle 4--Maintain a work environment that is absent of the fear of 
        retaliation and intimidation:
    We must have an environment that permits the decisions of 
inspections and supervisors to be questioned without fear of 
retaliatory and intimidation actions. Employees and supervisors must 
understand that it is OK for the industry to appeal decisions. Plant 
officials should feel free to question the decisions and actions of 
inspection personnel. Some industry officials believe that inspectors 
and supervisors will harass, retaliate, and intimidate them whenever 
inspection personnel decisions and actions are questioned. However, we 
must be sure that our regulatory decisions are able to withstand the 
scrutiny and criticism of others.
Principle 5--Understand each other's role and responsibilities:
    There are those who believe that the industry's first commitment is 
to profit, and secondarily to produce a safe, wholesome, and 
unadulterated meat and poultry product. However, meatpackers and 
processors must produce safe food in order to make a profit and to stay 
in business. We will operate under the premise that the industry is 
responsible for producing safe, wholesome, and unadulterated meat and 
poultry products.
                           regulatory reform
    Mr. Walsh. Nearly three years ago, Secretary Glickman committed in 
a letter to me that FSIS would accelerate its work in the area of 
preventing bureaucratic layering and the waste of public and private 
funds in the meat and poultry inspection system. In the past three 
years. Can you specify which regulations from the old inspection system 
have been deleted?
    Respondent. FSIS has published regulations to prevent bureaucratic 
layering in the meat and poultry inspection system. In August 1997, a 
final regulation was published titled Elimination of Prior Approval 
Requirements for Establishment Drawings and Specifications, Equipment, 
and Certain Partial Quality Control Programs. This regulation removed 
the requirements for prior approval by FSIS of establishment drawings, 
specifications, and equipment used in official establishments.
    The Agency has also deleted approximately 15 directives concerning 
FSIS food inspectors. The deletion of these directives eliminates 
bureaucratic layering in the meat and poultry inspection system. All 
remaining program directives are being reviewed for revision or 
elimination.
    Mr. Walsh. What do you still have to accomplish and in your view, 
how long will it take?
    Respondent. In the summer of 1998 the Sanitation Requirements for 
Official Meat and Poultry Establishments regulation will be finalized. 
When this rule is final it will delete some of the existing sanitation 
requirements that are no longer needed in light of the Agency's HACCP 
and Sanitation Standard Operating Procedure requirements. Also, the 
final Sanitation regulations will eliminate 11 pages from the Code of 
Federal Regulations.
    In addition, we are currently drafting several performance standard 
regulations that replace current prescriptive and detailed regulations.
                     communication with inspectors
    Mr. Walsh. With over 7000 individuals in the field inspecting meat 
and poultry for safety and wholesomeness, it must be a challenge to 
keep everyone equally trained and informed--particularly in light of 
all the new research and development in the area of pathogen-fighting 
technologies in plants. Can you tell us a little bit about how you 
communicate with inspectors, specifically: Do you have the ability to 
simultaneously inform all inspectors of a change in rules or a new 
hazard or outbreak?
    Respondent. Yes, FSIS can inform all inspectors about regular and 
routine changes, through written agency regulations, directives, and 
notices, coupled with special training and correlation programs. 
Through electronic mail, FSIS has the ability to broadcast a message 
immediately to all FAIM users. Through FAIM, as of the end of fiscal 
year 1997, FSIS can simultaneously reach all Circuit Supervisors, all 
Compliance Officers, all import inspectors, plus all domestic 
inspectors in ten of the eighteen district offices. Domestic inspectors 
in the remaining eight districts are scheduled to be automated in 
fiscal year 1999 and fiscal year 2000.
                 employment requirements for inspectors
    Mr. Walsh. Do you require inspectors to demonstrate a certain level 
of job proficiency through some sort of testing or certification either 
before hiring or as part of a performance review?
    Respondent. There are specific eligibility requirements associated 
with both veterinarians and food inspectors who are in the field 
performing ``inspection'' assignments. These basic eligibility 
requirements are established by the Office of Personnel Management 
(OPM).
    For veterinarians, a Doctorate of Veterinary Medicine is required 
in order for the individual to be employed. The advanced degree is then 
supplemented by Agency training and instruction once the new 
veterinarian reports for duty.
    For full-time food inspectors, the basic eligibility requirement 
again established by OPM is one year of specialized work experience 
performing responsibly in the food handling, food preparation, or food 
processing industry or successful completion of a 4 year college degree 
with minimally 12 semester hours of science course work included. 
Beyond satisfying basic qualifications, the applicant must then take 
and pass an OPM validated and administered examination that includes a 
mathematics component. The individual must not only achieve a passing 
minimum score for the entire test but must achieve a passing score on 
the mathematics component as well. Failure to ``pass'' either results 
in the individual being ineligible for further consideration. As with 
veterinarians, Food Inspectors who are hired received technical 
instruction regarding their assigned duties and responsibilities at the 
Training Center in College Station, Texas.
               implementation of new rules or directives
    Mr. Walsh. How long would you estimate it takes to get a new rule 
or directive explained to your inspection work force?
    Respondent. It depends on the complexity and scope of the change. 
The agency attempts to establish implementation dates that allow for 
sufficient front-end time to equip the work force to perform new and 
different inspection procedures.
    For instance, in the implementation of the Pathogen Reduction and 
HACCP rule, a special approach was used to equip the inspection and 
compliance field work force to carry out its new job requirements.
    The training of the field inspection and compliance workforce is 
essential to effectively determine that meat and poultry plants are in 
compliance with the regulatory mandates contained in the Pathogen 
Reduction and HACCP (PR/HACCP) rule. Field inspection and compliance 
personnel will be required to perform new and different tasks and 
procedures in a HACCP-based inspection work environment.
    The PR/HACCP rule is being implemented in four separate phases, 
starting on January 27, 1997 and ending on January 25, 2000. This 
requires that affected inspection personnel be trained accordingly. 
FSIS developed the following training delivery strategy for use during 
the transitional period:
    1. Employees are trained as close to their work sites as possible.
    2. Use the ``just in time'' concept. This means training is 
provided immediately before an employee is required to apply the newly 
acquired knowledge and skills.
    3. Equip frontline supervisors to lead the program and culture 
changes.
    4. Use videotapes to convey all policy and procedural requirements 
to employees and supervisors to assure consistency of the message.
    5. Use facilitators to deliver the video-based training programs to 
the field inspection work force.
    The training requirements represent the most monumental training 
challenges in the history of meat and poultry inspection. Because of 
the rule's staggered implementation schedule, it was decided that 
applicable employees and supervisors would be trained during the three-
month period just before the effective date of the new requirements. 
Further, it was decided that because the new requirements, when fully 
implemented, will change the way the agency does business compared to 
the past practices, that employees and would have to be exposed to a 
comprehensive culture change program.
    In FY 97, the first phase of the implementation of the pathogen 
reduction and HACCP rule took place. It dealt with the Pre-HACCP 
requirements: These requirements primarily consisted of the Sanitation 
Standard Operating Procedures (SSOP), effective in all plants on 
January 27, 1997. Two separate training programs were delivered as 
follows:
    1. 4,400 employees (including supervisors) completed a 3-day 
training program which focused on how to (a) perform the inspection 
tasks for the regulatory oversight of the Pre-HACCP requirements; and 
(b) understand and appreciate the changes brought about by the new 
rule.
    2. 1,200 supervisors completed a 2-day training program to equip 
them to lead to the changes brought about by the pathogen reduction and 
HAACP rule.
    The implementation of the HACCP and Salmonella requirements for 
large plants took a place on January 26, 1998. Preparatory to the 
implementation, some 112 facilitators completed a 3-week Facilitator 
Training Program on the delivery of the HACCP Technical Training 
Program. In turn, they delivered the training program--7 to 8-day 
program depending upon class size--to more than 2,000 field inspection 
and compliance personnel during a six-week period in December 1997 and 
January 1998.
    On January 30, 1998, FSIS announced that Federally inspected meat 
and poultry plants may, upon request, implement and receive inspection 
under the pathogen reduction and HACCP rule. Plants are not permitted 
to begin operating under the rule until FSIS has trained the assigned 
inspector(s). Upon receipt of a request, the HACCP Training 
Facilitators will schedule and deliver the affected inspectors.
    The training of inspection personnel assigned to plants implemented 
the HACCP and Salmonella requirements on January 25, 1999 and January 
25, 2000, will be conducted in subsequent fiscal years.
                 training and communications challenges
    Mr. Walsh. Are there any other federal agencies whose employee 
training, communications or testing challenges are similar to FSIS's 
and if so, have you learned any management tips from them?
    Respondent. FSIS has training and communication challenges that are 
unique to an agency that is required to provide continuous inspection 
on demand from industry. Our large, geographically dispersed workforce 
with anywhere from one to thirty inspectors at a given meat or poultry 
plant site reduces the opportunity for FSIS to use methods routinely 
used by some agencies such as training days and satellite downlink.
    FSIS has explored the process known as ``benchmarking'' with other 
agencies and organizations and has been actively building expertise in 
a variety of distance learning technologies based on consultation with 
APHIS, ARS and FDA.
    FSIS has joined forces with other USDA agencies to provide training 
in AIDS, Civil Rights, and Personnel Management and has used the 
satellite downlink capabilities of ARS and the Extension Service for 
FSIS-oriented programs.
    FSIS has developed a modern computer network for inspectors through 
the FAIM Project with training as a major component. The use of 
computer based training programs has added a new dimension to getting 
current information to inspectors in a timely manner. During the FAIM 
pilots, FSIS interviewed several federal Agencies and private companies 
that had large field workforces. Based upon the results of those 
meetings, FAIM identified three factors that contributed to successful 
implementations: strict software configuration management, computer 
training in a dedicated computer laboratory, and centralized 
maintenance and support services. When completed the FAIM System will 
greatly enhance the FSIS communication links.

[Pages 781 - 881--The official Committee record contains additional material here.]









                           W I T N E S S E S

                              ----------                              
                                                                   Page
Ackerman, K.D....................................................     1
Billy, T.J.......................................................   675
Dewhurst, S.D.................................................... 1,675
Goldthwait, C.E..................................................     1
Hatamiya, Lon....................................................     1
Kelly, Keith.....................................................     1
Rogers, Len......................................................     1
Schumacher, August, Jr...........................................     1
West, William....................................................   675
Wilcox, C.A......................................................   675
Woteki, C.E......................................................   675













                               I N D E X

                              ----------                              

                          Farm Service Agency

Acquired Property:
                                                                   Page
    Credit Sales.................................................   110
    Inventory....................................................   100
ADP/IT:
    CCC Budget Request...........................................   116
    Effect of Limiting Spending..................................    38
    Common Computing Environment...........................35, 116, 125
Administrative Support, Tobacco Program..........................    97
Advance AMTA Payments............................................    31
Biography of Mr. Kelly...........................................   399
Boll Weevil Eradication Loans....................................    36
Commodity Credit Corporation:
    Donations and Sales..........................................    87
    Export Credit Guarantees.................................81, 93, 96
    Interest Rate................................................    85
    Inventory....................................................    85
    Limits on ADP and Reimbursable Agreements....................    38
    TEFAP Donations..............................................    89
Common Computing Environment...............................35, 116, 125
Conservation Programs............................................    39
    Expenditures.................................................    42
    Technical Assistance Costs...................................    52
Conservation Reserve Program.....................................18, 21
    Cover........................................................    72
    Errors.......................................................   123
    Signups and Eligibility Criteria.............................    73
    Technical Assistance.........................................    74
    Unobligated Balance..........................................    76
Cotton Step-2 Payments...........................................   120
County Offices...................................................    31
    Closures.....................................................   115
Crop Insurance Funding Proposal..................................   123
Dairy Indemnity Program.........................................52, 177
Dairy Options Pilot Program......................................   114
Disaster Relief..................................................20, 33
Emergency Conservation Program:
    Expenditures.................................................77, 80
    Practices....................................................    79
    Unfunded Requests............................................    79
Emergency Disaster Loans.......................................106, 118
Employment:
    County Offices...............................................    93
    Reductions...................................................   124
Environmental Quality Incentives Program:
    Allocations..................................................    57
    Projects.....................................................    59
Equipment Purchases..............................................    36
Explanatory Notes:
    CCC..........................................................   543
    FSA..........................................................   468
Farm Loans:
    Activity.....................................................   114
    Authority to Forgive Loans...................................   112
    Debt Write-Off..............................................97, 130
    Delinquencies................................................   128
    Loan Servicing...............................................   129
    Loans to FSA Employees.......................................   112
    Private Lenders............................................112, 129
    Rescheduling................................................98, 100
    Socially Disadvantaged Producers...........................118, 128
Farm Operating Loans............................................98, 103
    Direct.......................................................    97
Farm Ownership Loans.............................................   104
Fast Track Authority.............................................   114
Hazardous Waste Management Program...............................    95
Independent Study................................................   115
Indian Tribe Land Acquisition Loan Program.......................   110
Non-Federal Sources..............................................   120
Object Class 41..................................................    81
Opening Statement, Under Secretary, Farm and Foreign:
    Agricultural Services........................................     1
Outreach for Socially Disadvantaged Farmers......................   117
Questions Submitted for the Record by:
    Chairman Sheen...............................................    35
    Representative Bonilla.......................................   120
    Representative Latham........................................   123
    Representative Fazio.........................................   126
    Representative DeLauro.......................................   128
    Representative Edwards.......................................   129
Space............................................................    54
State Mediation Grant Program...................................32, 108
Tobacco Program Administrative Costs.............................    97
Tree Assistance Program..........................................   126
User Fees.......................................................76, 124
Water Quality Incentive Projects.................................    56
Written Testimony, FSA Administrator.............................   417

                      Foreign Agricultural Service

Agency for International Development:
    AID Reimbursable Funding........................................247
    U.S. Agency for International Development--P.L. 480 Title II. 
                                                                379-397
Agricultural Trade Offices.....................................132, 229
Asia:
    Asia.........................................................   330
    Asia Financial Crisis........................................   321
    Asia Pacific Economic Cooperation Forum......................   324
Barter...........................................................   161
Beef Hormone Ban.................................................   132
Binational Agricultural Research and Development Fund............   247
Biographical Sketch of Mr. Hatamiya..............................   400
Bulk Products and Value-Added Products...........................   321
Credit Guarantee Programs:
    Credit Guarantees............................................   153
    Fish and Seafood Under GSM...................................   322
    GSM-102/GSM-103..............................................   161
    Regional Approaches to Program Under GSM Activities..........   319
    Supplier Credit Guarantee Program............................   140
Dairy Export Incentive Program...................................   207
Explanatory Notes................................................   594
Export Enhancement Program (EEP):
    EEP Program..................................................   318
    EEP Spending.................................................    28
    Use of EEP....................................................29-30
Emerging Markets Program.........................................   310
Employee Retreats and Training...................................   233
Export Assistance and Promotion..................................   141
Export Programs:
    Export Enhancement Program...................................   156
    Export Incentive Program.....................................   161
    U.S. Export Programs.........................................   133
FAS Conferences..................................................   233
FAS Program Support for States, NASDA and State Regional Groups..   136
Financial Marketing Assistance...................................   316
Food Assistance:
    Food Aid.....................................................   141
    Food for Peace and Food for Progress.........................   203
    Food for Progress............................................   206
Food Security:
    Food Security Commodity Reserve..............................   319
    U.S. Action Plan on Food Security............................   325
Food Shows.......................................................   212
Foreign Currencies...............................................   249
Foreign Market Development:
    Cooperator Program...........................................   317
    Foreign Market Development...................................   135
    Foreign Market Development Cooperator Program Spending.......    28
    Foreign Market Development Program...........................   250
Former Soviet Union..............................................   153
Government Performance and Results Act...........................   317
Horticultural Product Exports....................................    17
Improving Trade Negotiations.....................................    24
International Cooperation and Development Program................   135
International Cooperative Administrative Support Services........   311
International Intern Program.....................................   324
International Trade Shows........................................   140
LANDSAT..........................................................   230
Language Training................................................   232
Maritime Costs...................................................   250
Market Access Program:
    Direct Benefits From MPP.....................................   151
    Market Access Program...................................25, 26, 132
    New Participants Joined the MPP/MAP Program..................   142
    Organizations and Companies That Received MPP/MAP Funds......   142
    Small Companies Participate in MPP/MAP.......................   151
Market Barrier Access Identification.............................   310
Middle-Income Country Training Program...........................   246
Negotiations With Chile..........................................   306
Object Classes...................................................   314
Overseas Inspections.............................................   318
Passenger Vehicles...............................................   310
People's Republic of China.......................................   156
Promotion of Brand Name Food.....................................   161
Public Law 480:
    P.L. 480 and CCC Program Arrearages..........................   192
    P.L. 480 Monetization........................................   203
    P.L. 480 Ocean Freight Differential..........................   198
    P.L. 480 Title I.............................................   193
    P.L. 480 Title II............................................   198
    P.L. 480 Title II School Lunch Program.......................   203
    P.L. 480 Title III...........................................   204
    P.L. 480 Transfers...........................................   206
    P.L. 480 Transportation Costs................................   202
    P.L. 480 Unobligated Balances................................   205
    Reduction in P.L. 480 Funding................................    30
Questions submitted by:
    Chairman Skeen...............................................   132
    Mr. Bonilla..................................................   329
    Mr. Latham...................................................   330
Representation Allowance.........................................   236
Russian Federation/Kyrgyz Republic Joint Commissions.............   312
Sanitary and Phytosanitary Agreement.............................   323
Scientific Cooperation Program...................................   323
Section 416(B):
    Section 416(B)...............................................   206
    Section 416(B) and Food for Progress Transportation Costs....   206
Staff-Years......................................................   314
Summit Plan of Action............................................   322
Tobacco Products.................................................   314
Top Ten Products.................................................   235
Top Ten Suppliers................................................   234
Trade Barriers:
    Canada's Trade Barriers......................................   309
    Chile's Trade Barriers.......................................   309
    Trade Barriers..............................................23, 133
Trade Embargoes..................................................   141
Trade Relations With Cuba........................................     8
Uruguay Round Implementation.....................................   315
US-EU Veterinary Agreement.......................................   318
U.S. Agricultural Products Purchased by Cochran Fellows..........   320
U.S. Import Situation............................................    12
Witness Statements:
    Mr. Hatamiya, FSA Administrator..............................   434
    Mr. Rogers, USAID Acting Assistant Administrator.............   461
WTO Annual Budget................................................   153

       RISK MANAGEMENT AGENCY--FEDERAL CROP INSURANCE CORPORATION

Crop Insurance Program:
    Disaster Relief..............................................    22
    Group Risk Plan (GRP)........................................   336
    Options Pilot Program........................................   336
    Program Indicators...........................................   356
    Program Participation........................................   332
    Revenue Assurance............................................   356
    Third Party Involvement......................................   377
    Underserved Counties.........................................   335
Crops:
    Insured Crops................................................   368
    Principal Crops Participation Rates..........................   369
Legislation:
    Budget Proposal..............................................    10
    Proposed Legislation.........................................   331
    Proposed Legislation.........................................   378
Miscellaneous:
    Computer and Software Spending...............................   334
    Explanatory Notes, 1999......................................   651
    Marketing Expenditures.......................................   367
    Object Class 25, Other Services..............................   333
    Opening Remarks--Mr. Skeen, Chairman.........................     1
    Opening Statement--Mr. August Schumacher, Jr., Under 
      Secretary..................................................     1
    Statement of Kenneth D. Ackerman.............................   453
Questions for the record submitted by:
    Chairman Sheen...............................................   331
    Mr. Bonilla..................................................   377
    Mr. Latham...................................................   378
Reinsured Companies:
    Current Active Reinsured Company Agreements..................   359
    Distribution of Profits and Losses...........................   357
    FCIC/Reinsurance Experience..................................   365
    Profits and Losses...........................................   331
    Reimbursements to Reinsured Companies........................   361
RMA/FCIC Financial Condition:
    Administrative and Operating Expense Obligations.............   363
    CCC and Treasury Borrowings..................................   369
    Delivery Expenses............................................   333

                   FOOD SAFETY AND INSPECTION SERVICE

1999 Budget Request............................................678, 760
Agency Committees and Working Groups.............................   737
Agency Staff Years...............................................   763
Animal Production Food Safety Program............................   764
Antibacterial Resistance.........................................   684
Antibiotics....................................................699, 700
Appropriations Transfers.........................................   727
Assistance in State Inspection...................................   712
Australian Inspection Project....................................   709
Biographical Sketches:
    Catherine Woteki.............................................   781
    Caren A. Wilcox..............................................   782
Budget Activities................................................   767
BSE Risk Assessment..............................................   769
Carcass by Carcass Inspection....................................   680
Codex Alimentarius Commission....................................   742
Communication With Inpsectors....................................   778
Condemned Products...............................................   725
Consumer Education...............................................   767
Consumer Surveillance Information System.........................   768
Contamination of Food..........................................683, 701
Dioxins and Ball Clay............................................   768
Disposition Difference Between Meat and Poultry..................   726
Donald L. Houston Training Center................................   740
Early Retirement.................................................   726
Egg Products Inspection........................................762, 766
Egg Regulation...................................................   701
Employment Requirements for Inspectors...........................   778
Enforcement Activities...........................................   739
Ergonomically Designed Poultry Inspection Station................   763
Explanatory Notes................................................   819
Export Certification Information System..........................   762
Exporting Countries............................................685, 728
Exporting Countries Equivalence Determination....................   769
Exporting Procedures.............................................   762
Farm to Table Strategy...........................................   677
Fast Antimicrobial Screen Test...................................   736
Field Automation and Information Management....................725, 765
Field Management Consolidation...................................   723
Fight Bac! Program...............................................   775
Food Net System in Connecticut...................................   775
Food Safety:
    Challenges...................................................   676
    Coordination.................................................   695
    Education.............................................703, 766, 771
    Research.....................................................   695
    Risks........................................................   773
Foodborne Disease Cases Reported to CDC..........................   768
Foodborne Illness....................................682, 714, 766, 773
General Standard on Food Additives...............................   769
Government Performance and Results Act.........................678, 681
Grants to States...............................................738, 767
HACCP Impact on Foreign Countries................................   764
HACCP.......679, 680, 686, 687, 690, 695, 703, 705, 708, 763, 764, 772, 
                                                               774, 777
Implementation of New Rules or Directives........................   778
Imported Product Traceback.......................................   765
Incidence of Foodborne Illness...................................   682
Industry and Inspection Responsibilities.........................   686
Inspected Establishments.........................................   724
Inspection Exemptions............................................   727
Inspection Responsibilities......................................   677
Inspector Vacancies..............................................   717
Interstate Shipment..............................................   707
Irradiation......................................................   686
Labeling.............................................710, 713, 715, 741
Laboratory Accreditations........................................   726
Layering.........................................................   688
Library of Foreign Country Requirements..........................   736
Meat and Poultry Exports.........................................   743
Meat and Poultry Hotline.........................................   762
National Academy of Sciences Study...............................   694
Non-Salary Costs Increase........................................   765
Object Classification Increases..................................   769
Office of the Under Secretary....................................   726
On-Farm Investigations...........................................   763
Opening Remarks..................................................   675
Opening Statement................................................   676
Organic Foods Production Act.....................................   742
Outbreak Response Coordination...................................   695
Pathogen Testing for Hamburgers..................................   696
Performance Based Inspection System..............................   727
Pilot Programs...................................................   719
Plant Shutdowns..................................................   689
Premature Browning of Ground Beef................................   768
Progressive Enforcement Action.................................682, 726
Pulsed-Field Gel Electrophoresis Patterns........................   767
Questions Submitted for the Record:
    Chairman Skeen...............................................   717
    Mr. Bonilla..................................................   771
    Ms. DeLauro..................................................   772
    Mr. Walsh....................................................   776
Ratite Inspection................................................   724
Redeployment of Staffing.........................................   711
Regulatory Inspection Changes....................................   679
Regulatory Reform.........................................772, 776, 777
Research Projects................................................   723
Residue Test (SOS, STOP, CAST, FAST).............................   736
Salmonella Enteritidis...........................................   762
Sanitary and Phytosanitary Cooperative Efforts...................   724
Sentinel Sites...................................................   764
Serrano Ham......................................................   716
Single Food Safety Agency........................................   694
State Equivalency................................................   725
State Inspection Programs........................................   681
Suspension of Plant Inspection...................................   776
Termination of Florida Meat and Poultry Inspection Program.......   765
Training and Communication Challenges............................   779
User Fee...................................679, 697, 698, 704, 707, 770
Volume and Cost of Product Inspected......................739, 741, 742
Waste Transfer and Processing Facilities.........................   702
Written Testimony of Catherine E. Woteki, Ph.D., R.D.............   783
Written Testimony of Thomas J. Billy.............................   794
Year 2000 Conversion.............................................   678
Zero Fecal Contamination for Poultry.............................   684